After a record-setting 2017, Philly’s apartment construction activity is expected to “remain strong” throughout 2018, before slowing down in the years that follow.
That’s according to a new report by real estate services firm Cushman & Wakefield, which estimates that 3,826 new units are expected to deliver in the Philadelphia metro in 2018.
While those are some impressive numbers—and Philly in particular is in need of more housing—2018 won’t see as many apartments deliver as it did in 2017, which saw a record-breaking 4,040 new apartments come online.
“The more than 4,000 new units delivered in 2017 is the highest annual total on record in the Philadelphia MSA,” said Jared Jacobs, Cushman & Wakefield’s Research Manager in a statement. At the same time, asking rental rates increased by 4 percent, from $1,241 in 2016 to $1,290 in 2017.
Center City in particular saw the biggest boom in apartments and rental rate hikes last year—not a surprise since population is growing in these neighborhoods at a faster rate than the rest of the city.
And yes, with the ongoing apartment construction, expect asking rents to rise by 3.5 percent in 2018.
But is relief on the way? Yes, and it’s not too far behind 2018, forecasts Jacobs. “While we expect construction activity to remain strong throughout 2018, look for a considerable drop off by 2019 and 2020.”
- 2017 Multifamily Marketbeat report [Cushman & Wakefield]