Chicago landlords who have already profited from the national tilt toward rental popularity will have been further cheered by last month’s Zillow report on the growth of rents across the nation. They might be including apartment housing in their data, but in any case, according to the report, rent revenue is accelerating (except in Milwaukee).
Landlords had to be pleased everywhere else. Rents were up in every one of the nation’s top 50 markets—except for the unlucky Wisconsin metro. The solid 3% year-over-year growth figure meant that rent proceeds have been rising at the fastest clip since early in 2016. The national averages for the intervening years were lower for a number of reasons. Key among them was that the new rental properties were largely built for a single market—the “above-average” quality market. The result was a relative glut in new offerings that forced price competition during initial lease-up periods.
Chicago landlords might also take as good news the continuation of a lack of U.S. for-sale inventory. It fell another .8% annually. The author of the report, Skylar Olsen, found 12,128 fewer homes for sale than in the previous year. The relative dearth of houses offered for sale has been a leading factor in the relatively slow pace of housing sales—and a boon to the rental market.
According to Olsen, “demand from renters—both from existing tenants…and from younger, would-be tenants beginning to strike out on their own—remains strong.” Proof is easy to come by: annual rent growth has accelerated in every one of the past nine months.
For investors currently appraising Chicago properties with a mind to joining the ranks of our own Chicago landlords, the latest home loan interest rate drop should come as a nudge to action. Along those lines: giving me a call is a good no-obligation step toward a most profitable venture!