Are Chicago Renters Moving From One Apartment to Another?
When the Chicago Tribune wanted to write a story on the current state of the Chicago apartment market, of course they turned to Luxury Living Chicago’s Managing Broker, Aaron Galvin, for his perspective.
In a story published in the Trib on May 20th, 2016, reporter Gail MarksJarvis took a closer look at new data from apartment market analyst MPF Research that says 60 percent of renters are deciding to re-sign leases for their existing apartments, rather than venturing into higher-priced units.
Galvin explained that as Chicago rent prices continue to rise, it’s getting harder for renters to leave their current apartment at the end of their lease term for a better deal. While most new properties are offering rent specials, such as a month free, to attract residents to their brand new Chicago apartments, starting pricing is still high enough that renters already living in a luxury downtown Chicago apartment aren’t as enticed by the specials to pack up and move.
Renters are definitely seeing an increase in renewal pricing, but not enough where they feel they would be getting a better price at another apartment building in the market place. When renters seek out a deal, they typically aren’t willing to compromise on their current apartment features, such as losing washer/dryer in unit or hardwood floors throughout the apartment, or changing neighborhoods, to get a better price.
“We’re seeing a good number of our past clients staying in the apartments we have placed them in for two years before they feel it’s time to explore the market again,” says Galvin.
What does this mean for all of the new apartments coming to Chicago in 2016 and beyond?
“There is still a lot of movement in the market,” assures Galvin. “The renters that are moving to a new apartment have had a life or financial change, such as moving in with a significant other, or getting a promotion. They want, or need, a new apartment to match this change.”
In fact, according to Luxury Living Chicago’s 2016 Q1 renter data, our brokerage saw an increase in the number of renters we worked with already living in a downtown Chicago apartment who rented another apartment downtown. During the first quarter of 2016, 45.2% of Luxury Living Chicago clients were already living downtown but opted to move to a new luxury apartment in the area. In the first quarter of 2015 that number was 35.6%.
What should renters do if they are unsure if resigning their current lease is a good idea?
“There are a few things renters should do before they renew, such as consulting an experienced apartment broker who knows the market well and can help you determine if it’s better to re-sign your lease or move some place new,” he suggests.
Is a rebounding sale market impacting the Chicago apartment market?
“Not right now,” says Galvin. “While the number of our past and new clients transitioning from renters to buyers has been steadily increasing over the last 18 months, it’s not enough to make a huge impact on the rental market.”
Galvin sums up that the 2016 Chicago apartment is still going strong. Click the link below to read the full Chicago Tribune Article.
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