Just how long will downtown Chicago’s red hot apartment market last? It’s a question many of us continue to wonder, and one that we may have an answer to sooner rather than later.
Although demand for apartments is still strong thanks to downtown’s strong job growth in recent years, another increase in new construction apartment deliveries could result in oversupply in 2019 and beyond.
According to figures recently revealed in Crain’s Chicago Business, 4,400 new apartments are expected to wrap-up construction next year, and another 4,000 new units will also be finished in 2020 as well.
The good news, at least for now, is that with fewer apartments being built in 2018, there was at least some supply relief over the past 12 months, and the Class A apartment building occupancy rate even reached 93.7 percent this year, which is up from 92.0 percent in 2017.
But despite what many are saying was a vert strong year for the leasing market in 2018, the risk of oversupply is still very much a concern for downtown landlords moving forward, especially in neighborhoods like the South Loop where competition will only get stronger as more projects come online.