Demand for apartments in Chicago remains steady at the close of a strong second quarter, despite predictions from some real estate experts that the market might level off in 2019. Chicago was second among major metro areas in the United States in quarterly demand for apartments from April - June, with a total of 7,418 units according to real estate analytics firm RealPage. And Domu witnessed the uptick in demand for apartments near downtown Chicago as well as in neighborhoods outside of the Loop.
Demand for rental apartments is also strong nationwide, with an 11 percent spike in apartment demand compared to last year. Rents have risen 3 percent nationally to $1,390 a month, according to RealPage.
Apartment renters remain optimistic about the value of renting over buying, despite the increase in rent. A record-high 82 percent of renters surveyed by Freddie Mac say renting is more affordable than owning a home in 2019.
Another factor driving the demand for renting an apartment in Chicago, especially among Class A properties, is the arrival of highly skilled workers who may be new to the city. Renting an apartment close to offices and freshly relocated corporate headquarters in downtown Chicago has tremendous upside for a renter who may be new to Chicago.
One of the largest players among new Class A housing in Chicago is The Bozzuto Group, and their Chicago stable of apartment buildings includes The Cooper at South Bank, situated along the South Branch of the Chicago River. The CEO of The Bozzuto Group shared his thoughts on the robust demand for apartments with CNBC in a recent interview.
“I don’t think luxury is overbuilt,” Toby Bozzuto says. “I think in certain markets like Washington, D.C., New York, Boston, L.A. San Francisco, etc., there’s a tremendous employment driver, very high-income jobs. Those people have the propensity to rent and want to rent.” With the steady growth of downtown apartment supply in Chicago, that hypothesis appears to hold true for the Midwest’s largest city as well.
The downtown apartment construction boom is entering its fifth year of record-breaking growth, with 4,400 units expected to hit the market in 2019 and an additional 4,000 units in 2020 according to real estate consulting firm Integra Realty Resources.
The interest in Chicago neighborhoods outside of downtown remained steady as well. Here at Domu, traffic for the Lakeview neighborhood portal has increased by nearly 50% compared to the previous year. Stack that onto strong interest in the Lincoln Park and Logan Square neighborhoods, which both increased in traffic by 20% versus 2018, and the rental market outside of downtown appears healthy as ever.