2016 Second Quarter Apartment Market Data
As the top luxury rental brokerage in Chicago, Luxury Living Chicago Realty rents to thousands of downtown residents every year through our brokerage and exclusive leasing engagements. From construction sites and hard hat tours to repeat clients and sight unseen rentals, our team has unparalleled knowledge of the multifamily market in downtown Chicago.
The second quarter of 2016 is complete and we have compiled our data to summarize the success of the first half of the 2016 Chicago multifamily market.
While our brokerage and exclusive leasing teams closed nearly 500 total deals in the second quarter, we narrowed our sample size down to only the deals our team rented in the downtown Chicago Class A apartment buildings. This 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 companies relocating their headquarters to downtown Chicago will have a strong impact on the Class A rental market.
We saw a decrease in the number of relocation clients in Q1 2016 compared to Q1 2015, from 38.5% to 30.4% respectively. We were relieved to see relocation traffic was back up again in Q2 2016 with 39% of our clients coming from out of state.
During the first quarter of 2016, 45.2% of our clients were already living downtown but opted to move to a new luxury Chicago apartment. In the second quarter of 2016, that number was down to 36.6%. Traditionally renters living downtown tend to plan their moves in the early spring and late fall. This timing allows for them to take advantage of slightly lower pricing, as summer is the time when rents are at an all-time high.
Chicago Apartment Pricing & Unit Sizes
As expected, the average market rental price in downtown Chicago increased from Q1 2016, going from $2702 to $3005. The average net effective rental price in Q1 2016 was $2628, while Q2 2016 was $2749. The net effective number takes into account any concessions renters received.
The average price per square foot was up from $2.97 in Q1 2016 to $3.23 in Q2 2016. When you look at the net effective price per square foot in Q2 2016, our numbers show PPSF is still over three dollars at $3.14.
As we head into the third quarter, we are experiencing a busier July than in the past. We attribute this to the beautiful summer weather Chicago has experienced. Now that the Fourth of July holiday has passed, many people are focusing on their apartment search for late summer/early fall and traffic has remained steady since May when the Chicago busy rental season kicked into full swing. Also, many renters are “shopping” for the best deal, taking their time before signing a new lease, or questioning “should I stay in my current Chicago apartment.”
We have seen concessions remain in place through the second quarter when typically they are gone during the summer months. Many of the new construction properties have continued to offer one month free to stay competitive.
In 2015, the difference between Q2 and Q3 pricing went from $2661 for April, May, June to $2485 for July, August, September. We estimate a slight decrease in pricing this year between Q2 and Q3.
Click here for a summary of our 2016 first quarter apartment market data.
Stay tuned for our next data report in the fall.
In the meantime, you can get the full 2015 Chicago apartment market data report by clicking the button below.
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