Why is rent so high? As the curtain fell on 2023, the cost of renting mid- to high-end apartments in the Chicago metro area saw an uptick, according to news outlets. This real estate firm evaluates properties based on their design, features, location, and various certifications, providing a comprehensive snapshot of the current market conditions.
Impact on Residents
For residents of Chicago, the increase in rent indicates that relief in housing costs might not be on the horizon anytime soon. Many who call the Windy City home may find themselves grappling with consistent or rising rental expenses throughout the year.
Driving Forces Behind Rent Prices
National directors who serve for CoStar’s multifamily analytics, shared with Axios that the demand for more budget-friendly living spaces is one of the key factors keeping average rent prices from declining. This persistent demand continues to prop up the cost of living in less expensive apartments, maintaining a steady market even as other segments fluctuate.
National Rent Trends
Across the United States, rent levels remain elevated when compared to the figures before the pandemic, according to industry analysts. This suggests a lasting shift in the rental landscape, with higher costs becoming a new norm for many Americans.
Influence of New Construction
However, there’s a silver lining for those seeking luxury accommodations. The recent surge in new construction, particularly at the higher end of the market, has introduced a dynamic where supply outstrips demand. This imbalance is leading to decreased rental prices in the luxury segment, offering opportunities for deals to those with more flexible budgets.
The New Developments
Much of the new housing being built is laden with attractive amenities and situated in prime locations. In Chicago, for instance, some of the latest high-rises feature exclusive amenities such as music and craft rooms, saunas, and indoor lap pools, enhancing the appeal of these properties.
Understanding Rent Prices
It’s important to note that the rent figures often discussed in media are generally “asking rents,” which apply primarily to new lease agreements. For those not planning to move, existing rental agreements typically do not see reductions, as highlighted by Axios’ Emily Peck. This means that current tenants are likely to continue paying their existing rent, unaffected by the fluctuations seen in the market for new leases.
