You can use echoipdns for this (https://github.com/zapty/echoipdns).
echoipdns local all requests for .local subdomains are redirected to 127.0.0.1, so any domain with xyz.local etc will resolve to 127.0.0.1. You can use any other suffix also just replace local with name you want.
Echoipdns is even more powerful, when you want to use your url from other machines in network you can still use it with zero configuration.
For e.g. If your machine ip address is 192.168.1.100 you could now use a domain name xyz.192-168-1-100.local which will always resolve to 192.168.1.100. This magic is done by the echoipdns by looking at the ip address in the second part of the domain name and returning the same ip address on DNS query. You will have to run the echoipdns on the machine from which you want to access the remote system.
echoipdns also can be setup as a standalone DNS proxy, so by just point to this DNS, you can now use all the above benefits without running a special command every time, and you can even use it from mobile devices.
So essentially this simplifies the wildcard domain based DNS development for local as well as team environment.
echoipdns works on Mac, Linux and Windows.
NOTE: I am author for echoipdns.