It's all over for Chicago. Again.
Something very strange happens in Chicago on October 2nd every year. Not the end of the baseball season. Not the return of Oktoberfest beers. Not the announcement of the Oscar host. It's the end of the rental season, and it's arrival is both sudden and predictable. Don't believe me? Check out the Google Insights for people searching for "apartments" and "rentals" over the past 8 years.
Now check out the seasonal rental activity for a few select Chicago neighborhoods in the MLS going back to 2007, when rental listings were first added to the system:
Neighborhoods: Lincoln Park, Portage Park, Hyde Park and West Town chosen to show consistency across city neighborhoods. Click to enlarge.
You see those annual dips towards the end of the year? That's what I'm talking about. The most very basic law of economics - supply & demand - has caused the Chicago rental market to evolve into a very unbalanced annual cycle. This is not a chicken/egg paradox - lower demand definitely leads to lower supply and not the other way around. Personally I would think that this is due to many leases starting on the first of the month. Let's look at what happens on the first of the month in Chicago after October 1:
Harper's Index has always been one of my favorite sources for trivia. I've nicked their format once before and it was a blast. Since Friday is the day when I count things for you it's time I return to that format for a smattering of curious figures.
Number of true search results in Amazon's library for:
- "How to be a good landlord": 91
- "How to be a good homeowner": 100
- "How to be a good tenant": 0
- "How to be a good manager": 2,535
Source: Amazon.com as of June 10, 2012
Number of Google search results for:
- "I hate my tenants": 47,500
- "I love my tenants": 118,000
- "I hate my landlord": 985,000
- "I love my landlord": 3,480,000
- "I hate my job": 6,130,000
- "I love my job": 29,600,000
Source: Google.com as of June 10, 2012
Number of new Chicago Craigslist postings in an hour for:
- Apartments for rent: 950
- Jobs - all categories: 26 (note: Craigslist charges to post job ads in Chicago)
- Computers for sale: 15
- Missed connections: 6
Source: chicago.craigslist.org between 6:25pm and 7:25pm on June 10, 2012
Average student loan debt for 2010 grads:
- Illinois state average for 4-year college graduates in 2010: $23,885
- School of the Art Institute of Chicago: $39,306
- University of Chicago $22,359
- NEIU: $10,976
Other things you could buy for $23,885:
- 3/4 of a year's rent in a luxury 2 bedroom Chicago West side Loft condo (Source: ConnectMLS)
- A 2012 Ford Mustang. (Source: )
- 28.8 Top end Ipads with Cell service. (Source: apple.com)
- 31.4% of one year of an average Chicago public school teacher's salary (Source: )
- 55.4% of one year of an average rookie Chicago cop's salary (Source: )
- 871 shares of Facebook stock today.
- 42 shares of Google stock today.
- 19% of a single share of Berkshire Hathaway stock today.
Stock sources: Google Finance
Average list price per square foot per month for:
- Lakeview 2 bedroom rental (assuming 700 sq ft per 2 bed): $3.27
- Lakeview 2 bedroom condo purchase distributed over 30 years: $1.30
- Lakeview storefront rental up to 700 sq ft: $1.83
US National Interest rate averages as of mid-June 2012:
- 36 month new car loan 3.44%
- Standard 30 yr Fixed Mortgage: 4.21%
- Stafford student loan: 6.8%
- PLUS student loan: 8.5%
- Average Business credit card w/o "rewards" APR: 13.13%
- Average "Student" credit card APR: 13.16%
- Target Credit Card: 25.24%
- Chicago payday loan, repaid in 2 weeks: 405%
Sources: (Bankrate.com, , , )
Base Rent rates for interesting commercial spaces:
- 7500 sq ft of storefront space on Division in Wicker Park: $23750/mo
- 8000 sq ft next to Circuit Nightclub on North Halsted: $13000/mo
- 2400 sq ft former 7-11 with parking lot in Lincoln Square: $4800/mo
- 6250 sq ft dog care facility w. equipment on Western in Roscoe Village: $3500/mo
- 5000 sq ft church in Austin for Sunday afternoons and one weeknight: $1500/mo
I think this might be my favorite chart ever.
This is the Google Insights graph comparing the use of the search term "apartments" vs the search term "real estate" in the Chicago Metro area over the past two years. While it will update over time, what I want you to look at is the divider between 2010 and 2011. Do you see what happened? Apartments completely overtook real estate and never looked back. (If you're reading the archives in 2013 or later and you can't see that date anymore, drop me a comment and I'll update the chart.
Do I need to explain further? I think not, but let me know in the comments if you don't get it.