Wicker Park Rentals – New Development to Meet Demand

Both Wicker Park and Bucktown have recovered leaps and bounds better than most neighborhoods after the crash. Rentals in Wicker Park and Bucktown have sky rocketed in price year after year. While the sales inventory in Wicker Park and Bucktown is slim to none so are the rentals. However, a new building is bringing new inventory.

I’ve represented a building in Wicker Park for almost three years called “Vision” which is located at 1624 W. Division. See photo below:

Vision_FrontPhotoVHTFor those of you not familiar with this building it sits next to the CVS on the corner of Division & Ashland (North West corner). My client owns the entire building. It was originally built as condos but as the real estate market took a turn for the worst several years ago my client decided to rent out the entire building instead. When we first came to market we were starting rent prices around 2200/2300 for a Two Bedroom / Two Bath unit. Now, our cheapest is $2,800 for a Two Bedroom and our Three Bedrooms are starting at $3,500. Demand remains strong with units rarely lasting more than a week or two on the market. We even rent some before placing them on the MLS.

The concept for our building are very high end finishes, tall ceilings and massive living spaces. Our smallest unit is 1338sf. The majority of this space is in the living room / kitchen.

Across the street 1611 W. Division has popped up. You may recognize it by its futuristic design. See photo below:

1611Division_1While our development is only comprised of 33 units plus retail space, this development boasts 99 units. Many of which are Studios and One Bedrooms. Pricing will vary but will be around $1,500 for smaller units and obviously much more for two bedrooms. This development, however, is going after a different type of consumer than we are. These units are small, but efficient. The building has only 9 parking spaces which are reserved for the 2 bedroom units. This building is being marketed as a “commuter building.” There is no doubt their studios and one bedrooms will rent out quickly as they are rare in Wicker Park and Bucktown. While some believe “no parking” will be an issue for the building it is right off of the blue line which offers quick transportation to the loop and ORD as well.

Buildings like this show the increased demand for quality housing in Wicker Park and Bucktown without breaking the bank, albeit you won’t have too much living space. Our building, however, at 1624 W. Division has set the new high end rent standard for Wicker Park. While many thought we were crazy and would not be able to achieve the rent prices we were asking in 2011, we’ve definitely proven them wrong. Rent prices do continue to rise in the area. 1611 Division is a perfect example of “Build It and they will come.”

 

Rental Inventories DOWN all over Chicago – Wicker Park, Bucktown, Lakeview & More

Inventory levels appear to be down all across Chicago, at least as far as rentals are concerned. Last year around this time I would forward clients lists of properties. They would pick out the ones they like and I would make calls and send out e-mails to schedule appointments. Last year, roughly half the responses I would get would be “Sorry, this condo has been rented.” This year however there are not many places on the market that I can even call!

Let me give you a few examples. I just ran an MLS search for Wicker Park & Bucktown for rentals between $1,500 and $4,000/mo. That is a huge price range and should typically yield a decent number of results. Well, there are only 22 units on the market in Wicker Park and Bucktown in this price range many of which already have applications pending.

Other areas such as Lakeview and Lincoln Park are seeing the same problems; limited inventory. In a normal market this may mean that less people are moving and therefore there are less people looking. However with more people choosing to rent than buy demand continues to remain strong and inventory levels are dropping as many tenants are choosing to renew leases as opposed to take their chances with the fast moving rental market.

Absorption Rate: Absorption rate is a number that tells us how long it will take a market to absorb new units coming on the market. What we do is we look at how many units are currently available versus how many units have either rented or sold over a certain time period in order to figure out how long it would take to go through the current supply.

Lets take a look at some of the current absorption rates in some popular neighborhoods so you can see how quickly the rental market is moving. I’m using a wide but common price range of $1,500 to $4,000

Lincoln Park: 47 Units Available. 97 Units rented in the past 30 days which means there is currently only 14.5days of inventory on the market in Lincoln Park. In other words, if no new rentals come on the market there will not be any units available in 2 weeks.

Lakeview: 79 Units Available. 103 rented in the past 30 days which means there is currently 23days of inventory on the market.

River North / Gold Coast / Streeterville: 143 Units Available. 195 Rented in the past 30 days which means there is currently 22days of inventory on the market.

South Loop: 93 Units Available. 99 rented in the past 30 days which means there is currently 28.1days of inventory on the market.

Bucktown / Wicker Park: 22 Units Available. 39 Units rented in the past 30 days which means there is currently 17days of inventory on the market.

Lake Shore East: 22 Units currently available. 20 Units rented in the past 30 days which means there is currently a 32day supply of inventory on the market.

 

Paul Blackburn is a licensed Illinois Realtor & Broker with @ Properties Chicago. He can be reached via e-mail at Paul@PKBlackburn.com