The Summer of 2012 has exhibited a spike in Chicago apartment rental activity. There have been an abundance of renters seeking apartment rentals throughout the city and especially in the most sought-after north side neighborhoods such as Lakeview, Lincoln Park, Old Town and other areas within close proximity to downtown. The competition amongst renters is fierce and desirable units do not remain available for long.
This current trend represents a shift from the previous rental climate that we saw in the Winter months of 2011-2012 where there were fewer renters and more apartment inventory available. Many apartment buildings were offering rent specials and incentives to get leases signed. Now we are seeing the polar opposite where no discounts or incentives are available and leases are being signed immediately once units become available.
It is typical for the rental market to “heat up” in the Spring and Summer time in Chicago, but this year’s increase is more than usual. This can be contributed to a variety of factors, including the penned up demand from renters who waited until now to see what type of inventory the Summer market would bring. Property owners also add fuel to the fire by holding their units off market until the prime time begins in hopes of getting top dollar for their unit and having their lease begin in the prime rental season. Additionally, there is a large amount of inventory being taken away from the rental market from developers and owners who prefer to sell their condo units during peak buying season. These type of places have been offered as rental opportunities in the past, but with the sales market showing strength and momentum these units are temporarily unavailable to renters. As many current renters dabble in the market to see what’s available they are noticing that their current place might be the best deal around and thus they are opting to remain as-is instead of changing apartments as they have in previous years.
Normal seasonal factors also add to the mix, such as a large number of recent graduates moving to the city and seeking rental housing. This Summer seems to be a clear indicator of a shift back to a Landlord’s market in downtown Chicago and surrounding areas. Many real estate professionals including apartment locators and property managers are claiming the lowest vacancy rates they have seen in recent years. Downtown apartment developments are leasing up as fast as construction can be completed. Many developers are rushing to take advantage of this trend in the rental market by starting new projects and expediting completion of current projects in the downtown area.
Some might pose the question: As a renter, what can I do to protect myself in this extremely tight rental market where prices are rising and competition is fierce? My response would be: Finding a suitable rental unit that you can afford and where you can remain until you are able to purchase a condo or home is your best bet. Even better, if you can lock in a two-year lease or a one-year lease with option to renew with a capped rent increase that would be ideal. Other tips for renters to navigate this difficult rental market are to start looking for a new place 60 days prior to the expiration of your current lease agreement. Secondly, if you see a good deal do not pass it up or take long to think about it. Good deals always go fast and waiting can end up hurting your pockets as fewer places are available to choose from and prices are higher for your desired move-in date.