Chicago Condo Directory

February 24, 2009 - Apparently now is the time to rent, especially if you want a Chicago condo or apartment in the South Loop. According to the latest numbers gathered by Appraisal Research Counselors, rents for downtown apartments fell to their lowest rates since 2001. Rents are averaging about $2.11 per square foot in the last quarter of 2008. That is down 6.2% from the same period in 2007. ARC noted that this is the first time rents have fallen since 2003.

The main culprits in the decline are of course the worsening economy and influx of some 3,200 new condos from 2008 and this year as well. With fewer jobs there is less demand for apartments, and according to Crain’s there will be a loss of 133,000 jobs in Chicago this year. Also, there were 1,016 new apartments added to the South Loop in 2008, with more developers turning to rental Chicago real estate projects instead of condos. Developers and often investors will opt to rent out a condo when it doesn’t sell in an attempt to buy some time until the market improves.

This so-called shadow market of condo rentals is putting more pressure on Chicago apartment managers. Many try offering one or two months rent free in an effort to keep from lowering rent prices on units. The Crain’s article mentioned one apartment building in particular that is having a difficult time finding tenants. 1401 South State Street is a luxury apartment high-rise that so far has only leased about 60% of its 278 units during the 10 months it has been open for occupancy. Appraisal Research Counselors stated that in a normal market, a quality apartment building would be around 90% full.

For those who aren’t ready or able to buy one of the New Chicago Condos for sale right now, it might pay to check for any units in the building that may be for rent. You could find a deal where you might not expect it.

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