2016 Third 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.
With the third quarter of 2016 behind us, we have gathered our data for this period of the very active 2016 Chicago multifamily market.
While our brokerage and exclusive leasing teams closed 350 total deals in the third quarter, we narrowed our sample size down to only the deals 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 represented, sold, or sublet by our brokerage.
Chicago Renters & Relocations
Job relocation will play a key role in leasing the 7,000 new Chicago apartments expected to hit the market in 2017.
While we saw a decrease in the number of relocation clients in the beginning of 2016, those numbers have only continued to climb since then up from 30% in the first quarter to 44% of our clients coming from out of state in the third quarter.
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%, but jumped back up to 40% in the third quarter. Traditionally renters living downtown tend to plan their moves in the early spring and late fall. These numbers showcase that behavior.
Chicago Apartment Pricing
As expected, the average market rental price in downtown Chicago increased from Q1 2016, going from $2702 to $3005. This number took a slight dip in the third quarter down to $2985.
The average price per square foot started the year off at $2.97 in the first quarter, reaching an all time high for the year at $3.55 for the third quarter.
As we head into the final quarter of 2016, we have definitely seen a slow down in traffic and deals closing. We attribute this mainly to the season. Fall is typically the slowest time of year for the Chicago apartment market. There are also two other factors at play that are contributing, the presidential election and the Cubs World Series games. Chicagoans are focused on the outcome of the baseball season, spending their spare time dedicated to watching games. Renters are also hesitant to make any major financial decisions until post the general election, and while they may be looking for an apartment, they are not comfortable applying.
We have seen concessions increase from the second quarter. Many of the new construction properties have gone from offering one month free to two months free rent. We believe this trend will continue throughout 2017 as more and more inventory becomes available and renters are flooded with choices.
In early 2017, we will release our comprehensive report of all 2016 data including pricing, lifestyle and other Chicago renters trends.
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