CHICAGO RENTAL GLUT Will Drive Down Rents, Ramp Up Rental Incentives for Many!
HUNDREDS OF NEW DOWNTOWN CHICAGO RENTAL APARTMENTS, CONDOS BLOAT INVENTORY, OUTSTRIP RENTAL DEMAND!
You wanna live in Downtown Chicago or The Chicago Loop? Desire to rent, rather than to buy?
Likely, you're going to save a lot of money by renting downtown!
In 2010, in excess of 2,200 new rental units will be added to existing rental inventory in and near The Loop this year. This is on top of the nearly 1,300 existing rental units in or near Downtown.
Also, condominium units available for lease, after another difficult selling season for their owners, have flooded the market in Downtown Chicago. For the 12 month period that ended June, 2009, nearly 4.500 condo units were leased to renters. Today, more than 1,700 condo units are being listed for rent in online classified sites such as Craigslist and HotPads.
The estimated 10% oversupply will lead to high vacancy rates in many downtown buildings, according to Ron De Vries of Appraisal Research Counselors, as reported by Mary Ellen Podmolik in today's Chicago Tribune.
To quickly rent out vacant units this spring, landlords are likely to steeply discount rents. Already, rents are at their lowest level in five years in the most pricey rental buildings downtown.
Often, however, landlords don't stop there!
Many lessors are throwing in free parking with their new leases, waived or greatly reduced security deposits, even vacation travel or free flat-screen HDTV's as an incentive to rent their units.
In Downtown Chicago, the lowest rents for one-bedroom apartments are in the West Loop, and parts of the South Loop. The best value in two-bedroom apartments is in the West Loop.
A number of trophy rental residences are opening this year in The Chicago Loop, The West Loop, and River North. These larger rental towers comprise the lion's share of new rentals coming to market in 2010.
After this year, the completion of new rental buildings is expected to decline considerably. This reduced supply is expected to be felt in the rental market in 2012, when average rents may tumble as much as 8%, according to Appraisal Research.
DEAN MOSS & DEAN'S TEAM CHICAGO
