The Great Wealth Transfer Reshapes Chicago's Luxury Real Estate Market

Written by:

Steve Marcinuk

Date:

26 Nov 2025

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Chicago’s luxury real estate market is undergoing significant changes, driven by the largest generational wealth transfer in U.S. history and a shift in work habits that is redrawing the city’s real estate map. The result is a market with clear winners and losers: single-family homes in top school districts attract bidding wars, while downtown high-rise condominiums face waning demand as fewer professionals need to live near their offices.

A Legacy Approach to Real Estate

Jennifer Ames, a veteran broker whose family has been involved in Chicago real estate since the 1880s, has witnessed these changes firsthand. After more than 25 years in the industry and experience at major brokerages, Ames joined Engel & Völkers, drawn by its model of long-term client relationships rather than one-off transactions.

“I don’t think I’m in the business of selling homes. I’m in the business of helping people make smooth transitions,” Ames says. This philosophy means developing advisory relationships that can last decades, rather than ending at the closing table.

Engel & Völkers’ terminology reinforces this approach – its professionals are “advisors,” not agents, and its locations are “shops,” not offices. “An agent or broker does transactions. Deal ends with the closing. Thank you, here’s your keys, here’s my money, have a nice life,” Ames says. “In our culture, from the beginning when Engel & Völkers was founded in 1974, we call them advisors because the goal is that we have an advisory role for life.”

The Great Wealth Transfer Effect

The most powerful force shaping Chicago’s luxury market is the ongoing transfer of wealth from baby boomers to their children and grandchildren, a trend economists call the Great Wealth Transfer. This shift is fueling new demand from younger buyers who are suddenly cash buyers or have access to trust funds.

“The baby boomers have amassed incredible wealth, and we’re starting to see people who are passing that on to their children or grandchildren, and they’re cash buyers, or they’ve got a trust fund,” Ames says. “In my career, I have never had so many people – parents – call and say, I want to buy my son or daughter a condo. And it doesn’t mean my son or daughter who’s 21; it might be a son or daughter who’s 45.”

Ames expects this trend to continue for another decade or more, rooted in the baby boomer generation’s savings habits. “They were either children of the Depression or children of children of the Depression, which means that generation hoarded their money because they know what scarcity looks like,” she explains. “They didn’t spend a lot, and they saved and saved and saved, and now they’re at a point in their life where it’s like, I have everything I need. Family is most important.”

Contrasts Within the Market

The intersection of generational wealth transfer and changing work patterns has created a split in Chicago’s luxury market. Single-family homes in sought-after school districts are in short supply, fueling intense competition.

“When interest rates went up, we had people who panicked and said, I can’t move, I can’t downsize, because it’ll cost me more to buy a smaller place,” Ames says. This has led to a bottleneck: older homeowners who would typically downsize are staying put, while growing families compete for the limited number of larger homes. This imbalance keeps prices high for single-family homes, even as borrowing costs rise.

In contrast, downtown high-rise condominiums are seeing slower sales. The widespread adoption of hybrid work has reduced the need for city-center living. “People bought condos because they wanted to have an easy commute, but now they’re only going into the office once a week,” Ames says. “So they’re like, well, I don’t need to live downtown. I could live half an hour, an hour from downtown, if I only have to go one day a week.”

Neighborhoods in Transition

Affordability pressures and shifting preferences are driving buyers to neighborhoods that were previously overlooked by luxury buyers. Logan Square, Bronzeville, and Bridgeport are among the areas seeing increased interest from those priced out of traditional luxury enclaves.

“I think people are more open now to exploring and looking at other places if they’re more affordable,” Ames says. “It’s a big city, and we’ve got wonderfully diverse neighborhoods and great restaurants and great culture kind of all over.”

This trend is not just about price; some buyers are actively seeking out more diverse communities, moving away from the traditionally homogeneous affluent areas.

Development Slowdown and Future Supply

Downtown condominium development has slowed sharply, with most new construction focused on multifamily rentals rather than luxury condos. Recent high-end projects, such as One Chicago and Cirrus, have struggled to achieve their target prices, leading developers to pull back from new luxury offerings.

“The last couple major luxury developments didn’t get what they wanted,” Ames says. “With all the volatility, with costs and tariffs and all that stuff, I’m not sure who’s doing spec development. Nobody wants to do spec development in the city right now.”

This pause in new condo construction could lead to a future shortage if demand for downtown living returns, especially after the current oversupply is absorbed.

How Pricing and Market Timing Vary

In Chicago’s luxury segment, how quickly a property sells depends far more on its condition and appeal than its price point alone. Move-in ready homes under $1 million on the North Side typically sell in about 18 days, with many going under contract in a week. Properties that need significant work, or that have high ongoing costs, tend to sit much longer.

“If it feels updated and it’s priced correctly, it’ll go quickly,” Ames says. “And if it needs work, or it’s priced too high, or the maintenance is too high, it will sit.”

International Network for Global Buyers

Engel & Völkers’ international network offers practical benefits for high-net-worth clients with cross-border interests. Unlike many real estate brands that rely on loose affiliations, Engel & Völkers maintains direct relationships between its offices worldwide.

“I have face-to-face, first-name basis relationships with people all over the world,” Ames says. “If you called me and said, Jenny, I’ve got my cousin who wants to buy a place in Aspen, I’d say that’s fantastic. Let me send you Erik and Summer’s phone number.”

This global connectivity is increasingly relevant as recipients of generational wealth inherit not only assets but also international ambitions, often seeking properties in multiple countries.

Looking Ahead: What’s Next for Chicago Luxury

The convergence of generational wealth transfer, hybrid work, and evolving neighborhood preferences is likely to define Chicago’s luxury market for years to come. Single-family homes in desirable areas will remain in short supply and high demand, while downtown condominiums may need to offer new amenities or value beyond just proximity to offices.

For real estate professionals, these changes highlight the growing importance of long-term advisory relationships over transactional business. As Ames says, “It’s about being present. It’s not about doing a deal and forgetting and moving on, but it’s about being present.”

Chicago’s luxury market is no longer defined solely by price or address, but by buyers’ desire for flexibility, community, and trusted guidance as they navigate the largest wealth transition in modern history. These factors will continue to shape the city’s high-end real estate landscape for the foreseeable future.