Marcus & Millichap’s 2015 National Apartment Report cites continuing steady job growth and the formation of new households as the reasons for an increase in apartment demand in the region. Vacancy will remain tight, enabling operators to increase effective rents to an all-time high by year end.
Click the link below to view the full report. Specifics about the Philadelphia market are available on Page 44 of the report.
The apartment market in Center City continued to show signs of strength in 2014. In Center City, landlords of Class A apartments saw rents increase by 3.7 percent to $2,128 a month, or $2.23 a square foot. Vacancy rose slightly from 5.5 to 5.7 percent. In the suburbs, rents increased by 3.4 percent to $1,458 a month, or $1.43 a square foot. Vacancy declined from 5.6 to 4.4 percent.
Oversupply is always a concern, especially with 4,104 units either under construction or on the boards that could hit the market in the next three years. However, with Millennials and Empty Nesters continuing to move to urban areas, companies adding jobs, and the delay in first-time homebuying, the additional units have the possibility of being absorbed without disrupting the Philadelphia market.
Click here to read the full article on the Philadelphia Business Journal’s website