Philadelphia’s consistent population and job gains sustain a strong multifamily market, which continues to attract investors. Rent growth picked up in the fourth quarter, closing 2018 at 2.9 percent year-over-year.
Employment gains were led by education and health services (13,200 jobs) and professional and business services (12,200), followed by the trade (6,400) and construction (4,400) sectors. The metro is beginning to polish its status as an emerging tech city with its own identity. The business community is supporting technology startups and emerging ventures, while focusing on retaining highly skilled talent, one of the metro’s top rental demand drivers. The fast pace of development has led to a 3.7 percent jump in construction jobs year-over-year, the highest sector expansion for the 12 months ending in October.
At $1.4 billion, 2018 transaction volume was almost on par with the 2017 figure and second only to the 2015 cycle high, when 72 deals closed for $1.7 billion. Young professionals prefer well-located apartments in core areas, which is spurring further development. The metro is anticipated to add 5,460 units in 2019, which would mark a peak for this prolonged cycle. However, in line with national trends, strong demand is expected to sustain absorption, keeping rent growth at 2.2 percent in 2019.