Real estate experts say Chicago’s downtown apartment market appears in balance, at least for now. While they’re not projecting big rent growth, they’re also not projecting problems with supply.
Rent growth and leasing activity slowed some in the third quarter. Despite a prolonged wave of construction, the market seems to be holding up. For Class A apartment buildings, the average net rent was $3.10 per square foot for the quarter.
That’s up more than 1.5-percent from a year ago, but the smallest year-over-year rent increase since late 2017. The Class A occupancy rate in the downtown area fell just slightly for the third quarter year compared to the same time last year.
Analysts say that suggests more of a slowing than a downturn. The area still remains a landlord’s market, as many downtown residents prefer to rent. Demand for those apartments remains high, so tenants likely won’t find many deals in the near future.
Developers have started to pull back a little bit, perhaps in part to the risk of higher property taxes and rising construction costs. Developers are expected to complete 3,800 downtown apartments by the end of the year.