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7 Positive Market Trends for Single-Family Homes in ChicagoLand


A recent report by HomeUnion Research Services highlighted seven reasons why investors in single-family homes in greater Chicago metropolitan could cheer in the New Year.

According the report (see full study here) “Although the Windy City was late to the recovery, the current rental market is gaining momentum, driven by economic expansion across most employment sectors.”

The strong rental market in Chicago has bolstered occupancy and rents for investors.

Higher renter demand for single-family homes in Chicago has been primed by:

1. Expanded Payrolls

For 2016 “Employers are projected to expand payrolls by 1.4%, or by 65,000 jobs,” the report said. “Last year, 71,100 positions were created in the metro area.” Since its peak in 2012, ChicagoLand’s employment rate has remained fairly steady.

2. A Growing Economy

The local economy has also been on the upswing. A recent expansion in metro Chicago included a new $43 million building by the University of Chicago Medicine on the South Side, with a projected new employment base of 1,000 full-time people, in addition to approximately 400 construction jobs. Amazon has also begun building a 850,000 distribution facility in suburban Chicago.

3. Higher Home Sale Prices

Home sales prices have also been on the rise. According to HomeUnion, the median price for an investment home was $157,000, up 11% from the same period last year.

4. Lower Single-Family Home Vacancies

By the end of 2016, Home Union anticipates the total rental vacancy rate in metro Chicago will have declined by 30 basis points, from 5.80% to 5.50%.

5. Higher Rental Prices Also as of the end of 2016, HomeUnion projects that the average asking rent in greater Chicago will have increased to $1,590 per month, a gain of 4.9% from 2015.

6. Little Impact from Oversupply of Apartments In addition, single-family rentals (SFR) in and around Chicago are better positioned to “weather the influx of new apartment supply. Most SFR properties are in suburban neighborhoods, well away from the Class A apartments underway within the Loop.”

7. Cap Rate Spreads Trending Higher.

ChicagoLand’s cap rates have also remained strong, at approximately 6%. According to HomeUnion, “the spread between average cap rates and the 10-year Treasury has settled at 440 basis points,” said HomeUnion. Historically, wider spreads have signaled strong buy periods.”

For more information on why you should consider investing in a professionally managed portfolio of single-family homes, please contact Harold Willig at 917-209-4452 or harold.willig@springviewinvestments.com

Harold Willig is the Manager of SpringView Investment Management, LLC, which he founded in 2012. Mr. Willig also served as HFZ Capital Group’s Chief Financial Officer, and was responsible for the oversight of HFZ's Finance and Accounting team. He has over 16 years of finance and accounting experience. Mr. Willig also ran a consulting practice and provided valuation, analysis, and transactional support services to multi-billion dollar real estate companies. Previously, Mr. Willig served as the Senior Controller and Vice President of Financial Analysis and then the Chief Financial Officer of the Athena Group, a multifamily development company and fund manager.

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