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May 2015 Market Update

These articles are pretty easy to write when things are really good, or really bad, or really volatile. But they’re a lot harder to write when not much is going on. And frankly, right now, not much is going on.
The Dow Jones has been cruising along in the 17,000 to 18,000 range for several months. Job growth has been steady, and briefly looked like it was starting to accelerate. But the March numbers seemed to return this trend to earth. The 126,000 new jobs figure for March was relatively disappointing after a string of job figures at or above 200,000. Countering this bad news was the announcement just a few days ago (April 30) that initial unemployment benefits claims for the previous week had fallen to a 15 year low – just 262,000 claims, a decline of 34,000 from the week before. Conclusion? The economy keeps improving, but it seems to be jogging, not racing, ahead. 
As always, anything could happen going forward. We’ve entered the beginning of the 2016 political season, with Hillary likely to face – well, who knows? There are a number of Republicans vying for the nomination, with more likely to jump on board in the coming months. From a practical perspective, this means Washington will probably remain stuck in the mud until after the November elections next year as both parties try to stymie the other, and neither is able to get anything meaningful accomplished. Outside of the US, there are plenty of hot-spots where events could push the economy forward or back. But none of this is news. 
Meanwhile, for all the economic improvement that has taken place since the last recession, there is still a lot of ground to recover. This is especially true in Chicago and the Midwest, both of which have underperformed since the recovery began.
But the recovery is different things in different places. Chicago is a big city, and not all areas of the city and suburbs are recovering at the same pace. The region seems strongest right now at its core; but Rogers Park, despite its distance from downtown, is still relatively well situated to take advantage of the spill-over from this growth. The community remains a destination of choice for downtown workers whose incomes cannot easily handle (or just don’t want to pay) the ever-increasing amount of rents being charged in and near downtown. Our Lakefront location and access to transportation remain strong lures, and give us a big advantage over other parts of the city or suburbs competing for the Millennials who continue to be drawn to Chicago and who seem to like city living a lot more than their parents did.
From our own experience with rental condos in Rogers Park, I can honestly say that we are constantly surprised by the amount of rent we are able to obtain while still keeping our units full – if not all the time, at least most of the time. OK, I’ll admit – this statement goes double for the areas we are also invested in that are closer to downtown. But Rogers Park is following this trend and performing well. Demand is strong and rents are going up. 
Other owners that I’ve spoken with all say the same thing. The spring leasing season has been good and no one seems to be having any difficulties filling units and getting their rents. Rogers Park remains a destination of choice – if not always first choice, at least a solid second or third. And it remains a bargain compared to any of the neighborhoods further south. 
Slow but steady job growth will gradually repair the deep damage done by the last recession. For now, at least, we seem to be on the right side of the downtown-centric recovery. So I guess a vanilla economy isn’t so bad. It sure beats what we’ve just recently been through.


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