Residents are flocking back to Chicago’s Loop neighborhood, an area in the heart of the city’s downtown left deserted during the height of the pandemic.
Leasing and sales activity, which started rising last year, is surging now that workers are returning to their offices and first-time buyers once again feel comfortable living downtown, and prices are rising accordingly.
“Demand is explosive,” said Ben Creamer, co-founder and designated managing broker at Downtown Realty Company. “It feels like a busy spring market right now.”
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Creamer said the average price for a studio apartment in the Loop is $1,769, up from $1,434 a year ago. Downtown Realty reports a 95 percent increase in attached-home sales, mostly condos, last year. The company is currently under contract for $10.4 million on behalf of its clients, with 81 percent of that volume occurring in the last three weeks.
“I think demand will continue as more and more people come back to the office,” he said. “We’ve continued to see people reaching out saying ‘I’m coming back into the office and looking to move closer to the downtown area.’”
The skyrocketing demand and rising prices represent a return to normalcy for one of the city’s ritziest neighborhoods, which prior to the pandemic bustled with everyone from office workers, and shoppers on State Street during the day to theater and concert-goers at night. But the neighborhood’s tightly packed venues and skyscrapers turned into a liability as the coronavirus tore its way through the country and soon the downtown streets were empty. Those streets are starting to fill up now that vaccines and booster shots make living with the coronavirus manageable, as are apartments and condos.
“This year is going to be the year of the condo,” said Matt Laricy, managing broker at The Matt Laricy Group.
While Laricy’s firm hasn’t had the same increase in sales as Downtown Realty, he said showings are up 50 percent.
Laricy said first time buyers are the primary driving factor between the increase in sales he’s noticed in the neighborhood. Out of state buyers and empty nesters are also returning to the area after a two year hiatus.
“A lot of first time buyers moved out of state and when they came back, they were still a little nervous, so they rented,” he said. “With rents being through the roof it’s pushing them to become buyers.”
Much of the neighborhood’s new inventory won’t be available until next year, so there will be little relief for renters this year as the Loop continues its recovery, Creamer said.
“Typically with the rental market March through September is the busy time,” he said. “Chicago is a very seasonal market and I think we’ll continue to see rents rise through spring and summer.”