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Renters Feeling the Pinch

Chicago Rental Market Better Than Ever

Chicago Renters Feeling the PinchThe downtown Chicago rental market may be the best it’s ever been. At the beginning of the recession, now four years ago, rentals hit an all-time high in many Chicago neighborhoods. But now that the condo market is still struggling, real estate experts feel the Chicago apartment sector may become even stronger. According to a new Appraisal Research Counselors report, the average Class A (high-end) occupancy rate jumped to 95.6% in the second quarter of 2011; up from 93.9% in the first quarter. Landlords also felt the strong demand for high-end apartments in downtown Chicago as the average net-rent for a Class A building reached $2.43 a square foot in the second quarter this year-a figure that is up 6.1% from the first quarter and an astounding 9.5% from this time last year. It is likely that potential homebuyers are waiting even longer to transition from renting to buying due to the uncertainty of whether condo prices will hold or continue to spiral downward. Also hurting the Chicago condo market is the inability for many potential homebuyers to qualify for the much tougher loan stipulations banks and mortgage lenders are requiring in this tough economy. The good news is that with this growing demand for downtown apartments, developers are starting to build again, with construction of five new apartment buildings currently in the works. Appraisal Research Counselors is projecting 5,500 new apartments being added to the downtown Chicago market over the next four years with at least a dozen projects still in the planning phases.

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