Airbnb Market Data in Chicago

On an annual basis, Chicago has approximately 7,400 active listings on a monthly basis, depending on the season. During the first quarter of the year, the number of active rentals hovers between 5,500 and 6,000. The festive season sees a mild increase in active listings in order to handle holiday demand, but this quicker tapers off and the number decreases in January and February. Usually, in Q2 (April, May, June), the number of active listings starts to rise and we see an increase to approximately between 6,000 and 6,750. Q3 (July, August, September) is what most would see as ‘peak season’. These months see the highest demand because they are during the summer season. In Q3, the number of active listings can reach as high as 8,000. In Q4 (October, November, and December), we see the number start to slowly decline once again as we head into the midst of the off-peak season. There are a few reasons why the Market Supply figures vary so much during the year. Some Airbnb hosts opt to rent out their own homes during busier periods to make more money, and these properties are then taken off the market once the demand dies down. Some hosts prefer a hybrid rental strategy of short-term rentals in summer and one longer rental in autumn and winter. There are also hosts that elect to take their properties offline to make cosmetic adjustments or a property refresh. Of course, there are also hosts to do seasonal renovations, and these properties will have to be taken offline while the renovations are underway.

In Chicago, 40% of rental listings are one-bedroom properties. 28% of properties have two bedrooms and 15% have three bedrooms. Properties with over five bedrooms represent just 2% of the overall rental market. With a 40% majority of one-bedroom properties in Chicago, the city sees a large number of business travelers, which makes the Central Business District (CBD) the most populous area for one-bedroom listings. We’ve seen the business traveler sector grow since early 2021 as hybrid workers are expected to visit their offices of employment from time to time. This section of the market is always a safe bet for property investment. Tailor your inner-city property to suit business travelers, and you’ll have no problem securing bookings. In the CBD, the most popular areas are Chicago Loop, New Eastside, Magnificent Mile, Near North Side, River North, Near South Side, Grant Park, and Millenium Park. Most of the properties are West of the railway line, which means transport links are very strong for these properties. Include little details like lightning-speed internet, a high-quality coffee machine, and a range of take-out menus to give your guests the easiest and most enjoyable experience at your property. The more your guests feel comfortable, the better their reviews will be, and the more return guests you’ll get. Airbnb rewards hosts that attract repeat bookings – remember that! For investors looking to buy bigger properties, the areas of Chicago where we see the highest concentrations of bigger properties are Wicker Park, East Village, Bucktown, Logan Square, and Palmer Square. These properties are best suited for Airbnb bookings of 5+ people. The benefit of bigger properties is that you can charge higher prices, but they are also more expensive to insure, maintain, and clean.

The occupancy rate, on average per year, sits around 60%. This figure can go as high as 85% in peak season. In the run-up to the festive period (between mid-November and mid-December), occupancy traditionally drops to around 30-35%. As in most areas, the occupancy rates are cyclical. Chicago is no exception. In June, the occupancy can climb to as high as 85%, as it’s summer and the high season for vacation rental hosts. As in most cities, Chicago has a majority of ‘whole home’ rentals, rather than just a room in someone’s house. This contributes to occupancy rates more than you might think. Occupancy rates fluctuate throughout the year as visitor numbers climb and fall with the season. If you think logistically, running a vacation rental room in your own house is easier from a management perspective. However, the fact that 80%+ of the properties in Chicago are ‘whole home’ properties speaks to what the visitors to this area are looking for. If you work full-time and are looking to invest in a vacation property with the hopes it will run itself, there are specialized products and services that you can enlist to run everything from cleaning crews to guest communication and invoicing.

It’s not the simplest of tasks to find an average house price, because it really depends on the particulars of the house, for example, the number of bedrooms, location, additional amenities, and so on. Instead, we’re looking at the median house price in Chicago over the past 12 months. A median is simply the middle value in an ascending or descending line-up of numbers. The median house price value in Chicago is $328,000. As values, medians are useful but also limited. This is not an average figure and it does not lend any explanation to the particulars of the properties in question. This is only a 0.1% increase in median value compared to the same time last year. Median house prices usually peak in between April and July, and we’re seeing an annual median of 55 days on the market before properties get sold. As the property market was booming in 2021 as a result of the pandemic, the 2022 annual median figures are slightly higher than last year. As it took slightly longer in 2022 to sell a house than it did in 2021, we’re expecting a similar trend in 2023. House prices generally in North America have been on the rise since the pandemic and investors across the country are once again choosing a property.

The Average Daily rate in Chicago hovers around $200 per night. This varies with the season. Across the 12 months of the year, the Average Daily Rate (ADR) stays between $160 and $250. Generally speaking, the ADR is a good indicator of market health. Areas with low ADRs are either not particularly popular, are out of season, or may not have the listing types or infrastructure that visitors to the area are looking for. In iconic markets like New York City or Los Angeles, the ADR figures can skyrocket to over $500. These figures depend heavily on the season, market popularity, target guest, target guest income bracket, and type of property. In the majority of places, ADRs have recovered from the long-lasting effects of the pandemic, and we are once again seeing an influx of bookings. The pandemic also had another unique effect on pricing because as workforces moved to remote or hybrid work, employees were free to work from anywhere. This wasn’t just limited to office workers. Airbnb hosts started exploring automation services, self-check-in options, pricing services, and property managers. The rise of dynamic pricing in the industry has seen vacation rental hosts earn more than ever. Prices across the board are competitive and it makes for a very profitable investment opportunity.