Chicago Multifamily Market
Demand Returns to Central Areas;
Suburban Market Maintains Strength
Absorption in urban locales accelerates. Due to space constraints in the urban core, new supply has and will continue to be limited in the core this year. This has produced historically tight conditions in many central neighborhoods, as construction in the core has been unable to match renter demand. Data shows a 450-basis-point annual drop in vacancy within Chicago proper at the end of March. Competition for units here is likely to result in sharp rent climbs this year, especially in locales like Lincoln Park, Ukrainian Village and Andersonville. Also, the return to in-person work downtown supported near nation-leading annual vacancy contraction in The Loop and West Loop areas entering the second quarter. This tightness may spur more development in central locales in future years.