chicago-condos & Chicago Real Estate pcherry on 16 Feb 2011 12:45 pm

Chicago Apartment Rents Expected to Increase This Spring

February 16, 2011 - By now most people who follow Chicago real estate news know that there is more demand for rental Chicago apartments than market rate Chicago condos. What you may not know is that rental rates are expected to go up this spring, according to a recent Crain’s report. And the expected hikes in monthly rental rates won’t be limited to downtown apartments. Units leased in other Chicago neighborhoods and the suburbs are also expected to rise.

Appraisal Research Counselors data shows that rents increased by around 7% last year and are expected to go up another 7% to 8% this spring. Many rental towers are 98% or more occupied and landlords have plenty of would-be tenants waiting for a unit to become available. That means that incentives and concessions like free parking, a free month’s rent or free appliances or televisions may not be offered as much.

ARC vice president Ron DeVries was quoted in the article as saying that, “The concessions are still out there, but as soon as you hit that April market you’re going to start seeing a lot of push on rents.”

Two rental towers that are planning a rent hike are Presidential Towers with up to an 8% increase and Flair Tower with a 4% to 6% increase this spring.

The shadow market of condo owners and investors who are trying to rent out units that aren’t selling hit the 5,718 unit mark last year, according to the article. But with no big new developments on the horizon there may not be many units added to that total. It also may not be as big of a threat to the apartment market because many renters are concerned that if they rent a condo it might go into foreclosure.

The article also went on to say that while last year brought over 2,500 new downtown Chicago apartments onto the market, this year just about 312 new apartments in Randolph Tower will be ready. For next year (2012) around 650 new apartments are expected to be completed and about 2,000 new rental units in 2013. All of that may sound like a lot of apartments, but in the twelve month period from the fourth quarter of 2009 to the fourth quarter of 2010 there were more than 2,000 new downtown Chicago apartments leased.

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