In late November we started tracking the number of condo rentals in select Chicago ZIP codes in hopes of seeing…something. Every Friday, we record the number of homes listed for rent in 60601, 60602, 60603, 60604, 60605, 60606, 60607, 60608, 60610, 60611, 60616, 60622, 60654, and 60661, the 14 ZIPs that make up the Loop / Downtown area (which we recognize as stretching from the lake to Western Avenue, and from the Stevenson Expressway to North Avenue).
We were ready to take what the data gave us, but we did go in with an assumption — that 2010 would be “the year of the renter.” “Current market conditions have resulted in condos becoming an increasingly important factor in the rental market in downtown Chicago,” Joe wrote late last year, citing a then-recent report from Appraisal Research Counselors that noted a “dramatic” escalation in condos for rent in the downtown market during ’08 and ’09.
Instead of seeing inventory grow, however, we’ve watched it shrink over the past five months. As of today, there are 1,448 rentals listed on the MLS, a full 25 percent less than the weekend after Thanksgiving. This morning I asked Matt Garrison of Coldwell Banker, the Matt Garrison Group, and CondoShark.com what accounted for this plunge. He e-mailed the following a few minutes ago:
With condo volume up almost 50 percent year-over-year, the shadow rental inventory is starting to get burned off. And there are plenty of renters taking advantage of accidental landlords who are lowering rental prices to compelling values. When you combine these two factors, and the sales and rental market hitting seasonal peaks in the next few months, I expect the trend to continue. The new apartment buildings being built shouldn’t have too large of an effect, as they tend to be more expensive then renting one-off condos.
We’ll continue to check the rental inventory every Friday and record the numbers in our spreadsheet for all to see.