LAKEVIEW RENTAL PRICES – HOW MUCH HAVE RENTS GONE UP IN LAKEVIEW?

The rental market in Lakeview, and throughout the majority of the city saw a very strong 2011. During the “hot months” of the rental season, May through October, I saw multiple applications submitted on most rental properties I dealt with. During these times rental prices were up dramatically, in some cases by over 10 and 12%. The real question is, how did the market handle itself over the entire year including the winter months? Here is the data. To better under this data and why I am using it please quickly read this following blog I wrote previously concerning the leasing market in Chicago. HOW TO UNDERSTAND THE RENTAL MARKET IN CHICAGO

LAKEVIEW

The Lakeview neighborhood is comprised of several areas including but not limited to East Lakeview, Boystown, Wrigleyville, Southport Corridor and West Lakeview. All these areas and everything in between were included in my search. The search area on the MLS is known as “8006.” Data was combed to exclude any “extreme” numbers as well as to exclude any listings that were rented before print or any listings with a market time of greater than 150days as these listings do not represent typical scenarios in the rental market.

ONE BEDROOMS

2010   Units Rented: 515     Average Market Time: 32days    Average Price: $1,203.28

2011    Units Rented: 492     Average Market Time: 23days    Average Price: $1,288.00

Total Price Increase of 7.04% with Average Market Time declining by 9 days.

TWO BEDROOMS

2010   Units Rented: 547     Average Market Time: 40days    Average Price: $1,719.39

2011    Units Rented: 782     Average Market Time: 29days    Average Price: $1,898.68

Total Price Increase of 10.43% with Average Market Time declining by 11 days. Also very interesting is that the number of units rented increased by 43% yet we still had a substantial decrease in market time as well as a substantial increase in price.

THREE BEDROOMS

2010   Units Rented: 259    Average Market Time: 38days    Average Price: $2,321.22

2011    Units Rented: 355    Average Market Time: 29days    Average Price: $2,479.89

Total Price Increase of 6.84% with Average Market Time declining by 9 days.

When we look at this data what does it tell us? The most important number we want to look at is Market Time. Market Time will always be the first to change when supply and demand shifts. Prices will change after a sustained period of increased Market Time. Market Time will always shift from month to month as some months are more popular for renting than others. If we were to  break the data down month by month we would want to compare October 2011 to October 2010 for example, as opposed to October 2011 to September 2011.

What does all this mean for the 2012 rental season? In my opinion the 2012 rental season will remain very strong. I believe we will see moderate price increases, however not some of the double digit growth we saw last year. If we just look at the numbers you might say I’m wrong. Look at the 2 Bedroom data. We saw an increase in price by 10% plus an increase in supply by 43% and a decrease in market time! Just looking at these numbers one might say “Well, if supply doesn’t increase at all we very easily could see an additional 10 or even 15% increase in price again.” If Lakeview was an isolated market, then yes this could be true. However, we must take our blinders off and consider other neighborhoods as well such as Buena Park, Uptown, Anderonsville, Edgewater, and others that can be comparable substitutes for those looking in Lakeview. It is these substitute areas that will help absorb some of the demand from Lakeview as renters get priced out.

 

Paul Blackburn is an Illinois licensed Realtor and Broker with @ Properties in Chicago. His experience ranges from new construction development, condo conversion and luxury restorations to residential leasing and sales throughout Chicago. He has served as an expert witness on both residential and commercial property values and has been interviewed by numerous sources such as Fox News Chicago and the Chicago Tribune.  CONTACT PAUL AT ANYTIME FOR ASSISTANCE SEARCHING FOR A NEW HOME, TO SELL OR LEASE AT PAUL@PKBLACKBURN.COM

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HOW MUCH HAVE RENTS INCREASED IN CHICAGO?

How much have rents truly increased in Chicago? Now, with a typical rental season now behind us we can look at all the data and that is just what I have compiled for you. The main rental season is considered from April 1st through October 1st. However, I expanded a month on both sides and researched my data from March 1st to October 31st in 2010 and 2011. I only used RENTED Comparables from the MLS during this period. I’ve broken down the research into the following areas. The numbers next to the areas represent the “Area Number” in the MLS System.

Loop (8032)

River North, Gold Coast, Streeterville, Old Town (8008)

Lincoln Park (8007)

Lakeview (8006)

When I started putting the data together I further broke down the data by number of bedrooms. We obviously want to compare apples with apples here so we don’t have the numbers skewed. If for instance more 2 bedrooms rented in 2011 than in 2010 this may make our average rent price greater if we did not remove 1 bedrooms from the equation. So here are the numbers

CHICAGO LOOP (8032)

Studios

Average Price in 2010 $1,168

Average Price in 2011 $1,206          3.25% Increase 

One Bedrooms

Average Price in 2010 $1,512

Average Price in 2011 $1,620     7.1% Increase 

Two Bedrooms

Average Price in 2010 $2,215

Average Price in 2011 $2,338     5.55% Increase

Three Bedrooms

Average Price in 2010 $3,739

Average Price in 2011 $3,595       5.9% Decline

Why the decline in 2011? Hard to say. The rest of the market is up, however the sampling we had was small. Only 64 units rented in 2011 and 61 rented in 2010. For purposes of the MLS the “Loop” is bordered by the River to the North, Lake on the East, Roosevelt to the South and Halsted on the West.

CHICAGO NEAR NORTH SIDE: RIVER NORTH, GOLD COAST, STREETERVILLE & OLD TOWN (8008)

Studios

Average Price in 2010 $1,113

Average Price in 2011 $1,221     9.7% Increase

One Bedrooms

Average Price in 2010 $1,585

Average Price in 2011 $1,729     9.05% Increase 

Two Bedrooms

Average Price in 2010 $2,539

Average Price in 2011 $2,781   9.56% Increase

Three Bedrooms

Average Price in 2010 $4,400

Average Price in 2011 $4,830   9.78% Increase

The Near North area comprises several neighborhoods including River North, Gold Coast, Streeterville and Old Town. The borders are the Lake to the East, River to the South, North Avenue to the North and Halsted to the West. This area was relatively consistent in their year over year price increases no matter what size unit, whether it was a studio or a 3 bedroom.

CHICAGO LINCOLN PARK (8007)

Studios

Average Price in 2010 $887

Average Price in 2011 $990       11.56% Increase

One Bedrooms

Average Price in 2010 $1,302

Average Price in 2011 $1,427       9.6% Increase

Two Bedrooms

Average Price in 2010 $1,967

Average Price in 2011 $2,073    5.4% Increase

Three Bedrooms

Average Price in 2010 $2,852

Average Price in 2011 $3,003    5.31% Increase

CHICAGO LAKEVIEW (8006)

Studios

Average Price in 2010 $851

Average Price in 2011 $876    2.9% Increase

One Bedrooms

Average Price in 2010 $1,209

Average Price in 2011 $1,300   7.52% Increase

Two Bedrooms

Average Price in 2010 $1,699

Average Price in 2011 $1,889   11.19% Increase

Three Bedrooms

Average Price in 2010 $2,297

Average Price in 2011 $2,440   6.22% Increase

 

PAUL BLACKBURN – REALTOR

@ PROPERTIES

PAUL@PKBLACKBURN

www.TheChicagoRealtyBlog.com

 


RENT PRICES CONTINUE TO RISE AS SUMMER ENDS

Rent prices have continued to rise, as expected in Class A Chicago markets such as River North, Gold Coast, Streeterville, Lincoln Park and Lakeview.

The following are my own stats for the time period of July 1st to August 15th.

“Near North Market” Comprised of River North, Streeterville, Gold Coast, & Old Town

2010 – Total of 497 Units Rented with an Average Rent Price of $1,978

2011 – Total of 446 Units Rented with an Average Rent Price of $2,182

TOTAL INCREASE IN “NEAR NORTH MARKET” OF 10.3% YEAR OVER YEAR

Lincoln Park

2010 – Total of 161 Units Rented with an Average Rent Price of $2,166

2011 – Total of 229 Units Rented with an Average Rent Price of $2,251

TOTAL RENT INCREASE FOR LINCOLN PARK OF 3.9% YEAR OVER YEAR

Lakeview

2010 – Total of 335 Units Rented with an Average Rent Price of $1,632

2011 – Total of 335 Units Rented with an Average Rent Price of $1,892

TOTAL RENT INCREASE FOR LAKEVIEW OF 15.9% YEAR OVER YEAR

While Lakeview and the Near North Market have similar increases to previous months we see Lincoln Park only saw a 3.9% increase…what can explain this? What I believe we need to look at in Lincoln Park is the total average rent price. We saw that last year during July/August the average rent price of already relatively high, above $2,100 which would make it higher than the downtown market. In comparison to other months, this is unusually high for Lincoln Park. I contribute this to a few different factors, but mainly I believe due to DePaul’s school year (trimester schedule) which has many people looking for apartments around this time frame. Since this time of year is already unusually high, rent prices cannot truly act in accordance with other markets such as Lakeview or Downtown. I believe with an average rent price of $2,251, Lincoln Park is starting to cap itself off. With this pricing, renters can easily look at more desirable areas such as River North or Gold Coast and those renters who cannot afford to pay the higher prices in Lincoln Park probably moved further north to Lakeview where their dollar stretches more. This could account for the very high 15.9% rent increase in Lakeview.