Despite many predictions of a glut in inventory from a recent building boom the rental market is chugging along breaking records. High-end class A buildings are now at $2.87/sqft, up 5.3% from this time last year. Why?
Here of my insights:
-There are simply fewer buyers in the market which means more renters. Some are still feeling the burn from the crash and the milleniuals aren't quite ready to pull the trigger.
-New tech companies continue to score office space downtown, luring new renters into the city.
-Chicago is quickly catching up with New York, Boston, and San Fransico with the luxury rental lifestlye. Those relocating from these cities have no problem spending the money; many find our rates to be a value.
While renting remains the answer for some, most aren't considering one of the many benefits to owning:
-Tax deductions can save you thousands a year.
-Mortgage rates/payments are locked, renters are at the mercy of their landlords on an annual basis.
-If you plan to stay at least 3-5 years real estate can be a great investment with a good return.
-The longer you stay the more equity you build, which means more money in you pocket should you decide to sell.
At the end of the day renting may be convenient but it's not an investment in your future. Since late 2009 rents in Chicago have increased a whopping 34%, pricing many long-term tenants out of their homes. Where do you go from there? Downgrade your quality of life for the same price?
If you would like to assess the pros and cons of renting vs. buying in your unique situation reach out to me using the contact form on my site to request a consultation.