Apartment rents in Chicago and Illinois are rising fast

Wages are not rising fast enough for many Chicago renters. Head to the suburbs, right? In some Chicago suburbs, rents are actually more expensive.

Chicago apartment dwellers are seeing some of the fastest rental price increases in the nation this spring and summer, reports a new market study.

A typical one-bedroom unit in downtown Chicago now leases for a hefty median rent of $1,840 a month – the second most expensive city in Illinois, according to Zumper’s Chicago Metro Area Report.

Renters who are thinking of heading to the suburbs for some financial relief should look at the Zumper numbers. Compared with the city, rents actually are more expensive in some Chicago suburbs.

The most expensive town to rent an apartment in the state is west suburban Lombard, which posted a one-bedroom median rent of $2,030, up a whopping 37.2 percent since last year.

“The reality is that multifamily apartment rents are rising everywhere – and fast,” said the Zumper report.

One way for renters to save some bucks is lease a compact apartment in downtown Chicago, which is known for offering some of the tiniest newly-built apartments in the nation, reports RentCafe.com, a nationwide apartment search website and part of the Yardi network.

“In the Windy City, a monthly rent of $1,500 will only lease you an average of 502 square feet of apartment space – the equivalent of a studio or one-bedroom unit,” the RentCafé report said.

Nationally, a monthly rent of $1,500 will lease you an average of 782 square feet of apartment space. Currently, Chicago is the 15th most popular rental apartment city in the United States, according to RentCafé. In May, renters found Chicago more appealing than such major cities as Washington, D.C., Boston, Seattle, Charlotte, or Houston.

The Home Front found the following assortment of available rentals in lakefront neighborhoods on Apartment List:

Lincoln Park. There are 285 units currently listed for rent in this neighborhood. At the Belden Stratford, 2300 North Lincoln Park West, renters can choose from 109 available units in the renovated former hotel. Studios with 556 square feet go for $2,610. One-bedroom units with 683 square feet rent for $2,818. Deluxe two-bedroom layouts with 1,043 square feet lease for $5,112 a month.

For renters who can’t afford luxury apartments downtown or in lakefront neighborhoods such as Edgewater, Lakeview, Lincoln Park, and Old Town, some nice units are located in the first ring of neighborhoods outside downtown, noted Ron DeVries, senior managing director of Integra Realty Resources, a consulting and appraisal firm.

For example, in North Lincoln Square, apartment hunters will find a nicely renovated one-bedroom unit in a walk-up building priced at $1,350 a month. The two-bedroom layout with off-street parking included is renting for $1,450.

However, rents in some off-the-lake North Side neighborhoods also have risen 11-13 percent in the past year because of sharply higher real estate taxes, Realtors say.

For many, rents rising faster than wages

The big problem for Chicago renters in 2023 is that wages are not rising fast enough for many tenants to afford the median-rent apartment, according to a new report from Housing Action and the National Low Income Housing Coalition.

To afford a typical two-bedroom apartment in Chicago, a renter who works 40 hours a week needs to earn $27.69 per hour, or $57,600 per year. To afford a one-bedroom unit, a tenant who works a 40-hour week would need to earn $24.13 per hour, or $50,190 per year.

The minimum hourly wage in Chicago increases every year and is set to rise another 40 cents on July 1, reaching $15.80 an hour for non-tipped workers at the city’s largest employers.

The report said the average fair market rent for a one-bedroom apartment in Chicago currently is $1,255 per month, while two-bedroom layouts lease for an average of $1,440.

 

 

Source: Apartment rents in Chicago and Illinois are rising fast

https://www.creconsult.net/market-trends/apartment-rents-in-chicago-and-illinois-are-rising-fast/

Mason Square

Fully Equipped Car Wash For Sale
1250 Douglas Rd. | Oswego, IL | 3,750 SF | 6 Bays | 1.19 Acres
Mason Square Car Wash, a fully equipped and operational 6-bay carwash in southwest suburban Chicago’s Oswego, IL. Ideally located on an out-lot of the Mason Square Shopping Center along heavily trafficked Route 34, averaging 45,000 vehicles per day,
Listing Agent: Randolph Taylor 630.474.6441 | rtaylor@creconsult.net
https://www.creconsult.net/fully-equipped-car-wash-oswego-il-route-34/

3 reasons it can be smarter to rent, even if you can afford to buy

Have the money to buy a home? If you follow through, it may not be money well spent.

For generations, Americans have thought of homeownership as a hallmark of success. Even today, 74% of U.S. adults say owning a home is a cornerstone of the American dream — ranking higher than milestones like retiring, having a good career, getting a college degree or having kids, according to a recent Bankrate poll.

But there are reasons not to buy a home, even for those who can afford to do so.

“I don’t think it should be an automatic for everyone,” said certified financial planner Jude Boudreaux, senior financial planner with The Planning Center in New Orleans and a member of CNBC’s Financial Advisor Council. “You could live your whole financial life renting and be very happy.”

Here are three reasons it may be smarter to rent.  

1. You're unsure about the long term

Prospective homebuyers should have conviction about where they want to live, said Kamila Elliott, a CFP based in Atlanta and a member of CNBC's Advisor Council.

For example, would they enjoy living for several years in a particular city or suburb, or in a specific neighborhood? If they had relocated for a job, would they still want to live there if they lost that job?

If the answer to any of those questions is no, renting is likely best, said Elliott, co-founder and CEO of Collective Wealth Partners.

"If you can't commit to being there [at least] three years, don't buy," said Elliott.

Flexibility is a big plus for renters, Boudreaux said.

For example, if you move to an unfamiliar place, "renting can be a nice pathway," he noted, in order to avoid buying and then discovering you don't like the location.

The benefits can be both psychological and financial.

Home prices can be volatile, making it more likely a buyer wouldn't make a profit if selling after just a short period of ownership, Elliott said.

Upfront transaction costs like realtor's fees are also generally "very expensive," making it harder to break even on a short-term home purchase, Boudreaux said.

2. You don't like the 'nuisance' factor

There's also a certain lifestyle benefit to renting instead of buying, advisors said.

Renters don't have to deal with the "nuisance factor" of scheduling appointments with landscapers and exterminators or paying for home repairs, Elliott said. That's typically a landlord's responsibility.

"You don't have to worry about fixing the dishwasher, garage door, or HVAC unit," Elliott said.

Depending on the building, renters may feel safer if there are additional security cameras or a doorman, or get convenience and social benefits if there are amenities like a gym or pool, she added.

Conversely, a house may be the right lifestyle choice for someone who wants a big yard with a nice garden and room for a dog to run around, Boudreaux said.

3. Benefits of ownership are 'vastly overstated'

Richard Newstead | Moment | Getty Images

The financial benefits of homeownership are "vastly overstated," Boudreaux said.

"Buying a home because you feel it's the thing you should do can be [financially] dangerous" and lead to regret, he added.

For one, a financial assessment of affordability is incomplete if consumers only compare monthly rent and mortgage costs. The true cost of homeownership also includes costs for utilities, home improvements and maintenance, property taxes, and homeowners insurance, advisors said.

The average homeowner paid more than $15,000 a year in addition to their mortgage to cover these costs in 2022, according to Clever Real Estate.

Secondly, a tax deduction for mortgage interest isn't as valuable as it once was, Boudreaux added.

A 2017 tax law passed during the Trump administration reduced the mortgage interest threshold; married couples can claim a tax deduction on the first $750,000 of their mortgage, down from $1 million.

In a general sense, it's also more difficult to get the financial benefits of a tax deduction. The law doubled the standard deduction (it's $27,700 in 2023 for married couples) and capped a deduction for state and local taxes at $10,000.

Taken together, a tax break for mortgage interest "is not the benefit it used to be," Boudreaux said.

Of course, owning a home is often seen as an investment, as well as securing a place to live.

Homeownership "allows families to build wealth and serves as a measure of financial security," according to a 2018 paper by Laurie Goodman of the Urban Institute and Christopher Mayer of Columbia University. Home equity can play an important role in retirement savings, for example, if retirees are able to tap that wealth, they wrote.

But there are "substantial variations" in homeowner experience based on factors like purchase timing, holding period and location, they said.

For example, wealth building depends on one's ability to hold on to a home during downturns; lower-income and minority borrowers are less likely to do so, and thus benefit less from homeownership, Goodman and Mayer wrote. Additionally, homeowner returns "have been less favorable" in areas like Cleveland and Chicago relative to other metro areas like Los Angeles, Dallas and New York.

Historically, residential real estate returns and those of stocks have been "very similar and high," according to a paper published by the Federal Reserve Bank of San Francisco, which examined global investments from 1870 to 2015.

But in the U.S., investors have gotten a better net return on stocks relative to housing during that time: 8.3% versus 6% a year, on average, after accounting for inflation, according to the paper.

 

Source: 3 reasons it can be smarter to rent, even if you can afford to buy

https://www.creconsult.net/market-trends/3-reasons-it-can-be-smarter-to-rent-even-if-you-can-afford-to-buy/

Weak Macro Data Can Obscure Local Opportunities

Analyst: Weak Macro Data Can Obscure Local Opportunities

Don't overlook opportunities just because macro-level numbers suggest the market isn't performing well.    

Investors can and should closely evaluate the macro trends, considering population growth, job growth, household formation, income levels, and all the other major metrics.

But investors also need to dig under the surface, according to John Chang, National Director of Research and Advisory Services, Marcus & Millichap.

“As a friend of mine says, ‘Use a shovel, not a rake’ ” Chang said.

Chang said he encourages investors to look at macro-level factors when choosing market opportunities, but also, “not to overlook opportunities just because the macro-level numbers suggest the market isn’t performing well.

“By the same token, there are some markets that have really strong macro-level drivers, but they still may have poorly performing sub-markets.”

Population growth is a primary macro data point, he said.

“Investors often lock in on the strongest growth markets as a jump-off point for their investment strategies and aligning with that there has been a distinct increase in the flow of capital to the strongest population growth markets,” he said, pointing out those are mostly in the Sunbelt, including the southeast, the south, and the southwest.

But the two main markets in the mountain states, Salt Lake City and Denver are also up there, according to Marcus & Millichap.

For example, in 2010, these states comprised about 21% of the total commercial real estate sales dollar volume. By 2019, the dollar volume share going to those states was up to 27%.

Then as southward migration surged through the pandemic, this region’s share of commercial real estate dollar volume pushed up to the 34% range.

That wave of capital was a significant factor driving down Sunbelt cap rates in 2021 and ’22.

“Then as the Federal Reserve raised interest rates last year, the transaction flow ebbed and the share of investment capital to the Sunbelt receded to about 31%,” Chang said. The point is, “Capital has been following the population,” he said.

Chang said when he shows a map with dots on markets with population growth, some investors “are actually seeing giant bull’s eyes, but I have to remind them that there’s a lot more to the equation than just finding the fastest growing metros.”

Chang said some markets have fantastic growth on a macro level but still have significant local nuances that drive performance and opportunity

“By the same token, investors often look past metros that have weaker macro-level indicators, and as a result, those investors miss out on opportunities.”

Portland, Ore., is another example, albeit an “extreme” one, Chang said.

Its population has shrunk over the past couple of years and its apartment vacancy rate is a bit soft, up about 70 basis points from Q4 2019.

But when drilling into some of its suburban submarkets, the story is different.

The apartment vacancy rate in the Hillsborough submarket is 70 basis points lower in the first quarter of 2023 from Q4 2019.

The Southwest Portland submarket also has a lower vacancy rate, and the Vancouver submarket vacancy rate is flat compared to 2019.

“Bottom line is, don’t toss out markets just because they have weak macro level numbers, they could still have outperforming sub-markets and assets,” Chang said. “Yes, I’m cherry-picking data for this video but isn’t that what investors should be doing? Cherry-picking the best of the best. Dig under the surface, but remember, keep your eyes on the horizon.”

 

 

Source: Weak Macro Data Can Obscure Local Opportunities

https://www.creconsult.net/market-trends/weak-macro-data-can-obscure-local-opportunities/

Working with Corporate Occupiers: Corporate Real Estate Services Designation (CSD)

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Working with Corporate Occupiers: Corporate Real Estate Services Designation (CSD)

JULY 18 & 20, 2023, at 10 AM PT / 1 PM ET

This course teaches commercial real estate professionals how to secure and service corporate clients and provide value-added services through the field delivery/local side of the assignment.

By the end of this course, students will learn:

- How to approach and do business with corporate tenants

- How to distinguish clients’ business needs from their real estate needs

- How to provide field delivery (local delivery) of corporate services using proven tools and resources

*Please note, students are required to attend both 1.5-hour sessions to complete the course. This course if for eXp Commercial Brokers only. If you are interested in joining eXp Commercial: Info

[button text="Register" expand="true" link="https://www.powr.io/form-builder/u/c4b91e7f_1688588549?utm_campaign=eXp%20Commercial%20Advisor%20News&utm_medium=email&_hsmi=265930960&_hsenc=p2ANqtz-9o9_6M7B050QV3cYG1zMDIxciMgm9C3PeKyFArK8kBRRLTFsRnk7BUnVN96LVYAgBDUeRBOAE_o19htlAPKZ8BMx1r_GC7FnrCuu-x-0e5rJI2uSs&utm_content=265930960&utm_source=hs_email#page" target="_blank"] [/section] https://www.creconsult.net/market-trends/working-with-corporate-occupiers-corporate-real-estate-services-designation-csd/

Selling an Apartment Building FAQ's

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Top Frequently Asked Questions on Selling a Multi-family in Chicago

Are you thinking of selling your multi-family property?

Here are some of the most frequently asked questions we get from clients looking to sell multifamily properties in Chicago.

Before You Sell:

How is selling a multi-family different than selling a single-family home?

If you’ve sold an investment property before, you’ll be familiar with the ins and outs of selling a multi-family. However, if it’s your first time, you’ll learn that the process works differently than it would with a single-family or condo.

A large part of a multi-family’s sale appeal will lie in its cash flow. Buyers looking for a multi-family are looking for more than just a home: they will want to see a property that generates good rental income, rents easily, and provides a financial incentive for them to buy. This could be in the form of easy upgrades they can make to boost rental income or as an empty unit for them to occupy and offset their own living expenses.

Do I need a broker to sell a multi-family?

Of course, we’re biased...but we do recommend working with a broker who is experienced in the multi-family market in your neighborhood. Not only will they be able to pull good comps and provide a market analysis of how you should price the property, but an experienced agent will know how to show the proeprty to different types of buyers, whether they are experienced investors or first-time multi-family buyers who want some supplemental income. Brokers who work in multi-family markets are also in the know about rent prices and trends, which will help them sell your home at the right price.

Do I need to make repairs before selling?

Some buyers look for multi-families with units that could benefit from some updating because they see it as an opportunity to raise the rent using some sweat equity. Your agent should be knowledgeable of the renter’s and buyer’s market for your area and property type and will have good recommendations of what types of updates to make before selling.

Making simple upgrades around the property and in common areas like hallways and entryways can be an easy way to boost the property’s curb appeal that won’t break the bank, whether it’s through new fixtures or a fresh coat of paint.

How do I list a multi-family?

One of the most important parts of getting ready to list your property is confirming the number of legal units in the building. In a city full of old homes like Chicago, many apartment units have been created in old basement spaces or have been de-converted into larger single unit. If you sell your property with an incorrect number of legally recognized units, you could face legal issues down the road. To get the most accurate picture of how your property should be valued and listed, get in touch with the local village to confirm the number of legal units listed in their records.

How should I price my multi-family?

Buyers and their lenders will typically appraise a multi-family home using the income approach method instead of simply using comps in the area to compare values. This means that the appraiser will look at the cost of property maintenance and rental income to evaluate a property’s cash flow. To price your multi-family, you should do appraise a building’s income and use comps in the area to accurately represent what someone might want to pay for it.

How should I market my multi-family?

• You’ll want professional photos of each unit to get ready to list your property, which means asking your tenants to clean their spaces and set up a time for the photographer. Having an empty unit comes in handy because it gives you the opportunity to deep clean the space and potentially even stage it with furniture to show off its potential.
• Put together a financial breakdown and lease abstract to show possible buyers. This might include details like current rents, cost of utilities, and other maintenance fees to give them a better idea of potential rental income.

Selling a building with tenants.

How do I sell my multi-family with occupied units?

One of the trickiest parts of selling a multi-family is to make sure that you are aware of your tenants’ legal rights and that you make the selling process as effortless for them as possible.

• Breaking the news to tenants: Announcing that you’re listing your property for sale isn’t the easiest conversation to have with tenants. For them, it means the hassle of cleaning their apartments for multiple showings, a change in landlords, and a potential increase in their rent after the sale. However, you are legally obligated to inform your tenants when you sell the property, so it’s important to have that conversation before getting too far into the selling process.
• Tenant’s rights when a property is listed for sale: To protect yourself from liability and provide a smooth transition for your tenants during the sale process, it’s important to be aware of their rights determined both by the state and by their lease agreement. Your tenants most likely have a right to be notified a set amount of time before showings and have a lease that can’t be terminated just because you want a vacant unit to sell the property. Reread your lease agreements and the tenant’s rights for your city before listing your home or schedule showings.

How do I show a property with occupied units?

An experienced Broker will know the ins and outs of how to show a property with occupied units (which is one of the biggest reasons why you should take your time to find a good agent). The most important concern when it comes to showing units is to make sure that the tenant is aware of the appointment sufficiently ahead of time. Check your lease agreement to see if there are already guidelines in place, or contact your tenant prior to listing the process to come to an agreed-upon amount of days or hours before the showing when they should be contacted.

Have you thought of selling your property and would like to know what it's worth? Request a valuation for your property below:

Request Valuation

 

Source: Selling an Apartment Building FAQ’s

[/ux_text] https://www.creconsult.net/market-trends/selling-an-apartment-building-faqs/

Mason Square

Fully Equipped Car Wash For Sale
1250 Douglas Rd. | Oswego, IL | 3,750 SF | 6 Bays | 1.19 Acres
Mason Square Car Wash, a fully equipped and operational 6-bay carwash in southwest suburban Chicago’s Oswego, IL. Ideally located on an out-lot of the Mason Square Shopping Center along heavily trafficked Route 34, averaging 45,000 vehicles per day,
Listing Agent: Randolph Taylor 630.474.6441 | rtaylor@creconsult.net
https://www.creconsult.net/fully-equipped-car-wash-oswego-il-route-34/