Page 2 - Chicago homeowners question staying in city after unrest 8.11.20

Then as COVID-19 took hold in March, sales opportunities were buttoned up tight as some open
houses were canceled, many mid- and high-rise buildings in semi-quarantine barred all guests,
while tradesmen hired to fix up properties being groomed for sale were also shut out. The market
in April and May went into a tailspin. On top of that came the retail carnage.

Despite the initial round of smash-and-grab destruction in late May, downtown transactions began
to inch back up in June and July as the city entered a more relaxed Stage 4 of recovery from the

pandemic. Now, some residential brokers say, the market in August has gone cold again with little
hope for a recovery soon.

“A lot of the sales downtown are to either empty nesters or second-home buyers drawn to the
museums, theater, restaurants and pro sports here,” says Michael Michalak, a RE/MAX broker in

Lincoln Park. “But all of that is closed now. Even with mortgage interest rates below 3 percent,
potential buyers are looking at all this crime and deciding to put deals on hold.”

In all of Chicago, residential property sales plunged 28 percent in June to 2,041 units, according to
the Chicago Association of Realtors, with homes on the market 22 percent longer before selling
and overall inventory down by 20 percent to 8,200 homes, suggesting that many sellers had
suspended their plans.

A closer snapshot of particular submarkets shows evidence of a downturn not seen since 2008-10.
In the Loop itself this year so far, transactions are down over 30 percent to a mere 347 units

compared with the same period last year. Lincoln Park sales were down 31 percent, while in the
River North neighborhood condominium sales priced above $1 million were down 37 percent. At
lower prices the downturn was more muted, with condo sales under $500,000 in the Near North

down 15 percent so far this year, for example.

Until now, price reductions have been modest, mostly falling 5 percent or less, observers say. But

some brokers see further declines coming. “People are waiting for lower prices,” says Pat Tobin,
president of Tobin Real Estate Advisors based near Millennium Park. “Could prices fall another 5
to 10 percent this year? It’s hard to say, but it certainly could happen.”

Ald. Brian Hopkins, whose 2nd Ward covers a wide swath through the Near North, worries about a
cascading effect if retailers stung by big losses of merchandise over the past couple of days elect
not to reopen. If that were to happen, he worries, residential living with fewer nearby shopping

opportunities might look much less appealing.

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