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Chicago ranks 30th in 'tightest rental markets' in the US


Rents will go up and inventory will get tighter---landlords and homeowners, this might just be the year for you as the current demand for US apartment rental is “insatiable”, according to Reis, a real estate market data, research and analytics provider.

Ryan Severino, senior economist at Reis explained to the Chicago Tribune, “Reis' fourth-quarter data showed that apartment vacancies around the country continue to tighten. They're at 4.1 percent. For renters, it's only getting tougher and tougher.”

Severino also commented that in the fourth quarter of 2013, the rents are the highest level they have ever seen.

In the 79 markets that the company has studied, Chicago came up on the 30th spot with the tightest apartment rental market. This does not come as a surprise as Chicago has always been a favourite for local and foreign property investors especially those who are hunting for higher profits.

In the first six months of 2013 alone, there were 2,845 single family flips in Chicago ---a whopping 86% change year on year. The average purchase price in the city is $195,360 and investors can achieve an average gross profit of $23,099 or 12%.

In addition, the Q3 IP Global Property Barometer revealed that Chicago is moving out of stabilisation period and offers excellent potential in the short to medium term. The lower price points and higher yields are looking more attractive to investors. Home prices in the area were up 7.8% in the year to July 2013, while condominium prices increased by 14% in the same period.

Property prices in Chicago have jumped 14 per cent year-on-year to October and the rental market has also increased 5.3 per cent with a modest vacancy rate of less than 4 per cent. Chicago's current construction levels are 63 per cent below the long term average and if inventory is gradually placed into the market, economists believe the mid-term picture for property investing is strong.

 

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