Chicago Q2 Multifamily Market Insights: Significant operational strengthening supporting investment outlook
Highlights:
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- Multifamily property performance metrics improved in Chicago during the second quarter. Vacancy tightened to a five-year low, and the pace of rent growth accelerated. Operating conditions will likely remain healthy for the next several quarters as deliveries of new units should closely align with demand growth.
- Local vacancy improved in recent months, dropping 40 basis points in the second quarter to 4.8 percent. During the past 12 months, the rate has tightened by 100 basis points.
- Rent growth accelerated after remaining mostly flat at the start of the year. Asking rents rose 3.5 percent during the second quarter to $1,748 per month. Year over year, rents in Chicago are up 16.2 percent.
- Sales velocity during the second quarter was similar to levels recorded at the start of the year. Prices rose in response to the strengthening fundamentals and rising rents; the median sales price year to date reached $160,800 per unit. Cap rates averaged roughly 5 percent.
