The Chicago multifamily market has begun its recovery, with rents up 1.6 percent on a trailing three-month (T3) basis to $1,648 in July. Overall figures remain more than 9 percent higher than the national average of $1,510. Reversing the trend from last year, Chicago’s Lifestyle rents outperformed working-class Renter-by-Necessity rates, up 2.0 percent and 1.3 percent, respectively, on a T3 basis. This marks a reversal from 2020, when RBN growth largely remained flat, as upscale rents dropped in the wake of the health crisis.
The metro added 303,700 jobs during the 12 months ending in May, an overall gain of 7.3 percent year-over-year. More than one-third of this growth occurred in the leisure and hospitality sector, which has yet to recover to pre-pandemic levels. All but one employment sector reported gains, but an uptick in Chicago’s unemployment rate to 9.2 percent in June—330 basis points above the national figure—underscores the metro’s long road to recovery.
Although more than 16,000 units were under construction at the end of July, Chicago’s development activity has slowed: Only seven multifamily projects had broken ground since January, and some 4,500 units are anticipated to deliver this year, a decline from the 7,969 units completed in 2020. Multifamily transactions through July totaled $1.4 billion, an 11.5 percent increase compared to last year’s overall activity, as investors overwhelmingly targeted RBN assets.