Chicago Multifamily Report – Summer 2019
The metro remains one of the few gateway markets that face a housing deficit in the year ahead, despite the record number of units scheduled for completion by year's end.
Chicago rent evolution, click to enlarge
Chicago’s deep talent pool continues to fuel the economy and demand for housing. The metro remains one of the few gateway markets that will be confronted with a housing deficit in the year ahead, despite the record number of units expected to come online this year.
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The metro added 39,900 jobs in the 12 months ending in May, with one third in education and health services (13,300). However, manufacturing was the top-performing employment sector, as it added 8,300 jobs for a 2 percent year-over-year uptick, the most significant jump among sectors. The expansion of automotive giants in the metro such as Ford Motor Co. was one of the main reasons that led to the increase. When it comes to office-using jobs, coworking providers are stealing the show, reflecting the strength of Chicago’s tech sector. WeWork is closing in on the 1 million-square-foot mark in the city’s downtown.
Chicago sales volume and number of properties sold, click to enlarge
In the first five months of the year, multifamily sales volume reached $916 million. Investors prefer well-positioned Renter-by-Necessity assets and tight competition led to a surge in price per unit, which peaked at $206,234 in 2019. Despite the 10,470 units anticipated to come online this year, demand is expected to outpace supply through 2020. Strong demand will also help rent growth pick up and reach 2.8 percent for the whole of 2019.
