Morning Headlines: Apartment Market Cooling in Center City
On the heels of yesterday’s news about home ownership taking a nosedive comes a report from Delta Associates via the Philadelphia Business Journal outlining an uptick in apartment vacancies in Center City.
According to Natalie Kostelni, the report found a vacancy increase in South Jersey, the suburbs and Center City between mid-year 2013 and now. That puts vacancies in Center City at 5 percent, South Jersey at 4.5 percent and the suburbs (a coy term for a variety of areas, one must add) at 5.7 percent.
Rents, Delta found, are also taking a hit in Center City, falling 1.6 percent to $2,141. In the burbs, it’s a different story, where rates have actually gone up to an average of $1,447 a month.
All of this begs some questions about the new residential construction seemingly everywhere downtown.
With about 5,025 units under construction or on the drawing board, “Philadelphia’s supply-demand relationship indicates that vacancy will continue to edge up slightly and rent growth is likely to stay negative over the next 24 months.”
Yikes. But not to worry, Delta says. All will be well. Somehow … vaguely.
In spite of some of this initial concern about the number of units that will eventually hit the market in Philadelphia, Delta is confident that demographic trends toward renting and urban living will eventually support what ultimately gets built.
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