TOP 5 FACTORS LEADING TO THE GROWTH OF CHICAGO’S LUXURY REAL ESTATE MARKET
If you’re looking for a viable investment opportunity in the real estate market, then there’s no better place for you to invest your money than the city of Chicago. The real estate market in Chicago is growing at an exceptional rate and several factors have led to that growth. In this article, we’ll be taking a look at some of the factors that have led to the growth of Chicago’s luxury real estate market. But first, let’s take a look at some of the popular neighborhoods in Chicago luxury home buyers are gravitating to:
· Lincoln Park Area: This is one of Chicago’s wealthy neighborhood that just screams luxury. Popular places in the neighborhood included Chicago’s Museum of History and the Lincoln Park Zoo.
· River North: River north is one of the more vibrant neighborhoods in Chicago. It gained popularity thanks to the number of trendy shops and art galleries located there. You can find both economical and luxurious condos in River North. A common example of a luxurious condo in River North is The Trump Towers.
· Hyde Park Area: This area is known for being home to the University of Chicago. You can also find several top class restaurants as well as the Museum of Science and Industry in the Hyde Park Area.
· Chicago Loop Area: The Chicago Theater, Art Institute, and the Sears Tower are all located in the area.
Now that we’ve seen the most popular areas for luxury homes in Chicago, let’s take a look at the factors that added to the growth of the luxury real estate market in Chicago
1. Increased Employment
The increase in the number of employment opportunities has led to more and more people moving into the more luxurious neighborhoods in Chicago. This, in turn, spurred a development of luxury apartments and homes in the downtown neighborhoods. That way, more people can afford to rent or purchase one of these luxury homes.
2. Strong Value Gains
The increased demand for luxury homes in Chicago had the side effect of attracting a significant rise in rent prices. With rents going up by as much as 15.5% in the last few years, more and more investors were attracted to the industry seeing as there was profit to be made.
3. Low-Interest Rates
Chicago has some of the lowest mortgage interest rates you’ll ever find in the United States. These low rates generated a high demand for luxury properties. Sadly, financial institutions are starting to leverage the increasing demand for luxury properties and as a result, interest rates have been steadily increasing.
4. Market Reactions
During the 2016 elections, the local economy took a serious beating. Thanks to the uncertainty of the election, costs of raw materials and construction prices skyrocketed. Thankfully, the real estate industry was able to recover not long after the election. As the price of raw material and costs of construction went back to normal, the real estate industry started seeing a rapid growth.
5. Goodwill and Incentives from Local Authorities
State agencies and local authorities have also contributed to the rising development of luxury homes in Chicago. Real estate developers are currently enjoying tax breaks for several projects that meet certain requirements.