How did the local rent markets close out the year?
The Chicagoland rental market may have finally fallen back to earth in 2015, according to new analysis from Reis.
For the 12-month period ending in December, Chicagoland rents rose 3.8 percent, slower than the 4.6 percent national average and far behind cities such as San Francisco, where rents jumped 10.7 percent. Similarly, Chicagoland’s rent growth from the third quarter to the fourth quarter was 0.8 percent (consistent with the national average), and its average effective rent, at $1,159.32, was slightly lower than the $1,179.22 national average.
The cause for Chicagoland’s moderating rents is likely a simple case of supply and demand. Thousands of new rentals have entered the Chicagoland market over the last year, and that added supply has likely contributed to the market’s slowing rents; thousands of additional units are expected this year, which should keep rents in check.
However, Chicagoland’s rental market is still no picnic. Nearly one million renter households throughout the area struggle with housing costs, according to the Joint Center for Housing Studies of Harvard University, and as long as rent increases continue to outpace incomes, such consumers will have a hard time making the shift from renting to owning.
See our graphic below for an idea of how our local rental market compares with other major markets: