Chicago’s downtown rents are jumping again.
Rents in the downtown area continue to climb, while other cities are still rebounding from pandemic departures, data show.
The average rent in Chicago was $2,332 a month in January 2022. That’s an increase of 6.1 percent from that time last year, according to data from Redfin.
Residential rental buildings rebounded quickly from the pandemic, said Gail Lissner, managing director at Integra Realty Resources.
The findings show a market where the market can’t keep up with the demand for rental housing, while the condo market lags behind. Also, residents looking to move downtown tend to want modern units, while most of the condo inventory is more dated, larger and requires a down payment, said Lissner. In the suburbs, it’s the opposite, with higher demand for single family homes.
“Our rental market is so strong,” she said. “It was impacted for a short time by COVID, but by January 2021 it had popped back. Absorption has been great and occupancy has been great, there’s a tremendous appetite for rental buildings downtown.”
Mortgage payments for condos in Chicago, even those with only a 5 percent down payment, are significantly lower, at an average of $954 a month. That drops even further to an average of $803 when the buyer has a 20 percent down payment.
Class A apartment building rents jumped 32 percent last year, according to Integra Realty Resources. Not only have rents recovered everything they lost during the pandemic, they are hitting new highs, Integra told Crain’s Chicago. Tenants who could have previously been able to afford a downtown apartment may be left looking elsewhere in the city.
“A lot of people are absolutely priced out of the market,” Integra Senior Managing Director Ron DeVries told Crain’s.
The COVID-19 pandemic never had the impact on residential real estate that it had on offices in downtown Chicago.
Multifamily developers are pursuing new projects in other parts of the city to meet the demand. Fulton Market, which lifted a residential zoning ban, last year is set to get a slew of multifamily development in the coming years. Other areas developers are watching include Portage Park, in Uptown, some submarkets on the South Side and infill opportunities in Lakeview and Lincoln Park.
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