RENT PRICES CONTINUE TO INCREASE IN LAKEVIEW

If you read my blog a couple months ago you might remember that I said rent prices in Lakeview increased by over 15% from the same time period the previous year (March 1st to May 15th). Since some time has passed I decided to run numbers again and here is what I found out….

I used the Month of June to pull data. June 1st to June 30th. Here it is:

June 2010: 177 Units rented during this time with an average price of $1,672.06

June 2011: 216 Units rented during this time with an average price of $1,895.78

This is an increase of roughly 13.3%. Not as high as the 15%+ we saw a couple months ago but still very high. Typically we will see June rents higher than earlier months as we are starting to see less supply on the market and more renters in the market. From March 1st to May 15th of this year the average rent was $1,797.15.

With apartments being snatched up left and right what can you do to make sure you get the place you really want?

1 – Check your Credit! The first thing a landlord wants to know is how good your credit is. If you have bad credit, then you better start putting together a battle plan. Get a Co-Signer, save some money so you can pay a few months in advance to show good faith, etc.

2 – Have Paystubs / Proof of Employment in order! Most landlords will require that you provide proof of employment which can come in multiple forms but the most common are paystubs. Get these items in order before you apply for a place so as soon as you see a place you like you can jump on it!

3 – Be Willing to Move in ASAP! Right now Landlords have the luxury of not having to worry about their place being vacant. Which means if it is empty on July 1st they will more than likely not take a tenant any later than a July 15th move in. You may have to move in a couple weeks earlier than you truly need in order to secure the place.

4 – Be Up Front about Pets! If you have a Dog or a Cat know that this will limit your options. While many people may love dogs, they may not trust their owners and may not want them in their rental property. The best thing to do is to make sure you are up front about the type of pet that you have and explain it right away in the application process. Landlords do not like to be blind-sided and if they are, they will automatically start thinking the applicant is dishonest.

5 – Be able to turn over $$$ right away! Typically once a lease is signed First Months rent AND Security Deposit, along with any additional fees are turned over right away. Make sure you are in a position to do this. Unless checks are turned over the lease can be thrown away, so make sure you have the money ready to go so you don’t lose the place you love.

RENT PRICES SKYROCKET IN LAKEVIEW/BOYSTOWN

We all have read or at least heard the stories regarding residential rent prices going up, but by how much? In one of my last blogs I reported that the downtown rental market saw an increase of just over 13% from the same time last year (February through April). However, many of my recent Lakeview clients have started to become frustrated with the lack of good inventory on the market. So, I decided to run my own numbers for Lakeview and this is what I found:

2010 from March 1st to May 15th: 384 Units Rented with an Average Price of $1,554.31

2011 from March 1st to May 15th: 468 units Rented with an Average price of $1,797.15

This is a year over year increase of a whopping 15.6%, a significant difference from the increase downtown. However, what about other areas such as Lincoln Park? Then what about areas further north such as Uptown and Edgewater? Everyone says that Uptown and Edgewater are cheaper to live in than Lakeview but are the same things happening to prices up there?

First, lets start south in LINCOLN PARK:

2010 from March 1st to May 15th: 273 units rented with an Average Price of $1,831.95

2011 from March 1st to May 15th: 304 units rented with an Average Price of $2,053.52

This is a year over year increase of 12.1%

If we head north to UPTOWN:

2010 from March 1st to May 15th: 87 unit rented with an Average Price of $1,393.36

2011 from March 1st to May 15th: 126 units rented with an Average Price of $1,393.40

Virtually no change at all! While more units were put on the MLS for rent, rents remained stable.

Again, if we head even further North to EDGEWATER:

2010 from March 1st to May 15th: 73 units rented with an Average Price of $1,158.22

2011 from March 1st to May 15th: 109 units rented with an Average Price of $1,188.86

This is a 2.6% increase from the same time last year. A very modest increase, something that can be expected in a healthy economy.

So the question is, why are certain areas seeing rent increases and others not? Well, I believe there several factors.

Areas such as Lincoln Park and Lakeview are very desirable. As incomes start to increase again for those who have jobs, these are the first areas people want to live in and move to. For those who are new to Chicago, these are the areas where all the restaurants and bars are. These are the areas where many Chicago transplants may have friends and family living. It is a natural area to look for a place to rent if you are new to Chicago, if you are moving out from your parents home, etc.

What I believe is fueling the demand and increase in the # of rentals for Edgewater and Uptown are area residents who want to get more for their money. Uptown and Edgewater have nowhere near the amount of bars and restaurants that Lincoln Park and Lakeview do, however, they do offer very nice communities and a much great value for the dollar. I believe throughout the year and into 2012 we will see a steady increase in rent prices in Edgewater and Uptown, however, nothing in double digits. Furthermore, I believe we will see continued growth in rent prices in Lincoln Park and Lakeview, however, we are starting to near a ceiling. 15.6% growth in Lakeview is simply not sustainable, especially when there are neighboring communities, along the same transportation routes for a fraction of the cost.

The last contributing factor are the sales prices are condos in these areas. Areas such as Uptown and Edgewater saw a great decrease in prices over recent years, while Lincoln Park and Lakeview simply did not. Therefore, rents have more room to increase in Lakeview and Lincoln Park because housing did not decline to levels that entice renters to give up their flexibility and buy a home. However, in Uptown and Edgewater there are many properties that have declined in price 20%, 30%, and even more in price and the perceived value of buying in these areas versus renting are greater.