"The one thing we're fighting right now is underwriting," Moyer told a meeting of the Real Estate Investment Association. "The lenders have become more conservative about current rents and expenses, especially fuel bills."

Lenders, buyers and entrepreneurs also are concerned about leasing velocity, Moyer says, even though the vacancy rate across the market continues to hover around historic lows. Interest rates also are in the 7% range, though Moyer says he's noticed a bit of a rise over the last 90 days.

However, supply and demand continues working in multifamily property owners' favor. "There are a lot of reasons to buy Chicago," Moyer says. "Tenants have no where to go. When you give them a $75-a-month rent increase in Lakeview, they have no place to go."

As a result of multifamily construction failing to keep pace with job growth for the last several years, the market has seen rent increases of 8% and 6%, respectively, during the previous two years. "In the entire history of Chicago, we haven't seen the rent increases that we've seen," Moyer says.

Marcus & Millichap's research indicates the gap between the average rent payment and average house payment, including mortgage, taxes and insurance, is $441 a month, Moyer says. While that may seem hefty, it is much lower than other major markets, he adds. "Our affordability gap is scarily thin," according to Moyer.Sellers are cashing out at relatively low overall capitalization rates, Moyer admits, but he still offers words of caution to his brokers. "I tell them if you pick your sellers wisely, 2001 will be a good year," Moyer offers. "It will be a long year if you do not pick your sellers wisely."