Are We Overstocking Center City Rentals?

Post 2 - Overstocking Center City RentalsThe rental market is booming in Philly. According to a report put together by the Center City District, 2013 saw the addition of more than 1,700 multi-family housing units in the Greater Center City area – between Girard Avenue on the north and Tasker Street on the south and between the two rivers west and east.

In 2014 and 2015, another 1,700 rental units are expected to be built, according to   the report and an additional 2,700 are proposed. Which makes me wonder: are there going to be too many rentals in Philadelphia real estate?

Looking at the report, the answer seems to be no. At the end of 2013, the vacancy rate for apartments in Philly was just under 4 percent, lower than the national average.

The size of the average household in Center City is smaller than in the rest of the city and smaller than the rest of the country, at 1.55 persons per household compared to 2.54 for all of Philly and 2.61 for the entire country. Smaller household size means the area needs more units for the same number of people.

We should also look at the number of people coming into the area compared to the number of units being built. The report estimates that about 3,738 households came to the area since 2010 and that 3,209 units were added in the same amount of time.

Looking forward, the report estimates that slightly more than 5,200 households will come into the area by 2017 and that slightly more than 5,200 new units will be built. It seems that supply is not outpacing demand when it comes to rental properties in Philly.

While new units are being built, older units continue to exist. The report notes that the owners of some older apartment buildings in the area might reduce the cost of rent or update the interiors of the units to better compete with the newer buildings

The times where residents gained a solid education from our multitude of highly regarded Universities and split are GONE! The students are staying after their commencements, their settling down and planting roots in this amazing City. Families are making the move from their one-bedroom rentals and buying in new emerging neighborhoods, then making another move within the city limits as their families grow.

I can’t predict the future for certain, but it looks as though the influx of new rental buildings in the city won’t flood the market. Instead, the greater number of rentals will meet a demand that is continuing to build. With the recent ground breaking of Cira Center South and Comcast’s vision for another soaring tower that will soar above the current Comcast Center, it is a testament to the future of this city, its potential, and the need for more housing to accommodate the work force that will relocate from all over the globe to make Philadelphia their home!

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