December 29, 2008 - The biggest Chicago real estate stories that may unfold at least in the early months of 2009 may center on foreclosure suits and the rental market. With a number of Chicago condo developers facing looming loan deadlines and flat sales, the potential for lawsuits is a real possibility. By now everyone is aware of the dueling suits filed by Donald Trump and Deutsche Bank over the past due construction loan for the Trump Tower. And with our recent post about the possible collapse of the Anglo Irish Bank, the Spire’s troubles may be deeper than its foundation hole.

But a side effect of the condo crash is that more units are coming up for rent in luxury developments. There are a number of units currently for rent at Trump Tower, often at a lower rental price than similarly sized condos in other luxury buildings. Recent listings for one bedroom condos at Trump have come on the market for around $2,500 per month. And many developers are opting to rent unsold units themselves, rather than sit on inventory that isn’t generating any income at all.

According to a recent article in the Tribune, the Chicagoland Apartment Association expects 2009 rental rates in Chicago to remain steady and in some cases even decline a bit. In 2007, average rent for a top of the line one bedroom downtown apartment was $1,850 per month. That number had decreased to $1,750 per month by 2008, according to data from Appraisal Research Counselors. The addition of 1,974 new rental units drove that number down, and at least 954 more rental units will come on line in 2009. That doesn’t even figure in all of the condos that investors end up renting when they can’t sell, and that amounts to as much as 20% to 25% of all downtown condos.

The only exception to the steady rental price prediction is that prices for units in high-rises near the lake or in vintage buildings may tick up slightly. So if you think you may be priced out of buying one of the Downtown Chicago Condos, you may want to check into renting, even if the developer isn’t openly advertising that option.

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This entry was posted on Monday, December 29th, 2008 at 3:16 pm and is filed under Luxury Condos(t) . You can leave a response.