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Becker Private Equity & Business Podcast
Navigating Luxury Real Estate in a Tight Market with Cadey O’Leary of @properties Christie’s International Real Estate
00:23:15
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- [00:00]
A
This is Scott Becker with the Becker Business in the Becker Private Equity podcast. We're thrilled today to be joined by a brilliant leader in the real estate business. We're joined today by Katie o' Leary. And Katie o' Leary runs the Katie o' Leary Collections team. It's affiliated with Properties, but she's sort of a brilliant high end Realtor, largely working in Chicago's Gold coast community, Chicago's Lincoln park community, throughout the Chicago area. She's also got some new initiatives we're going to talk about today and some of these are aimed at sort of helping the inventory challenge we see in the real estate market, particularly in the high end in the greater Chicago area. We'll talk about boutique by design and a lot more. Katie, let me take a moment and ask you to first take a second to introduce yourself and then at some point talk about the segment of the market that you work in across sort of the high end Lincoln Park, Gold coast and more. And what drew you to that segment of the market?
- [01:01]
B
Well, firstly, let me begin by thanking you for introducing me as brilliant. You know, this can be. We're battle worn out here and especially a market like this and it's nice to have somebody introduce you and fluff you up that way. So Scott, thanks so much. I'm really just pleased to be here this morning and to have a conversation with you. So, so again I just want to begin by thanking you. Yeah, so I sell real estate. I broker real estate for buyers and sellers of upper market properties in the city. We really specialize in the neighborhood of Lincoln park, the upper market, specifically condos in the upper market and serve clients across the city. So that has been my focus the last decade plus is and we are committed to again serving buyers and sellers in the city of Chicago.
- [01:54]
A
Why don't we jump to for a moment some of the inventory challenges you're seeing at the high end. I understand in many of the transactions going on today you could have multiple buyers, not of inventory. How do you sort of see those trends in the current high end real estate market in the areas that you serve? Take a moment on sort of the inventory issues and then what you're trying to do about that too.
- [02:18]
B
So this is a universal problem, but it's felt at the local level. Right. And you can be speaking to somebody and we could sit on the phone. I think this is actually a very interesting topic that deserves a lot more attention and frankly a lot more of the attention of our, of our industry at large. So I'm going to just Put that over here from a standpoint of what we're going to talk about and I'll give it some perspective. We have been struggling with inventory across again the Chicagoland area, but in the city, and let's take Lincoln park for example, for several years and it's acute right now. I just pulled a couple numbers this morning and we're feeling it daily but through February. So comparing February of 26 over last year, which was by no means a booming market in terms of inventory levels. Closed homes for sale. Homes for sale are down 30% over last year at this time. Now these are niches and this is every price point in the neighborhood of Lincoln Park. So I'm not just speaking as you know, obviously as an upper market where, you know, prices are much higher. From a standpoint of pricing of single family homes, those prices have jumped 25% or over the last year. You have not had that same impact in pricing because there's more inventory and a greater range of inventory among condos. So condo prices are up just about 9%. But just giving you a sense of the whole nature of supply and demand, Lincoln park remains probably the most desirable neighborhood in the city. More buyers want to move here, sellers are staying and it's a tough market out there.
- [04:05]
A
And talk for a second about the dearth of inventory. You know, we've been through years in periods of time where people are, are moving a lot. They seem to be moving from one house to the next bigger house or they're moving from a big house to the small house or they're moving to a southern climate, whatever might drive it. Currently what you're talking about, we hear consistently there's just as a lack of inventory. Any sense of what drives that. Why is there such a lack inventory? Why are people not moving as much or are they or what is driving that lack of inventory? What are some of your thoughts on that?
- [04:40]
B
Well, I mean experts and analysts will even talk about this. You've got people are handcuffed to a historically low that we'll never see again rates. And you've got people who are locked into rates in the low to low to mid 2%. And it's very difficult to leave a mortgage with that low of interest rate. But secondarily what we're seeing, my own clients and the large is that people desire to move and let's say they're ready to move to a bigger home, their family's expanding, they're ready to make a move or right size and there simply isn't anything to move. To. So you lack a motivation to move when there's nothing in the market that. That is exciting you about making that move, too. So those are a couple of primary factors that are really driving and suppressing the market. But something that is, I think, tangential to that is the notion that over the last 15 years, people have remained in their homes longer. And there's a lot of reasons behind that, but that is a fact. And I think many of us who have parents, and they'll hate to hear this, but elderly parents who are in the homes where they raised us, and I grew up in St. Louis, but this is, this is a phenomenon across the country and neighborhoods, is that parents are holding those homes for decades. People are remaining in their homes for 30, 40, 50 years. And that is, again, stifling inventory that's desperately needed in these, you know, attractive suburban markets that will drive, you know, more families coming in and a kind of a renewal. So that's another. That's another problem that we're seeing, which, you know, we can at some point address the boutique by design, but it was an opportunity that we have experienced in the market, one that we are looking to serve in Lincoln park and again in other. In other suburban markets.
- [06:34]
A
But your point is so well taken that even if people can get a premium for the house that they're in, and I'll go through a couple of your points really quickly, if you can get a premium for the house that you're in that you own, if you don't have someplace to go, it doesn't really matter because even you could sell it for a great profit. If you can't find the place that you really want to go to that's going to be just as attractive or that you really want to go into, then there's not that motivation to move out of the current house house. And in terms of the. It used to be that a family in their home for 30, 40 years almost religiously downside, or move to downsize or move to a Southern community or move someplace warmer or back to where their kids are, whatever it might be. And now what you're saying is a lot of people are staying in those houses for a very long time. You mentioned boutique by design. Can you take a moment and talk about boutique by design and what you're doing and launching there?
- [07:23]
B
Sure. So it's a newer initiative of ours, and it speaks to our primary brand, which is our brokerage brand, Katie o' Leary Collection. And that is an intentionality behind the size of my business, the scale of Our growth and our commitment to really delivering this high touch, white glove experience for our clients. You know, we're really focused on making the process of buying or selling your home and as elegant, as stress free and as productive as possible. And preparation and planning and process are key to that. Complementing that is this new llc, this new business I'm forming, that is a consulting business, specifically consulting developers of boutique residential developments looking for opportunities to bring to market larger single level residences with the features and appointments the modern buyer today wants in neighborhoods where they really are demanding it or would benefit and value would benefit from it. So we are consulting developers and identifying sometimes site locations and then what does that actual composition of that residential offering look like? Who is our target market? What are we building for them? How do we then bring it to market from a marketing and sales standpoint?
- [08:48]
A
Thank you. No, and fantastic. It's such a need for that, that niche, that service to try and promote and encourage some more development in the area of things that people really want. And you mentioned, you mentioned at least at one point, that first floor living or that one for living. And people are so attracted to that, especially as they get just a little bit older or. No, is that, is that all ages are attracted to that one for living?
- [09:11]
B
You know, speak to yourself. I mean, I think it's all ages, but I think, you know, when you look at, if you're, Let me ask, let me address it a different way. So take in the neighborhood of Lincoln park, you know, we've had a couple very successful boutique condo buildings and there would be more. The challenge is, as the current site locations, from a standpoint of their size, their zoning and locations do not allow for a builder to build this type of product. So there's infill of these duplex homes which attract a certain buyer and are needed to some point. But there is a larger untapped market in Lincoln park and certainly other neighborhoods across Chicago and beyond for larger residences where people who are coming and families who have raised their kids have these 6,000, 7,000 square foot homes and would love to move but don't want to leave their neighborhood. Where are they going? So they're holding on to that property and they've got another home or two in another market. What we're looking to do is to identify, you know, this gap and where we can find lot sizes and zoning ordinances that would allow us to build the type of product the market really wants.
- [10:27]
A
And that would be quite profitable for developers as well. Both buyers want it, but be really profitable for developers, if they could do it right as well, in the right spot, the right location. No, I love that talk for a second. How do you think about pricing strategy? You represent buyers, you represent sellers in a market without enough inventory, how do you think about representing buyers in a bidding situation or making a bid? How do you think about that? And then similarly in pricing things for sellers in a market with scarcity, how do you think about pricing?
- [11:00]
B
It's funny, there are so many submarkets within the broader market and even in neighborhoods where scarcity is still at the forefront, buyers are sophisticated and there are certain types of buildings, there's certain types of properties that are kind of at their peak and buyers are not going to overpay, even though there's. So they'll sit, they'll, they'll stay, you know, you'll have this inertia where there won't be, that the sales activity will not occur. So we are still very mindful of how is the market, you know, how's the market performing, how are the buyers reacting to the pricing in, in a given market, you know, Lincoln park is an anomaly to a point. However, I will say that we in the luxury space are at, I think, the peak of where developer grade pricing can go and the market will respond to it. And so certainly these duplex properties that are nearing $2 million, you've got a large segment of empty nesters that are coming back to Lincoln Park. However, that product is not large enough for them. So you've got a niche buyer pool, right, of people who have the financial means and the interest you pay, you know, nearly 2 million for a four bedroom, three bedroom plus office home over a couple of levels. So you're mindful of that when you're working backwards in your pricing. And you know, and again, that's a different conversation, but it's really dependent upon the specific niche, you know, you're in, who's your market, how, what's the competitive landscape like and what is the market going to bear? And that is, sometimes it's. That dictates our approach and our strategy with how we go to market and how we may test the stickiness of the price in a market.
- [12:49]
A
Thank you. And you've built a great following, a great reputation. How do you build credibility as a realtor? What's the mix of sort of relationship skills and competence, helping buyers, sellers accomplish what they really need to accomplish? It's got to be both, doesn't it? But talk about how you built a practice, how you built a following.
- [13:12]
B
Everything comes down to your reputation. Your reputation is built one conversation, one transaction, one interaction at a time. Your reputation's not just with your clients and your community, but with fellow agents. And so it's very important. And I think two, it's going back to this intentionality and the deliberate nature of how we're looking to grow the business. You know, I have a really strong expertise and capability in luxury new development, and I can take that skill set and monetize that in markets outside of Lincoln park and outside the city. I do not have the relationships, the market savvy, the knowledge of what's happening in Winatka or Park Ridge or Naperville or name any suburb. So that is where, again, I've parsed together a very strong network of agents who are experts in those respective markets so that we can serve our clients more fully. And that, again, I think, bolsters this notion of a reputation, of delivering on your promise that you're going to give not only great advice and counsel, but produce great outcomes for your clients.
- [14:22]
A
Well, you've built this amazing reputation in brand. Talk a little bit about where do you see the real estate market going over the next few years, particularly in sort of the Lincoln park, the Wakeview area. I know there's some crazy stat that I. That I read that you've brokered something like one third of all the properties or condo properties over a couple million dollars over the last four or five years. And that's an incredible reputation and track record that you've developed. Take, take a moment on where do you see the market going over the next few years?
- [14:53]
B
So I'm going to clarify that firstly. And yes, we have. So I am proud of that statistic. It's specific to Lincoln Park. Over the last five years, my team and I have brokered one third of Lincoln Park's luxury condo market. That market's defined as condos priced over $2 million. And it's a niche market. It represents, just like the city, just about 2% of the condo inventory. Okay.
- [15:16]
A
But that's a remarkable, remarkable, remarkable accomplishment of really focusing on a niche. That's a very important and valuable niche. We talk about it is, can you win in the niche? And is the niche worth winning in? And you've been winning that niche. And it's a great niche which shows great competence. You're obviously doing something very right. I mean, you talk about that for a moment about sort of, how do you view yourself as sort of taking care of clients that well, that they keep coming back to you and people Keep referring to you, you know, but
- [15:45]
B
I, you know, you speak about the word niche and I think that's getting back to reputation. And this is. If you're not known for something, you're going to be known for everything. You know, I, I don't serve everybody across the city of Chicago. You know, I will definitely help navigate an agent or a team that may serve you more fully than I. Right. So we have, we have again, this great web of client of agents who can cater to the needs of our clients at various stages of their needs. So somebody looking for a lease. We may not be the, you know, the team that's going to represent you, but I'm going to put you in touch with somebody who's qualified and very good at what they do. I think niches are very, very important. You know, you've got these, this is an age of industry consolidation. These mega teams, these big brands that have a lot of people behind them that serve the entire Chicagoland area or may serve much of the North Shore and the city. I think we differentiate ourselves by saying, that's not us. We have an expertise in the upper market in luxury condos and in new construction, and we're going to be the best in class in those areas and really serve you well. Outside of those areas. I think you're better served by working with somebody who is an expert in their respective neighborhood. And so I think that again, the niche can really serve you well. I know colleagues who have a specific expertise in co ops or somebody who we may have a specific expertise in, in older, you know, vintage buildings or. And so I think it really helps differentiate you in the market where there's a lot of noise.
- [17:26]
A
No, I think that's, I think that's right on. You've done a terrific job of really focusing your niche and focusing yourself. So it's sort of like in sort of types, the types of the very best business people. They sort of know who their ideal customer is, who they're really trying to work with and where they're focused on. And you do a remarkable job of that. I know that from our first conversation where I sent you some questions. You said, no, no, that's not really where I focus. Here's where we focus. This is what we try and do. Great. And I think that's the most admirable quality in a business version or one of them. Sort of knowing this is what we do and this is who we do it for. I think it just is literally fantastic. Where do you see some of the trends in Real estate and in the market that you serve over the next couple of years.
- [18:06]
B
That's a good question. I wish I had a great answer for it. I think we as an industry and beyond are going to have to come together and problem solve. I think any crisis. I think we really are in a crisis. We're nearing a crisis in terms of the American dream not being something that can be realized by a large segment of our population. How do we solve for that? And I think having smart people come together in business and entrepreneurial and civic entities to really problem solve for that is an opportunity and one that I'm interested in participating in. So we've got to sell for inv. We need to redevelop assets, commercial and residential properties that are underutilized in neighborhoods where a lot of people want to live. It'll increase tax bases. It'll drive more sales activity and overall productivity in these neighborhoods. So that's another area. I think we have to really rethink how we approach development and redevelopment in. We're speaking to Chicago, but again, this is across the country. And so I think we're going to see more consideration around that in terms of, you know, tearing down structures. Look at these commercial structures and, you know, these large commercial, whether they are corporate buildings, you know, or retail. We've got to rethink if maybe there's a better use for that land. And I think that we're going to start seeing some development around that.
- [19:44]
A
No, I think that's fantastic. And you get into the situation with local governments that get pro developer, anti developer and they try and figure that out. But obviously I think your point on having to work together as a community to start to address. We've got shortages at all spectrums of the housing situation and need to figure it out in a positive, proactive way. I just love that approach. One other question. Any advice that you would give to emerging buyers, emerging sellers, as to how to approach the market today and how to look at the market today?
- [20:19]
B
Sure. I think you have to go in with sober eyes and especially today, we can find a property. We say this to our client. I'll speak to you as if I'm speaking to one of my buyers. I think sellers are in pretty good shape. Preparation is key. You prepare your home for market, you follow our process and we're going to. We're going to perform well for you. But from a buyer standpoint, you've got to have patience. You've got to be very specific about what is most critical to you in your purchase. And if you find properties that align with those critical features, it's a property worth considering purchasing. So the whole notion of having the cream puff Property that addresses 100% of what you're looking for is not going to happen. That's a fantasy. And you're going to be remaining on the sidelines. So I think it's the idea that you're making an investment in your future. You're building equity. You're buying your piece of the American dream. This does not have to be your forever home. It enables you to start building equity and leverage for not only another purchase down the road, but for other financial pursuits.
- [21:29]
A
But so important, you look at it as though the house that you buy is likely not going to be the perfect house. You're going to make it as great as you can, but if it's 93% of your needs, you know, and you could get it at a price that works for you and makes sense for you, you're starting to build your future and really love what you have and love it. Versus trying to shoot the moon and hit. We want to shoot the moon. We all want perfect. But that's not always the case. And so you've got to figure out a way to figure out what you really want, what you really need, and what you could live with or without. Is that a fair assessment or not?
- [22:05]
B
We actually talk about these rules, the 80, 10, 10 rule. If a home you're satisfies 80% of your must have list, 10% you can change, and 10% you can live with. It's a home to consider writing a contract on.
- [22:22]
A
Fantastic. Again, we're thrilled today to visit with Katie o' Leary of the Katie o' Leary collections. Brilliant, thoughtful realtor, an incredible practice that she's built in sort of Chicago's Lincoln Park, Wakeview, Gold coast areas. Literally sold one third of the condos above the $2 million range in that Lincoln park area over the last four to five years. That's an amazing stance and an amazing track record. Katie, I want to thank you for joining us today on the Becker Business and the Becker Private Equity podcast. It's remarkable what you've done, and thank you for taking the time to visit with us.
- [22:56]
B
God, it's been my pleasure. Thank you so much. And I can't wait to read your book coming out in June. Is that right?
- [23:01]
A
Yes. We've got a new book coming out in June. We hope that it doesn't put you to sleep, but we hope you enjoy it.
- [23:07]
B
Thank you, Katie.
- [23:08]
A
No, thank you so much. What pleasure to visit with you. Thank you.
- [23:11]
B
Thank you.
- [23:15]
C
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