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“Elevated Pricing” May Bring More Multifamily to Market
By nearly all measures, the Chicago region’s multifamily fundamentals have shown healthy year-over-year gains, Marcus & Millichap reported. Vacancies declined by 20 basis points year-over-year, as newly-built units were absorbed, and rents were up 4.2% during the same period.
In some submarkets, the gains were even stronger. Central Cook County saw a 7.2% Y-O-Y increase in rents, and a 110-bp drop in vacancies.
Even so, year-to-date sales volume was down slightly Y-O-Y. However, Marcus & Millichap cited investor concerns last fall over tax reform, as well as limited listings.
“Moving forward, some owners may place their properties on the market to capitalize on elevated pricing,” according to Marcus & Millichap’s fourth-quarter report on Chicago multifamily. “The average price per unit is roughly 45% higher than the previous cyclical peak.”
Helping drive demand is the 65% propensity of young Chicago-area professionals to rent, says Marcus & Millichap.
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