Chicago Multifamily Report – January 2023
Rent growth slowed, but investors kept closing deals across the city.
Chicago’s multifamily market followed national patterns, as inflation and other economic headwinds produced noticeable effects. The metro’s rent growth recorded only a 0.1 percent uptick on a trailing three-month basis through November but also remained 20 basis points ahead of the national rate. The average rent reached $1,816, $97 above the U.S. average.
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Economic improvements continued through the year, as the metro’s unemployment rate clocked in at 4.4 percent in October, preliminary data from the Bureau of Labor Statistics shows. This was a 70-basis-point drop from January 2022, but still behind the 3.7 percent U.S. rate. Over a 12-month period ending in September, the metro’s labor pool expanded by 4.4 percent —20 basis points higher than the national rate—representing an addition of 202,600 jobs across all sectors. The $3.6 billion project to extend the Red Line in South Side Chicago received a funding boost. The city council approved a Transit Tax Increment Financing district, which is expected to fund $959 million of the total cost.
Construction activity slowed down in 2022, with developers bringing 5,866 units online year-to-date through November—a 1.5 percent expansion of stock. This was a 15.3 percent drop from the same period in 2021 and 50 basis points below the U.S. rate of construction. Meanwhile, investor appetite remained high, as $3 billion in multifamily sales was generated during this period.