Are We Moving a Toward Rent Bubble?

As if you needed another indicator that now is the best time to buy Chicago real estate, the latest statistics show that home ownership is down, and rental demand is skyrocketing.  Apartment vacancy rates are the lowest they have been since 2006 at 5.6% and rents rose 2.3% over last year.  That certainly exceeds housing price increases in most areas, and seems to forebode a possible “rent bubble”.  Home ownership is down almost 1% since last year, and each 1% translates into one million new rental households.  So with demand increasing, and supply staying stagnant (few new multi-family building starts), rents are obviously rising.  If unemployment figures stay constant, and the weak economy continues. Rising rents will reach critical mass.  
 
The recent increases in apartment building values moved into record territory for the third quarter and rivaled the previous record set second quarter 2007, which was, at least in Chicago, just after the market peaked.  So the lesson in all of this is buy today!  Interest rates continue to be at record lows, Chicago real estate prices have started to increase and if you can qualify, now is the time to buy.  Multi-family properties good bets for both income and appreciation.

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