The Chicago apartment rental market has absorbed the shockwaves from the Coronavirus pandemic and it’s starting to look like the impact is manageable if numbers from early 2020 are any indication. The busy apartment rental season is approaching full swing for Chicago, and many neighborhoods remain in strong demand among renters. Some areas of the city are witnessing average listing times as much as thirty percent below the citywide average. There are some parallels to previous seasons but the arrival of Coronavirus and social distancing guidelines paints a slightly altered picture of renter search preferences for this market.
The initial adjustment to statewide shutdowns had massive ramifications for a whole slew of businesses, and the volume of apartment searches for the Chicago area took a significant hit as well. A look at search volume data from Google supports this premise. But in the weeks following the dramatic move to close much of the local economy, the number of searches steadily rebounded. Now, the market is approaching the peak numbers of searches that Chicago might typically see in the middle of April. Coronavirus may have effectively shifted the market by about six to eight weeks.
Which Neighborhoods Are 30% Below Average Listing Time for City of Chicago?
Neighborhoods along the CTA Blue line have been in steady demand among renters for several years. And it appears that the trend of renters wanting to live along the Milwaukee Ave corridor continues unabated in 2020.
One neighborhood that may surprise some observers in this bracket is Pilsen, where listings are moving thirty percent faster than the citywide average. Then again, the demand for this neighborhood probably shouldn’t surprise anyone who knows about its relative affordability -- the median rent for a 2 bedroom apartment in Pilsen was $1,800 as of May 2020. Compare that favorable pricing with the South Loop neighborhood on the other side of the Dan Ryan Expressway. The median monthly rent for a 2 bedroom apartment in the South Loop can easily top $2,000. It’s clear that renters who are looking for more affordable rents in a neighborhood with a whole lot of character can strike gold in Pilsen.
Are There Stable Chicago Neighborhoods Below Average Listing Time?
The average listing times point to a hot market along the CTA Blue line and a few other emerging spots, but things are still faring well for established rental sub-markets like Lakeview, Lincoln Square and Uptown. Listing times remain more than ten percent below the citywide average and it shouldn’t come as a shock that these areas with lots of apartments and easy access to public transit don’t take too long to lease apartments.
Uptown has been an interesting place to watch over the last 12 months as more vintage properties are getting rehabbed and short-term housing like Single Room Occupancy (SRO) hotels get converted into longer term rentals with higher price tags. Vintage buildings that have undergone rehabs like The Darlington Apartments on N Racine Ave now offer renters a clean, modern place to call home in a convenient location. Renters looking for affordable apartments can still find something in their budget at The Darlington with studio rents starting at less than $1,000 per month.
Which Chicago Neighborhoods Are Above Average Listing Time?
These neighborhoods are listing close to two weeks longer than the citywide average for Chicago. Oversupply is one possible factor in the dense neighborhoods on the near north side, and the fact that many of these buildings would compete on the strength of their amenity offerings could be another thing to take into consideration during Coronavirus.
A lot of amenity spaces are temporarily unavailable or shut down while apartment buildings implement social distancing guidelines. Location is another factor for these neighborhoods close to downtown Chicago. Previously, these apartments may have touted their locations as ideal places for renters looking to shrink their commute times. Now people find themselves commuting far less frequently (or not at all) so that's one fewer asset that downtown apartments could hold over homes far out from the city center.
How Are Leasing Agents & Brokers Responding to Shifting Tenant Demands?
“We realize that people still need to move, so we are still hard at work,” said Max Downs, the marketing director for PPM Apartments. “Our virtual tours are going really well,” Downs added. Virtual apartment tours have been a lifeline for brokers and leasing agents to showcase units to prospective tenants. Showings of occupied apartments were halted under Illinois Governor J.B. Pritzker’s stay-at-home executive order, which was extended through the end of May 2020. But now Downs and colleagues at PPM can showcase an apartment in a building like 634 West Cornelia without having to risk their own safety or the safety of residents.
Leasing managers and brokers are adjusting to shifting renter behavior in stride. “Some of our lease-ups are still closing at the same rate prior to COVID-19,” said a leasing manager with Bozzuto. Bozzuto manages several luxury apartment buildings in Chicago, like Spoke in River West and Eight Eleven Uptown, that offer top tier amenity packages for renters in trendy Chicago neighborhoods.
How Will Coronavirus Affect the Amenity Offerings in Chicago Apartment Buildings?
From elected officials down to individual landlords, there’s been emphasis on compassionate responses to renter behavior and renter health in a post-COVID-19 rental market. This is an emerging trend that’s likely to stick around for the long term.
Renters’ present focus on cost over amenities is understandable at this moment, but there are still plenty of things that multifamily buildings can do to market their properties without relying exclusively on impressive amenity packages. Expect old-fashioned service to emerge as one distinguishing facet of apartment building life that will thrive in the post-COVID-19 apartment landscape.
“Now we’re really realizing how many services these buildings actually provide,” said Randy Fifield of Fifield Companies. From checking in on residents to arranging logistics around the building, “there’s a lot of people that are still very grateful for all of the things that these management companies and these buildings have,” Fifield added. Management companies have been curating smaller social events like outdoor yoga that achieves the dual benefits of bringing residents out of their homes while safely cutting through the boredom and cabin fever following nearly two months of stay-at-home orders. While common spaces may be temporarily closed to control the outbreak of Coronavirus, real estate experts like Fifield are confident that buildings will come up with novel approaches to keep renters invested in their buildings.
Having a management company there to provide small comforts lends appeal to multifamily real estate as renters reevaluate their priorities, such as moving to a larger and more isolated space over renting in a conveniently located apartment building. Providing service like home office supplies, parcel delivery and weekly cleaning are all ways that apartment buildings can build community in a sustainable way. As a reminder or just a nod to the existential forces surrounding renters, landlords and everyone else, this situation is fluid and subject to change at a moment's notice. Stay up-to-date on all the latest news for Chicago renters and landlords by subscribing to Domu's apartment newsletter.