The recovery of the housing nationally has put a question in the minds of apartment owners: Will demand slack off as renters become buyers? Zillow chief economist Stan Humphries tells us that the recovery in greater Philadelphias housing market probably wont put much of a dint in the demand for apartments here.
For one thing, rents aren't stratospheric here, and the housing market hasnt taken off as much as in other places, Stan notes. Apartment rents are up only a modest 0.6% in Philly since this time last year, while housing has appreciated only 1.9% since last year, compared with a place like Miami, which is up more than 10%. Then again, Philly housing didnt collapse as completely back in the days of the housing panic. (We prefer an even, zen-like approach to our apartments to counterbalance our sports fanaticism.)
Stan expects demand to continue to fall heavily on the rental side." A lot of people still have impaired credit, and the Gen Ys are still less than sanguine about buying a place to live. People are also still moving out of the doubled-up arrangements with roommates and family members that the recession forced on them, and theyll usually rent their own place before buying. Renters by choice are also less interested in buying: The events of the last few years have re-affirmed their decision not to buy. The developers of new apartments, such as the 321-unit 2116 Chestnut St in Center City, are betting renters by choice stay that way. Leasing at the John Buck Co tower--which includes studios starting at $1,700 and one-bedrooms at $1,950--began this month.
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