Following what seems like a lifetime of steep increases, Chicago rent prices are expected to move at a more leisurely pace over the next six months. Rental rates jumped a drastic 45 percent between 2009 and now, prompting many leaseholders to sprawl outside of the urban core or take the financial and emotional leap toward homeownership. Now, as new luxury apartments hit the market at an unprecedented pace, prices are expected to flatten, but not fall.
New research indicates that Chicago renters won’t notice drastic drops to their leasing dues just yet. Despite 4,500 downtown apartments in the works this year alone – and another 3,500 slated for 2018 – demand will outpace supply for the near term.
According to a report from Appraisal Research Counselors published on Crain’s Chicago Business, the average net effective rent (i.e. after concessions) at Class A buildings rose 1 percent year-over-year to $3.01 per square foot as of the first quarter. This is a slowdown compared to the past few years, when average Class A rents boosted between 3 and 5 percent, annually.
Occupancy is down slightly from 94.5 percent in 2016, but still holding strong at 93.9 percent. This represents a slight rise from the fourth quarter of last year – a classically sluggish period in real estate as a whole – when occupancy was at 91.7 percent.
Appraisal Research Vice President Ron DeVries told Crain’s he expects rents to ease over the next year following the apartment supply boost. Strong job growth projections and a growing population within the Loop will help offset the impending surge, but Class A occupancy could nonetheless dip to an estimated 92 percent by 2018.
New apartments, new prices
Around half of the year’s new construction apartments will come available this summer, launching anytime between June, July, and August. Average price largely depends on location with the Near West Side maintaining heightened residential interest.
“Certain areas of the city are still swelling, in terms of rent,” said Z Chicago Managing Broker Geoffrey Zureikat. “Think West Loop, Fulton Market, Wicker Park. These areas are seeing their respective historical highs, thanks to newer apartments and an emergent retail and restaurant scene. But, pockets of Gold Coast and Streeterville are softening, which is fairly unique on the cusp of the busy summer season.”
Fortunately for renters across the Windy City, many property management firms are currently offering some appealing concessions. Deals can range from one or two months’ of free rent depending on lease term and unit size, which helps renters expand their search scope to apartments that would normally fall outside of their budget range. Another price perk comes in the form of admin or move-in fee waivers. These nonrefundable expenses cost anywhere between $400 and $500, but can be credited back when renters apply for a unit within 24 to 48 hours of the showing.
Summer is undoubtedly the competitive rental season, but Z Chicago has the expertise and network to locate an apartment within your price range that checks off all your must-haves. Call us at 312-810-2295 to expedite your Chicago apartment search.
