'New Suburbanites' Fuel Rising Winnetka Luxury Real Estate Market

WINNETKA, IL — Winnetka has been identified among the top luxury real estate market for wealthy people to relocate during the coronavirus pandemic. According to a report from Coldwell Banker Global Luxury, people purchasing homes in the village this year are drawn to its accessibility, large lots and outdoor spaces.

The report identifies three archetypes of high net worth homebuyers, with those in Winnetka classified as "new suburbanites." They tend to have a net worth between $5 million and $10 million, be in their 40s or 50s and married with children. About half own at least two homes, according to the report.

Unlike the "explorer" archetype — younger and slightly less wealthy people moving farther away from metropolitan areas to more rural locations — or the "resorter" archetype of older people in the $10 million and up wealth bracket purchasing additional properties in vacation destinations or converting second homes to primary ones due to the pandemic, the "new suburbanites" generally still need to be within commuting range of cities for work or business.

Real estate sales data shows that the market is booming for high end single-family homes, more so than attached properties. Since January, the median price of luxury properties was up by nearly 4.8 percent, according to the report.

In Winnetka, the median list price in September 2020 was $1.372 million, compared to $1.25 million a year earlier, according to Realtor.com. The median sale price was $1.15 million, up from $1.06 million in September 2019. Homes in the village are also selling faster this year. July's average of 74 days on the market was the lowest in at least three years.

According to a July survey of its members by the National Association of Realtors, 76 percent of respondents said prospective homebuyers have not shifted the location of where they want to buy a home due to COVID-19. But 15 percent of respondents said more than 10 percent of their buyers had changed locations, with suburbs, rural areas and small towns the most popular destinations. Some of those places have been dubbed "Zoom towns" — a pun on rapid growth and the teleconferencing software.

While the Coldwell Banker Luxury report identifying Winnetka as one of nine rising luxury real estate markets for the "new affluent trailblazers" contains some statistics and other data from third-party sources, it also relies on anecdotal evidence from brokers in the field.

“Once again, our local market experts were key in analyzing the available data that was suggesting people were interested in these unlikely locales," Craig Hogan, vice president of luxury for Coldwell Banker Real Estate, said in a statement announcing the report.

"They were able to look at the data and say what’s really important to buyers and sellers on the ground," Hogan said. "These preference shifts are real, but they are also subtle and gradual — shifts like teleworking, cost of living and lifestyle changes due to the pandemic — so it’s the anecdotal evidence that truly brings this report to life. After all, luxury whispers, it doesn’t shout.”

Local Coldwell Banker brokers Dawn McKenna and Katie Moor said the events of 2020 have caused many Chicago residents to accelerate their existing plans to move to the suburbs, with the village's drivability and proximity to the city usually important considerations.

"People are learning that outdoor living is good living," they said in a joint statement. "Even when this pandemic is in our rearview mirror, people will have learned the value of having room to breath, stretch out and entertain. Big lots, large open rooms, spacious patios and decks and pools are all very hot right now."

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Nationally, surging home prices can be attributed to supply and demand. Low interest rates and a large millennial generation of first-time homebuyers entering the market are both increasing demand. But a lack of new construction and willing sellers, who tend to be older, is restricting supply.

With the overall number of active listings down by almost a third compared to a year earlier, Jeff Tucker, an economist at Zillow, told NPR there is a "tremendous shortage of homes on the market." Meanwhile, demand for rental properties has plummeted, and vacancies are on the rise — evidence, he said, of a K-shaped recovery.

At the bottom of the "K" are those without high-paying telework jobs, including the millions receiving unemployment insurance benefits. Their wealth is trending downward. But workers with the ability to work remotely, property owners and people with stock portfolios are seeing their wealth increase, rising like the top part of the "K." (According to a report from Swiss bank UBS and consulting firm PwC, billionaires increased their wealth by more than 27 percent from April to July.)

Those with higher incomes are far more likely to be able to work from anywhere. According to the Pew Research Center, 62 percent of workers with a bachelor's degree or more education had jobs that could be performed remotely. Only 33 percent of workers with some college or a two-year degree, 22 percent of those who did not go to college and 9 percent of those who did not graduate high school had jobs where they could work from home, as of February.

This article originally appeared on the Winnetka-Glencoe Patch