Just a bit over a year ago, before the pandemic outbreak, there was a deluge of humanity rushing to Chicago's downtown. They craved to live in one of the luxury towers in the heart of the city. All of these people wanted a dwelling close to their jobs, fantastic restaurants, high-end shops, and great entertainment options. They yearned to be at the very epicenter of all the happenings in Chicago. However, the demand for these apartments has declined over the last year. And it's not only in Chicago. Urban, downtown areas have lost their popularity due to the Covid-19 pandemic. So, what is happening to the Chicago apartment market? Is it coming back, and when?
An article in Crain's Chicago Business states that the speed and scope of the downtown market's recovery will depend largely on how quickly the city's office towers fill back up and how many workers will return. More people working in offices means more people will be looking for apartments in the city again. Landlords are counting on this happening.
Everybody says that the pandemic made city renters move to suburban areas. What happened is that the pandemic closed hundreds of shops, bars, restaurants, cinemas, theatres, etc. Essentially, it stopped urban living. Simultaneously, many companies have introduced remote working models, so everyone that could work from home did so. And most still do. For this reason, the pandemic has already started to influence office and other mixed-use construction designs according to a recent Databid blog titled "How the Pandemic will influence Office/Hotel/Mixed-use construction designs."
All of that significantly reduced the number of people working downtown. Still, the pandemic cannot last forever, and the question arises - what can we expect on the Chicago apartment market scene in the near future?
LoopNorth News reports that real estate agents still are reporting high demand for rental apartments in walk-up buildings that feature outdoor spaces. Old Town, Lakeview, Edgewater, Lincoln Park, and Rogers Park are especially sought-after neighborhoods due to their proximity to the lake.
At the same time, younger people are renting units in suburban areas and moving to places with a lot of open spaces where they can cut their rental expenses considerably and practice social distancing and quarantining in a more comfortable manner - something that US Moving Experts Chicago can confirm.
Urbanize Chicago stated that the downtown Chicago's luxury apartment market is another story and is in the midst of a dramatic comeback from its pandemic lows.
Properties such as the 698 unit Wolf Point East tower along the Chicago River, saw rent prices decline as much as 30 percent from their pre-COVID highs in 2019 to later 2020 according to Aaron Galvin, CEO and co-founder of Luxury Living Chicago Realty.
Gaven stated that they are seeing rents that have made up 90 percent from the pandemic lows and they expect that number to trend even higher into the second quarter.
With vaccinations on the rise and the end of the pandemic on the horizon, many companies are getting ready to reopen their downtown offices in the coming months. The flow of workers into downtown could help apartment owners fill their buildings.
Out-of-towners are slowly trickling in now but leasing has picked up in the past few months, partly because downtown landlords have been offering such great deals to attract renters to their buildings.
According to The National Apartment Association, as many as ten million apartment renters have failed to keep up with their rent payments. However, the good news is that help is on the way, and it comes in the form of the $1.9 trillion American Rescue Plan. The plan will involve an array of measures aimed at helping both renters and landlords. Out of the total sum, $27.4 billion is dedicated to rental housing assistance. Additionally, $300 per week will go to unemployment assistance until September 6, 2021. And there is a payment to residents who earn less than $75,000 and couples who make less than $150,000.
With the appearance of the vaccine, things will start getting back to normal, especially in the downtown areas of Chicago. People will start returning to offices and start filling the vacancies in apartment buildings again. This area will continue to reign as an economic power. If there is one thing we can rely on, it's that this city is a tough cookie. It's resilience enabled it to reinvent itself after the Great Chicago Fire of 1871 and it will undoubtedly recover from the Covid-19 Pandemic.
