The 2012 Real Estate Forum and the Future of Chicago's Rental ...

John Michael Grafft is a broker with Prudential Rubloff and the director of leasing services at Rubloff Rentals.

By John Michael Grafft

The 2012 Real Estate Forum, which?brings in the ?Who?s Who? of local real estate,?was one of the better events I attended this year. I was told attendance was approximately 64 percent higher this year with attendance reaching 850.

Hearing the perspective of all of the panelists on the current market and where it?s heading was the most beneficial takeaway from the evening. There were many different segments of the market represented and they all shed light on the nuances of their industry.

2012 Real Estate Forum and Chicago?s Rental Markets

After conversations with many in the room that evening, the real question on everyone?s mind seemed to be how high can rents go before people decide it?s time to buy, and how much can rents climb to actual take home pay before people decide to move to another neighborhood or move back home with their parents.

Many panelists addressed this issue, but few seemed concerned about it, at least until 2014, when a massive supply of units will hit Chicago?s prime areas with $3.00/foot rents.

Even though a rent vs buy analysis in Chicago?s desirable neighborhoods will likely push you towards a purchase, the psychological barriers toward purchasing has only begun to be reached. Many eco-boomers and others fueling the current rental demand are uncertain on the next five years of their lives, especially as we get more tech jobs here in Chicago which can be performed virtually anywhere in the world.

That uncertainty, along with the visuals of families losing their homes, has yet to fade from memory; so, when accompanied by rental buildings with great locations and amenities far outpacing those of any condo building, the flexibility of renting outweighs the pricing for a large number of individuals.

There is no doubt that the purchase market is picking up in desirable areas throughout Chicagoland, but I think the heavy presence of renters will stay consistent for a long time to come. At the end of the day you may be paying a premium for flexibility, amenities, and location, but until condo buildings begin providing amenities that can compete with those of apartment buildings geared toward today?s consumer, many that would consider buying don?t even have a product they feel strongly about.

Few will consider putting 20 percent down and rooting themselves when they can rent the best product in town for a little more?monthly,?nothing upfront, and no long term risk.

Source: http://chicagoagentmagazine.com/the-2012-real-estate-forum-and-the-future-of-chicagos-rental-market/

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