When Chicagoans leave city life and choose Illinois’ third-largest city, Naperville, they typically want to build their dream custom homes in the suburb, according to agents, but that’s becoming more and more challenging.
As a result, many buyers are forced to select from existing homes instead, using their new home budgets for high-priced purchases. Most of Naperville’s highest-priced home sales this year happened this summer, according to Homes.com data. The biggest deal, a $3.8 million custom home with 14,668 square feet, closed in early August.
The new home attraction has spurred a shortage of land, agents say, and the wave of luxury closings at the end of the spring selling season signal a settling of sorts from buyers.
“There’s still an intense desire for new construction," said Naperville resident and agent Katie Minott of Premier Sotheby’s International Realty. "It’s just as land becomes more scarce, people have to adjust those expectations if their timeline doesn’t match. If I can’t wait to find a perfect lot or get through a build time, I have to reassess making a resale property work.”
Naperville, located 34 miles outside Chicago, has long been an attractive suburb for ex-urbanites to expand into with young families. It’s the second fastest-growing city in the greater Chicago area, according to U.S. Census data. Minott estimates 60% of her buyers have an existing family tie to Naperville.
"Naperville’s top-rated schools, iconic Riverwalk, vibrant downtown and easy access to Chicago create an exceptional quality of life, and with limited land available for new development, demand for housing remains especially strong," said Adrian Brizuela, an associate director of market analytics in Chicago for Homes.com and CoStar.
Buyers want to live within specific school districts, according to agents, and predominantly surrounding the downtown Naperville area, an attractive hub for its restaurants and boutiques.
“We’ve seen a huge change in the area,” said downtown resident and agent Bridget Salela of Coldwell Banker Realty, who’s representing Naperville’s priciest listing at $3.49 million. “We’re running out of lots in downtown Naperville because so many people want to build their dream house, so it’s upped the prices on everything in certain areas that have the walkability.”
Salela said she has seen the lot price value appreciation firsthand, with a previous home she purchased for $300,000 selling for double the amount just for the dirt. A 2.5-acre lot near downtown sold for $1.25 million in March, according to Homes.com, and a 50-by-145-foot lot downtown described as “buildable” closed for $475,000 in July.
And when Chicagoans move, they want the same feeling of newness and contemporary city style, pushing their preferences toward new construction.
Most of Naperville's highest-priced existing homes that sold this year were built in the early 2000s when sprawling McMansions were attractive. The third-priciest sale that closed July 31 was built in 2022 and boasts 13,905 square feet. Another $3 million was spent on a 2007-built home with nearly 10,000 square feet.
Some of the biggest price tags sat on the market for months.
“The buyer today doesn’t want that,” said Salela. “They’re looking at the taxes, and they really want to stay around that 4,000 square feet.”
There's demand from empty nesters
It’s not just young families competing for the land. Empty nesters putting their savings into decked-out luxury homes have entered the ring, adding another level of competition.
“We compete a lot with empty nesters that are parking their money in this downtown area and they’re building these beautiful houses. A lot of people don’t realize that,” said Salela. “They want that family home that’ll be in the family for a long time. They want the grandkids that are going to be visiting in the summers and enjoying all that downtown has to offer.”
DJK Custom Homes, a Naperville builder, is developing an attached townhouse product in a prime downtown location called Heritage Place. Vice President Kevin Kittilsen previously told Homes.com that 80% of those units have sold to empty nesters.
The new construction homes are priced $1.6 million and up, according to the Heritage Place website. Homes.com data shows the second-priciest sale of the year going to a $3.7 million attached home in Heritage Place that closed in July.
Another local builder, Charleston Building & Development, received city approval for a development called The Charleston, a project of 30 homes in walking distance to downtown that the builder said will be aimed at the 55-and-over demographic.
According to Homes.com, the median single-family home price in Naperville is $732,500. Median sale prices declined 5% year over year in July.
