The strength and pace of development in the multifamily market during the first six months of 2018 will play a major role in the growth of other segments during the second half of the year. Though the overall market could be influenced by inventory, access to capital and local tax laws, the forecast is positive heading into 2019.
A Robust Multifamily Market Will Continue
Residential growth has been strong, primarily near high-traffic corridors with dense commercial development. West Washington Avenue, Girard Avenue in Northern Liberties and East Falls are clearly taking shape as popular areas. Overall, the apartment market continues to hold its ground even as new apartment deliveries have remained near a 30-year high for more than 36 months.
However, the city’s vacancy rate is rising, and rent growth, which is already barely keeping pace with inflation, is decelerating. Expect this trend to persist throughout the second half of 2018, and into 2019. Though supply growth is likely to remain near record highs into 2019, local employment growth is slowing, and the city’s millennial cohort is maturing past the traditional renting years.