Chicago Q4 Market Insights: Conditions strengthening, particularly in Class B and C

Highlights:

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• Chicago multifamily property fundamentals recorded a solid performance during the fourth quarter, as asking rents continued to rise, and vacancy conditions remained tight. With the recent expansion in the construction pipeline, the pace of apartment deliveries is expected to gain momentum in 2023.
• Vacancy ended 2022 at 4.7 percent, the lowest figure in more than five years. The rate tightened 60 basis points for the year.
• With vacancy rates improving in the past two years, the market has recorded rapid rent growth. In 2022, asking rents rose 8.7 percent to $1,836 per month.
• Multifamily sales activity slowed during the fourth quarter while prices trended higher. The median sales price in 2022 was $168,300 per unit, up 21 percent from the 2021 figure. Cap rates ticked up above 5 percent at the end of the year.

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