Chicago is one of the largest metro areas in the country and the only primary market in the Midwest. Is the Chicago property market a risky bet or a good deal? We took a look at some stats, and here’s what we found:
Population and job growth
First the bad news: Chicago was the only major U.S. city to lose population in 2016, and its population has been dropping for three years in a row, census data show. Reasons include a decline in the number of Mexican residents in the city while others move out of state and not enough people move in to compensate, the Chicago Tribune reported.
Job growth has been low, as well, an issue that could prompt Chicagoans to leave town and that could itself be exacerbated by a dwindling pool of workers.
Though Chicago-area employment has grown year-over-year each month since late 2010, its employment growth is below the national average, according to the U.S. Bureau of Labor Statistics. While U.S. employment increased 1.5% year-over-year in August, Chicago job growth was at 0.5% – the slowest growth rate of all 12 of the country’s largest metropolitan areas. At the same time, property taxes have been rising.
If population and job growth continue to slide, this could have a ripple effect on real estate, portending higher vacancy rates for multifamily and office as residents and employees move elsewhere, along with potentially lower sales for the retail sector.
Commercial real estate lending
CrediFi found that commercial real estate loan origination in Chicago declined 13% in the first six months of 2017, dropping to $11 billion year-over-year.
However, this isn’t unique to Chicago, with