The Rental Market in Chicago: How COVID-19 Has Affected the Leasing Landscape
COVID-19 has affected every sector of the economy and the leasing market was certainly not spared. With the country still grappling with the new normal and the unknown, a lot of multifamily real estate owners are asking, if the leasing market will sink, steady, or skyrocket?
In 2020, 33 Realty saw drastic drops in prices and occupancy along with increased concessions. Most buildings were offering 1-4 months of free rent to attract new tenants. In 2021, concessions are down 50-75% at luxury buildings to an average of 0-1.5months free.
A key factor that helped this shift was the ‘return to office’ which brought nearly 2 years of college graduates back to the rental market. Last year, when most companies were working remotely, people lost interest in staying in housing near their jobs and figured they could save more money living elsewhere. Thus, we experienced the exodus of urban rentals.
Now that we are seeing a hybrid of at home and in office work, the leasing market is balancing itself out. With employees returning to the office and college graduates returning home, things are stabilizing. While many are still working remotely, the demand for larger apartments is increasing. Renters are willing to increase their budget for more space and a more conducive environment to separate working and living from home. Whether it’s an extra bedroom, larger bedrooms or a den, renters prefer more space.
The demand rebound that began last year has resulted in rent gains. Coupled with less concessions, we are seeing a nice leveling out of the Chicago rental market.
For more information, please contact Mark Kurgan, 33 Realty Director of Leasing at 847-651-5868 or [email protected].