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Multifamily Market Projected to Strengthen in 2004

PHILADELPHIA-Despite anemic employment growth, Marcus & Millichap says the apartment market here has shown "marked resilience." He sees "continued steady appreciation in values" for multifamily investment throughout the MSA.

By Marita Thomas | Updated on November 21, 2003

PHILADELPHIA-An apartment research report from the local office of Marcus & Millichap indicates that strong multifamily fundamentals will sustain demand and push up values over the next several years, boosting an already strong market. Vacancy in the MSA is currently estimated at 3.5% and is forecast to rise to 3.9% by the end of 2004.

Multifamily construction will increase in the MSA during 2004, with 2,500 new units forecast to be delivered. While that is heavier than the 1,700 units completed in 2003, Jeffrey Algatt, regional manager of M&M’s local office, says, the increase is “not excessive given the size of the metro area.”

Center City posted a multifamily vacancy rate above the regional average in third quarter 2003, at 4.9%. More expensive, class A units in Center City bore the brunt of the increase, with vacancy at 6.3%, while class B and class C units had a combined vacancy rate of 2.8%, according to the report.

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