Chicago-Naperville, IL - Investors Metro Analysis

Specifically designed for investors in rental property, the Metro Analysis is a strategic summary that tells you what the local economic data mean for your investment, and why. If you’re planning an investment or if you’ve already made one, the publisher's unique analysis advises what types of investments are favored by the local economic conditions and warns you when the risk of an investment is higher. For each of these local markets, the publisher provides ratings of expected returns and risks, key forecasts, clear explanations of our analysis, and important stats, including rent data and analysis for local zip codes that help you zero in on your investment.

Report Includes:

Ratings

• Expected Returns: The rating of Low, Medium or High for cash-on-cash and equity returns is based on a forecast of rents and home prices.
• Risk: The main risks to investors are that home prices will fall (especially after a bubble) and that rents will be weak (usually because of a local recession). The rating of Low, Medium or High is a combination of these two.

Discussion

• Options: The types of investments favored in the current economic conditions.
• Economy: The local economy, especially jobs, population growth, home prices and total local income, all of which affect current and future demand for housing. The local economy is the driver of demand for housing.
• Risk: Guidance for the current risk situation.

Three Essential Charts

• Home Prices: How quickly home prices have been rising - and therefore the strength of demand for single-family homes and rentals. Trends usually continue.
• Jobs: The rate at which jobs have been increasing - and therefore the strength of future demand for housing. Under 1 percent is poor, over 2 percent is good.
• Income Price: The comparison of home prices to the ‘income’ price, related to local income. When prices are well above the ‘income’ price, a market is over-priced and could be in a dangerous bubble. When prices remain well below the ‘income’ price, the market is weak.
• Stats: Average home price and rent, our 3-year forecast for each, and the ratio of home price to annual rent; when the ratio is above 20, investors are better off sub-dividing a property.
• Positives & Negatives: Good and bad points in plain language.

County Comparison (for some markets)

• Current home prices and rents, the 3-year forecast for each, and the ratio of prices to annual rents. The 3-year total income growth is a measure of upward pressure on home prices.

COVID Analysis

• Special analysis that shows the vulnerability of the local economy to COVID-related job losses. Charts show the Pre-COVID job structure of the local economy and actual job losses or gains in the most recent month.

Rent Data for Local Zip Codes

• Because most renters move within two years, investors must know the range of rents where they will find the highest concentration of renters, so they can most easily fill a vacancy. Other local zip code data include population, percent of renters, average rent, our 3-year forecast of rents, actual home price increases in the last two years, and our home price forecast for the current year.