Spring ’11 Pricing Update—Sky High Pricing & Limited Availability
Spring is always the busiest time of year for downtown Chicago apartment rentals and this season has been no different. Even though Chicago still feels like February, people are getting ready to move and excited about the upcoming thaw. There is one big problem though: apartments are scarce and prices are high….really high!
Day after day I get calls and emails asking for apartments with washer/dryer in unit, granite, stainless steel and the new luxury finishes everyone is seeking. People are also telling me they would like to spend $1600 on a spacious 1 BR.. Unfortunately, that is simply not available. True luxury apartments have gone up as much as 20% since last year and it’s tough to find a luxury one bedroom any less than $2000…and that doesn’t include parking!
Here are the top three questions I have been asked lately and my take on the market:
Why are prices so high?
The answer is quite simple: supply and demand. There is a shortage of luxury apartments available for two reasons. First, all of the brand new, fancy places that came to market in 2009 and 2010 are occupied. People received great specials last year and they love their apartments. That leads to the second reason. The people that rented these luxury Chicago apartments don’t have any newer options and don’t want to buy condos, so there is little incentive to make a change. Owners and management companies are increasing rent just enough to maximize revenue and it doesn’t make financial sense to move. Supply and demand, plain and simple.
When are prices going to come down?
It’s going to be a while. There are no new downtown luxury properties set to deliver until 2013 and unless the Chicago condo sales picks up tremendously, people are just going to keep renting the nicest properties they can. There will be a slight dip at the end of the year as the weather turns but the prices and lack of availability is here to stay?
If the prices are so high, what can you do for me? Is there any negotiation?
As I mentioned, there is not a lot of availability so owners/management companies are not very likely to negotiate. The value we bring in this type of market is our market knowledge. We know the buildings that have vacancies and can find the best value such as lower floors to bring the price down and dog floor options that are even harder to find. We stay on top of these luxury properties each and every day to get updated availability and once you become our client, you are the first to know. The concept of client has become even more important in this environment.
There is no question prices are high and it’s not as easy to find apartments these days. However, downtown Chicago has never been a better place to live for the nightlife, restaurants, and world class shopping. Just be glad it’s not New York!
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