(Bloomberg) -- When Ken Griffin decamped from Chicago, the billionaire financier left behind $94 million in ritzy condos and penthouses that once shattered price records and trumpeted his status as the richest man in town.
The homes are now emblematic of something else. Real estate bargain hunters are descending on Chicago, after an exodus of a wealthy elite wiped out millions of dollars in value from the city’s most-expensive properties.
Several marquee houses are trading hands at steep discounts. Griffin, who moved to Miami in 2022, sold two Chicago condos on Wednesday, one roughly 53% below what he originally paid. He’s so far offloaded four out of seven Chicago properties — all at a discount — and is trying to sell a fifth for $8.5 million.
“The precipitous decline in the value of Chicago real estate represents just a small portion of the cost of us having elected poor political leaders,” said Griffin, who left Chicago decrying crime and in a feud with Illinois Governor J.B. Pritzker.
Other wealthy homeowners were also burned recently by declining prices. In September, Michael Jordan also found a buyer for the 32,000 square-foot suburban mansion he spent more than a decade trying to flip, after cutting its price by half. Another house, in the affluent Lincoln Park neighborhood, sold for $15 million in August, after first listing eight years ago for $50 million. The owners, Richard and Michaela Parrillo, recently purchased a condo in Florida.
“We’ve lost at least 10 years of appreciation in a lot of the high-end markets,” said Matt Laricy, managing partner of Americorp who specializes in luxury homes. “But when you get people like Ken who are like ‘Listen I know where the market is at, and I have to sell it here to move it,’ you’re seeing those condos moving.”
Some of the high-end homes had far-fetched asking prices from the start and a lot of sellers were still “hanging onto pre-pandemic pricing,” Laricy said. But with rich homeowners now agreeing to price cuts, buyers have started coming back.
The discounted sales reflect larger shifts in Chicago over recent years. Businesses have left, including Griffin’s Citadel financial firms and Boeing Co., creating a vacuum of high-paying jobs. The city has struggled to put a lid on crime, one of the top reasons for departures. It’s managed to bring down murders and shootings this year, but failed to do the same with theft.
The exodus of the wealthy hammered Chicago’s luxury real estate market, which has long trailed that of other cities like New York or Los Angeles.
Out of 838 homes sold for at least $10 million in the US, only two were in Chicago, according to a mid-year report by real estate brokerage firm Compass. Greater Los Angeles had 135 sales, while Manhattan had 121 and Palm Beach County, Florida had 29 sales.
Even in some of the Chicago’s wealthier suburbs, flooded in recent years by people looking to get away from downtown, sellers have had to offer discounts to move pricier homes.
A house in Hinsdale was bought by a company linked to a Brazilian soybean dynasty, the Ribeiro family, for $6 million in August, down from a $7 million listing. In the affluent northern suburbs, some of the bigger, Gilded-Age mansions are struggling to entice buyers.
All told, there were 63 sales of homes worth at least $4 million through September this year in greater Chicago, with 31 within the city. That’s up from the same period last year, when out of 54 transactions, 26 were within city limits, according to data from the multiple listing service provided by the Chicago Realtors Association.
Still, no single buyer has made an impact quite as large as Griffin did, once upon a time.
The 56-year-old billionaire, who owns some of the most-valuable US residential real estate across New York, Miami and Palm Beach, set a high water mark for Chicago in 2017, when he purchased four separate apartments at swanky No. 9 Walton for $59 million.
On Wednesday, he sold two units for a combined $19 million. Despite the steep price cuts, the sales rank third and fifth most expensive in the city of Chicago this year.
After Griffin left, the post of Chicago’s richest person fell to Lukas Walton, grandson of the Walmart founder and worth $37 billion according to the Bloomberg Billionaires Index. But Walton is much less prone to flashy purchases than Griffin.
The only Chicago property ever publicly linked to Walton was a home in Lincoln Park he and his wife sold via a land trust in 2022 for $1.7 million, according to the Chicago Tribune. It was roughly the same price the couple had paid for the home in 2013.
To some of Chicago’s top luxury brokers, while prices have had to be readjusted, the return of buyers brings some optimism.
Major events over the summer, like the Lollapalooza music festival, a NASCAR street race and the Democratic National Convention, transpired without significant incidents, boosting the case that the worst for the city is past. “I think it’s been a seismic shift, particularly in the downtown condo market,” said Nancy Tassone, an agent with Jameson Sotheby’s representing Griffin in his sales.
Median home prices in Chicago are up 7.7% from the same period last year, with homes averaging 24 days on market, compared to 27 in 2023, according to data through September from the Illinois Realtors association.
“Buyers came back into town and confidence in the city was boosted after a positive summer,” said Emily Sachs Wong, a broker with @properties Christie’s International Real Estate who was also part of Griffin’s condo sale. She declined to comment on specific transactions, but said the million-dollar purchases represent “a giant commitment to the city of Chicago.”
(Updates with details on Griffin’s sales on 16th paragraph)
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