Near North Side (4.8 percent to $2,531) and the Loop (4.7 percent to $2,635), which ranks as the metro’s most expensive rental submarket. In the suburbs, gains were led by Grayslake (6.1 percent to $1,243), St. Charles (4.9 percent to $1,368) and Palatine (4.6 per- cent to $1,387). The median home price in Chi- cago rose to $235,080 in 2018, up 1.3 percent year-over-year and 17 percent above the 2011 level, indi- cating the market’s stability over the past seven years. The average mortgage payment accounted for 16 percent of the area median income, while the average rent equated to 25 percent. Chicago’s population has been decreasing while also undergoing a transformation: The number of households with a total income of more than $100,000 has grown, while the total of those earning less has been declining. Many Chicagoans chose to move to neighboring states that offer more
CHICAGO COMPLETIONS AS OF SEPTEMBER 2019
SOURCE: YARDI MATRIX
Side, and Near South Side. In the suburbs, Yorkville led with 748 units underway, followed by Arlington Heights.
affordable housing and lower property taxes. The met- ro’s population contracted by nearly 67,000 residents between 2014 and 2018, for a 0.9 percent downtick. Overall, though, Yardi Matrix predicts healthy absorp- tion and solid rent growth through 2020. SUPPLY The pace of multifamily development has been strong over the past five years, and this trend could continue, sustained by steady growth across high-paying indus- tries. Possible headwinds could arise from rising labor and materials costs; additional government regulations requiring developers of downtown projects to contrib- ute to an affordable housing fund; as well as concerns over changes in property assessments that could fur- ther increase real estate taxes. As of September, the metro’s pipeline also included more than 79,000 units in the planning and permitting stages. Construction is strongest in urban submarkets, par- ticularly in the Loop (4,756 units underway as of Sep- tember 2019), and on the Near West Side, Near North
TRANSACTIONS Nearly $1.4 billion in assets traded in Chicago this year through September, at an average per-unit price of $181,824, below the $191,800 cycle high of 2018, when sales volume reached $3.9 billion. The slowdown can be attributed, in part, to potential changes in prop- erty tax legislation. Opportunity Zones, however, are boosting investor demand, especially in the city’s South Side area, with buyers able to reinvest unrealized capital gains while also capturing major tax incentives, especially for properties that need significant renovations. F&F Realty’s $79 million buy of Twin Lake Towers, a 399-unit community in Westmont, ranked as one of the largest suburban deals of 2019. Aimco sold the prop- erty in May at $197,995 per unit. In March, Hayman Co. bought the 568-unit Lakeside Apartments in Lisle for $100 million, or $176,056 per unit. •
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