While the number of rental condos in downtown Chicago is still higher than in years before 2008, YoChicago is reporting that rental numbers have decreased substantially over the past six months. Higher numbers of Chicago condos for rent in the past two years have been caused by many condo owners and investors renting their condos when they couldn’t find buyers for them in the slow real estate market. Now, as sales are picking up and peak rental season begins, there are fewer and fewer condos in downtown Chicago available for rent.
Rental Condos in Downtown Chicago Before and After ‘08
In the 14 zip codes that make up the downtown Chicago area, the number of condos for rent before 2008 averaged at a much lower level than now. Renters were drawn to apartment complexes and and other typical renting situations. But the market crash caused a large increase in “accidental landlords,” or condo owners forced to rent to cover their expenses and avoid foreclosure.In 2009, the number of rental condos skyrocketed to record high numbers– the number of condos listed to rent nearly doubled from the previous year. Rental condos became significant competition to traditional rentals, and Chicago renters were certainly taking advantage of new renting opportunities. According to a report by Appraisal Research Counselors, renters were using the internet to make savvy deals, too: “Access to rental information is readily available on the Internet, creating a highly informed renter with regard to options in the market. Listings on Craigslist have increased notably over the past year for downtown units.”
For renters, this provided a great value. Generally, these “accidental landlords” charged a fairly low rent– just enough to cover their mortgage. For those who weren’t ready to buy, renting from a condo owner in the downtown area had been a convenient option. These days, with a strong buyer’s market providing incentive to buy, Chicago rental condos are starting to shrink in number again.Rental Condos in Downtown Chicago in the Past Six Months
While many real estate experts predicted that the number of rental condos would escalate through the end of 2010, the past six months have shown a different trend. Condo prices were still depressed and there was the added incentive of the tax credit deadline for buyers, and they have been taking action. Since just after Thanksgiving of last year, the number of downtown Chicago condos for rent fell from 1,927 condos listed to only 1,448 at the end of April. A full 25% decrease in the number of condos listed for rent was an unexpected downward turn for rentals downtown.As buyers find the confidence to return to the market, and the value of buying starts to exceed the value of renting a one-off condo, it shouldn’t have been totally surprising that the huge number of condos for rent that were on the market in 2009 began to decrease. The condo rental numbers going down might be an early indicator of growing stability and a return to status quo in the Chicago real estate market.
If you are a renter looking to take advantage of a good deal downtown by renting a condo, now is the time to act before this option becomes more rare. As a condo owner who was renting out their property, now might be the time to re-list your condo for sale. Contact a knowledge agent today to consult on the decision.
