Chicago apartment vacancies down for 13th consecutive quarter

Marcus & Millichap has just published its Third Quarter 2012 Apartment Research Market Report (PDF, Registration required).

Here are some of the highlights for the City of Chicago:

More projects are under way, but few have yet to come online. In the past 12 months, 166 market-rate rentals were delivered in the city. The total includes 48 units during the first two quarters this year.

An additional 4,600 units are under construction in the city, including more than 800 units slated for delivery in the second half of 2012. Planned market rate projects total nearly 15,000 units, representing a potential 9 percent increase in inventory if all the properties advance to completion. About 2,900 rentals are planned in the City West submarket, but high-demand Lincoln Park has fewer than 300 apartments under consideration.

Outlook: In 2012, developers will complete 900 market-rate rentals in the city, expanding inventory 0.5 percent. Only 118 units were completed in 2011, but 6,000 units were brought online in the preceding three years.

Vacancy fell for the 13th consecutive quarter, falling 30 basis points to 4.4 percent in the April-to-June period. In the first half, vacancy receded 40 basis points, slowing from a plunge of 70 basis points in the preceding six months.

Asking rents advanced 1.0 percent in the first two quarters to $1,202 per month following a 0.8 percent increase in the preceding half year. Concessions eased on a 1.5 percent rise in effective rents in the first half to $1,123 per month. A 0.9 percent rise was tracked in the prior half year.

Outlook: Vacancy will decline 50 basis points to 4.3 percent this year, after a drop of 120 basis points in 2011. Asking rents will rise 2.9 percent, accompanied by a 4.0 percent jump in effective rents.

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