Crib Chatter

The Sunday Real Estate section of the Chicago Tribune had an article titled, “Seers, soothsayers and educated guessers” about what might go on with the Chicago real estate market in 2008 (and beyond).  It had a few interesting tidbits about the Chicago condo market. 

1.  Younger people will be able to buy condos if they have the credit:

Market getting younger: Generation X and Gen Y are taking over the spot of first-time buyers, according to Kay Wirth, president of the Illinois Association of Realtors. (Baby Boomers are in the second-home market now — not to mention move-downs.)

“Younger buyers are seeing amazing opportunities,” Wirth says, adding that fears of being unable to get a mortgage are unfounded. “Money is to be had for those who qualify.”

There’s also hidden inventory in the condo market, Swonk points out. “Cancellations are pretty high in new condo developments,” she says. In addition, “a lot of supply has yet to hit the downtown condo market, which will hold down prices in that market until 2009.”

2. Rents will be picking up at 10% to 12% a year:

“The big story for 2008 is that rents are going up,” says Maurice Ortiz, marketing director for The Apartment People, an apartment-finding service with offices in Chicago and Evanston. “We haven’t seen rates like these since 2000.” Rents are going up as much as 10 to 12 percent in downtown areas, he explains.

“No one’s buying,” Ortiz says. “Everyone’s scared and going to wait a year or two.”

But it also sounds like the excess inventory in new condos will make it easier to get a rental deal on one of those units:

If a prospective tenant is in a position to pick up and leave in 60 days, a typical time for a sale to close, there are rental deals for condos that aren’t selling, adds Swonk.

Is anyone else seeing 10% to 12% rental increases? I know that the new luxury rental buildings in River North and Streeterville are renting very quickly- at high rental rates ($2,000 and up for one bedroom apartments.)