Chicago Rental Market 2023 (leasing, mortgage, credit)

[Kmanshouse]

We are exploring upgrading. We are prepared to pay more for rent and get more.

Right now, we are underpaying - I'd think our landlord could get 25% more if we left and he re-leased it.

The issue is that with mortgage rates being high, the selling/buying market is drying up. We've now seen several rentals come up where the owners tried to sell first, then pulled it and are now renting it out. We are looking at a place this weekend that tried selling in Dec/Jan, then put it on the rental market, then canceled, then tried selling again, failed again, then put it BACK on the rental market just now for $500 more per month than they did in January.

This tells me that people are jacking up asking prices for rent, because they realize that buying is a tougher thing to do right now with rates so high.

We are seeing 10% increases in price-for-what-you-get just in the last couple of months.

Anyone else close to this situation that has more insight? We're beginning to think we might have to stay put.

[OyCrumbler]

This makes it sound like you have a fairly good deal on your place, so I wonder if perhaps it's better to try to save up to buy instead if rentals are going up and demand for purchases is going down.

[Kmanshouse]

For a bunch of reasons we aren't interested in buying. I'd like to focus on the rental market.

[quigboto]

Originally Posted by Kmanshouse

We are exploring upgrading. We are prepared to pay more for rent and get more.

Right now, we are underpaying - I'd think our landlord could get 25% more if we left and he re-leased it.

The issue is that with mortgage rates being high, the selling/buying market is drying up. We've now seen several rentals come up where the owners tried to sell first, then pulled it and are now renting it out. We are looking at a place this weekend that tried selling in Dec/Jan, then put it on the rental market, then canceled, then tried selling again, failed again, then put it BACK on the rental market just now for $500 more per month than they did in January.

This tells me that people are jacking up asking prices for rent, because they realize that buying is a tougher thing to do right now with rates so high.

We are seeing 10% increases in price-for-what-you-get just in the last couple of months.

Anyone else close to this situation that has more insight? We're beginning to think we might have to stay put.

Last time my Girlfriend's lease was up they jacked her rent up by $700/mo (Say whaaaaaat?)
This time they're bumping it $150.
That is in Printer's Row, BTW.
I think thats crazy, but apparently that's the current marketplace.
Staying put might be your best option.

[Kmanshouse]

Originally Posted by quigboto

Last time my Girlfriend's lease was up they jacked her rent up by $700/mo (Say whaaaaaat?)
This time they're bumping it $150.
That is in Printer's Row, BTW.
I think thats crazy, but apparently that's the current marketplace.
Staying put might be your best option.

Thanks. It might be.

Guessing our rent will go up here in June, but even then, it will still be under market. We have a situation here where it's just a guy that owns a house - he didn't even check our credit, and does all the work himself.

But there are certain things about it that we've grown tired of, old bathrooms, bad refrigerator, no sink disposal. We've lived with it due to the bargain and how much space we have for the money (and it's in a great location).

We're itching for a "nicer" place but it might be very hard to find.

[OyCrumbler]

Originally Posted by Kmanshouse

Thanks. It might be.

Guessing our rent will go up here in June, but even then, it will still be under market. We have a situation here where it's just a guy that owns a house - he didn't even check our credit, and does all the work himself.

But there are certain things about it that we've grown tired of, old bathrooms, bad refrigerator, no sink disposal. We've lived with it due to the bargain and how much space we have for the money (and it's in a great location).

We're itching for a "nicer" place but it might be very hard to find.

How much of a deal is it? Is it pay for or split with your landlord fixing up the bahtroom and get a new refrigerator level of a good deal?

[Hiruko]

"Rents in the Windy City increased by 20.8 percent year-over-year in November, while rents nationally continued a monthslong trajectory of single-digit growth with a rate of 3.4 percent."

TheRealDeal: Chicago rent growth outpacing nation as market cools

My cousin is a broker with a big leasing business and he told me that residential rents are up by 25-35% in most neighborhoods in the city. Inventory is very low and renewals are high. I realize that article contradicts the latter (it was written in January), but if you look at rental listing activity, it is down from same time last year.

If you are looking to get a deal on a rental, I don't think that this is a good time to be looking.

[Kmanshouse]

Very helpful, thanks Hiruko.

We aren't looking for a deal....just a nicer place. The spike in rents seems very recent. Not great timing and it might price us out. We have a long list of asks and need to stay under $5K. Stuff that used to be $4400 is now $5,000+ just in the last 2-3 months.

And no, buying is not an option.

[quigboto]

It doesn't help that a lot of homeowners/landlords (including me) saw significant increases to their property taxes this year.

ETA: Dang I worded that poorly, because to clarify, I am a homeowner but not a landlord. However my brain is mush after a crappy workday and I couldn't figure out how to re-word it properly to convey this.

[ChiGuy2.5]

Rental prices are directly related to the costs associated with owning a home. Some things have drastically increased rental prices in the past few years.

1) Interest rates
2) Property Taxes
3) Inflation (especially in home prices)

It may not be obvious to some that many landlords DO carry a mortgage. There are many more small time landlords than there are big corporations controlling rents. It sounds to me like you're getting a great deal on rent because your landlord got a good deal on their unit. They are passing some of the savings onto you.

As such, I would definitely consider keeping put because any fresh listings hitting the market these days is going to take the 3 things above into account.

Think about it like this, if someone was just recently entering the landlord game, they likely still have a mortgage. They are going to request a rent rate that covers their mortgage plus interest both of which were higher than usual within the past year. They are also going to have to pay taxes on it which have gone up. No way can "new" landlords afford to give good deals in rent.