Fewer than 1,500 will be completed this year, Algatt says, noting that the majority of new units are concentrated Downtown in the Center City area.
Because of the low overall construction rate and Downtown concentration, Algatt says the city's apartment market "has not suffered from the current economic downturn as much as most of the country." The vacancy rate has inched up and now approaches 3.5%, according to the study.
Vacancies have been slowly rising over the past 24 months and the trend will continue for the next 12 months, he predicts. He also notes that Philadelphia's high affordability of single-family homes combined with low mortgage rates to undercut apartment occupancy levels.
The increased vacancies and some rent concessions, he says, will keep asking rents unchanged through year-end. He anticipates a "full recovery" and upward momentum in the apartment market by the end of 2003.
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