Contrary to prior predictions the rental market has not simmered. In fact, we're still experiencing a rapid boil. Developers will be adding more than 3,000 units this year and nearly another 5,000 in 2016. That's more per year than we have seen in the last 15 years.
The Surprise: increased supply is not bringing rents down. With new job growth in the tech sector and a shift in lifestyle rents continue to rise as occupancy remains stable.
Then and Now: Lets analyze this over a period of time. The rental market bottomed out in 2009. Since then rents in class A buildings have rose a whopping 37%. That means that a $2,000 apartment then rents for $2740 today. Even inflation and most pay raises can't keep up with this.
In Summary: the quality of life is being reduced for most renters. Many are opting for smaller apartments, are pushed outside their ideal centralized locations, or are forced to find roommates to stay close to the action. With annual rent increases of 5-6% the future looks grim for many renters.
The Silver Lining: more options for renters in more desirable neighborhoods, and more amenities! Many new buildings offer concessions to lure prospects which could be a good opportunity for you to test drive a shiny new building.
If you're looking to be a landlord, now is the time. Interested in learning more about the new rental developments? Curious about what it takes to buy and if you're ready? Reach out to me for a free consultation.
Read more on Crain's Chicago Business here