April 08--Chicago's apartment market is holding up better than the nation's overall, with a first-quarter vacancy rate unchanged at 3.8 percent from the preceding period, while the nation's rose a tick, a new study shows.
In good news for Chicago renters, however, the cost to lease a place here is climbing at a slower pace than it is nationally, according to Reis, a provider of commercial real estate data.
Average rents in 79 U.S. metro markets rose 0.5 percent from the preceding quarter -- the slowest rate of increase since 2011 -- while Chicago's average was up 0.3 percent.
In downtown Chicago, new apartments are going up in record numbers.
Overall, vacancy rates in the nation's apartment stock have been rising and are at their highest since late 2012, Reis said.
The vacancy rate nationwide has continued to edge up over the past year, to 4.5 percent in the first quarter, up from 4.2 percent in the same period last year. In that same time frame, Chicago's vacancy rate has risen to 3.8 percent, up from 3.5 percent.
"This is the beginning of an upward trend in vacancy that should persist for at least the next five years," Ryan Severino, Reis senior economist, said in the report. New construction is occurring faster than it can be absorbed, he said.
Chicago's effective rents are increasing at a slower pace than they are nationally.
Over the past year, effective rents are up 4.5 percent nationally and 3.4 percent in Chicago.
Effective rent is lower than asking rent and accounts for special concessions or free rent that landlords might give out, effectively lowering the rent.
Chicago's average effective rent in the first quarter was $1,166.
byerak@tribpub.com
