Chicago's multifamily sector has seen significant demand this year, with $1 billion worth of properties trading, Marcus & Millichap’s senior associate David Gaines recently told Multi-Housing News.

Gaines indicated to the source that much of the volume is in large transactions worth $20 million or more, while high numbers of large property sales have pushed the median price per unit to $91,900 from $83,300 the previous year. Despite the changes already reported, Gaines stated that further potential for growth remains. In addition, more transactions in the $1 to $20 million range may occur than in the past 12 months.

The activity has likely been encouraged by rising rents, according to Gaines. With new construction limited to about 670 units in the metro area during 2012, down from 2,500 the year before, Chicago rents have benefited landlords and rental property management firms. According to Gaines, planning for as many as 16,000 units over the next four years indicates developers are aware of the demand.

The city's vacancy rate reached 5.1 percent in the third quarter of 2011 and is projected to hit 5 percent at the end of the year, according to Marcus and Millichap. The firm projects suburban vacancy rates, which stood at 4.7 percent during the third quarter, will hit 4.5 percent by 2012. Effective and asking rents have risen about 1.5 percent in the city and 0.6 percent in the suburbs, and are also expected to improve.