In the mind of real estate investors, Chicago is a middling market.
That seems to be the bottom line from the annual “Emerging Trends in Real Estate” survey – which ranked Chicago’s real estate market 42nd among 78 U.S. urban areas – down from 19th last year. Seattle, Amazon’s hometown, topped the latest list, followed by Austin, Texas, and Salt Lake City.
This is a stark change, as estate investors and developers have made out well in Chicago the last several years by hiking rents and selling properties for big gains as prices have risen.
But yet more investors are turning to secondary real estate markets, like those of Salt Lake City and Raleigh/Durham (ranked no. 4), because properties in primary markets like Chicago have become so expensive, which in turn – drive down investment returns.
Manhattan, which ranked 13th last year, dropped to 46th in this year’s survey while San Francisco fell to 27th from 10th.
“The belief is that these (secondary) markets could be positioned for more upside growth, and this looks even more attractive when one removes the fear of a cyclical bust,” according to the report by the Urban Land Institute and PwC.