2016 First Quarter Apartment Market Data
As the top luxury rental brokerage in Chicago, Luxury Living Chicago Realty rents to nearly 1,000 downtown residents every year through our brokerage and exclusive leasing engagements. From construction sites and hard hats to repeat clients and sight unseen rentals, our team has unparalleled knowledge of the multifamily market in downtown Chicago.
The first quarter of 2016 is behind us now and we have compiled some initial data about how the 2016 Chicago multifamily market is starting to shape up.
While our brokerage and exclusive leasing teams closed over 250 total deals in the first quarter, we narrowed our sample size down to the 135 apartments we rented in the downtown Chicago Class A apartment buildings. This number does not include any units we rented that are exclusively leased and marketed by Luxury Living Chicago. It also does not include any private condos we represented, sales we closed, or sublets we executed.
Chicago Renters & Relocations
The growth of businesses in downtown Chicago and the relocation of suburban headquarters and satellite offices to the city is what has the strongest impact on the Class A rental market.
So it’s slightly concerning to find we saw a decrease in the number of relocation clients in Q1 2016 compared to Q1 2015, from 38.5% in Q1 2015 to 30.4% in Q1 2016. Traditionally Q1 is when we see a steady stream of relocation clients coming to Chicago after companies have set their new budgets for the year and start hiring. This year’s drop in relocation traffic could be signaling a weakening job market in Chicago. We will keep an eye on this trend over the next year.
However, while the number of relocation clients was down in the first quarter, there was an increase in the number of renters already living downtown looking for a new luxury home. During the first quarter of 2016, 45.2% of our clients were already living downtown but opted to move to one of the thousands of new luxury units. In the first quarter of 2015, that number was 35.6%.
Traditionally renters living downtown start their search in the slower winter months, hoping to capitalize on concessions being offered during the lease-up of properties set to deliver in the spring and summer months. Since concessions for new Chicago apartments have remained consistent since August 2015, renters already living downtown can move to a newer building and still get a great deal. We will watch this trend into the spring and summer when pricing usually climbs higher.
Chicago Apartment Pricing & Unit Sizes
As expected, the average market rental price in downtown Chicago increased from Q1 2015, from $2,408 to $2707 in Q1 2016. The average net effective rental price in Q1 2016 was $2628. The net effective number takes into account any concessions renters received.
The average price per square foot was up from $2.90 in Q1 2015 to $2.97 in Q1 2016. However, when you look at the net effective price per square foot in Q1 2016, our numbers show a drop to $2.87.
As we barrel into the second quarter, momentum is going strong. Our brokerage and exclusive teams have had a very busy first half of April. We have seen concessions remain in place when typically in the past they have all but disappeared by the start of busy leasing season.
With so much inventory available to Chicago renters, it will be interesting to see if market rents will go up in the second quarter. In 2015, the average rental price in downtown Chicago increased from Q1 to Q2, from $2,408 in January, February, and March to $2,661 in April, May, and June.
Stay tuned for our next data report.
In the meantime, you can get the full 2015 Chicago apartment market data report by clicking the button below.
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