By Stephanie Choporis
Cook County residents can expect little change to median rent prices of all properties due to inflation and potential leveling off despite a recent dip in costs, according to experts.
Among the 50 largest metro areas in the U.S., Zillow’s senior economist, Skylar Olsen, said Cook County, also referred to as metro Chicago, fell from 14th highest median rents of all properties in 2012 to 15th highest in 2015. But Olsen said the decrease does little to offset years of inflation.
“Since the housing value collapse, rental demand has grown, whether from homeowners who lost their homes to foreclosures or the large generation of millennials forming their own households as renters,” Olsen said in an email. “Supply in many areas has not been able to keep up.”
Data obtained from Zillow indicated that Cook County’s median rents peaked last September at $1,645 per month, which was more than $300 above the national median at the time. By December, the county’s median prices dropped $22 while national amounts continued to rise.
Olsen attributed the falling rents to a supply-demand balance. In a subsequent phone interview, she said construction is on the rise in the Chicago area, and rents could begin dropping where development is prevalent. She said median rents have decreased most in the Loop, South Loop, Park West and Cabrini-Green areas.
Philip Nyden, who is the director for urban research and learning and a sociology professor at Loyola University Chicago, said the Loop’s rent reduction could partly be aftermath of the housing collapse.
In terms of percentages, he said the area has been the nation’s fastest-growing residential area over several years, despite a lack of buyers after 2008.
Nina Questal, director of sales for an apartment-listing website, Domu, said 3,000 new downtown units are slated for this year, which could trigger “downward pressure” in other neighborhoods.
“However, with city-wide occupancy rates at all-time highs and millennials still wary of the condo market, it is difficult to predict future rents,” Questal said in an email.
As for median rents, Nyden said he thinks the trend will level off.
“I doubt it will continue,” he said.
If the decline persists, Nyden said owners of higher-rent housing, such as condos, could be negatively affected if the unit’s value decreases along with rent.
But Olsen said 18 to 34-year-olds could most likely be impacted as they are “combating” student loan debt and saving for down payments on homes. She said groups who have limited savings and fewer opportunities to become homeowners, such as minorities, could also benefit.
