While single family residential permits have softened in the last year and we are hearing from from contractors that construction in Chicago is trending downward, there are still some bright spots.
"Multifamily buildings with two or more units had a better year than the single-family market. Permit activity increased from 690.5 units in January 2022 to 922.5 in January 2023, an almost 34% rise."
Part of the demand can be attributed to the rental market. Chicago has seen a decline in available properties by 1% YoY. Chicagoans are also paying more for rentals. Rental listing prices have increased 4.7% YoY and rents have been steadily increasing since 2021.
“Even as interest rates are expected to remain elevated, Baird & Warner has not seen a significant slowdown in buyer demand,” says Laura Ellis, chief strategy officer and president of residential sales at Baird & Warner. “Interest rates are pricing some people out of the market, but it’s not enough to prevent people who have the means to move." Ellis’ advice: "Date the rate; marry the house. You can always refinance."
Multi-residential construction has performed better than expected and most economists are confident that we are at the bottom in terms of growth in other segments. The only question left is for how long before we start to see improvement overall?
If you have questions about your multi-residential project or comments about the market, we would love to hear from you. Leave us a comment below or email us at news@ph1c.com
