Philadelphia’s postpandemic multifamily market has been defined by oversupply, high vacancy and big concessions to lure in renters with lots of choices.

That status quo is set to shift as the region’s construction boom wanes, according to data from CoStar.

New leases outpaced deliveries regionwide for the first time in 13 quarters, CoStar Associate Director of Market Analytics Brenda Nguyen reported.

Greater Philly’s vacancy rate for the spring leasing season was 7.4%, down from a peak of 7.8% late last year. That’s still well above the 4% vacancy the region saw in mid-2021, but Nguyen believes the tide is turning.

The region saw 35,000 units delivered over the past three years. A large share of those are located within Philly proper, where developers raced to get projects underway before a tax abatement program expired in 2021.

That urban construction boom was particularly concentrated on Northern Liberties and Fishtown, which still have relatively high vacancy rates of 25.1% and 19.5%, respectively. But vacancy is falling there too, CoStar reported.

“We are experiencing an all-time low in starts, in projects and permits being pulled,” Trophy Commercial Real Estate co-founder Saam Tashayyod told Bisnow earlier this year.

“There’s a lot of inventory coming online right now … and not a whole lot of inventory backfilling it in the next few years.”

Aside from high supply, the interest rate environment and uncertainty around the Trump administration’s tariff policy are chilling new developments.

“People are probably waiting just because it’s difficult to underwrite deals with a high level of certainty,” Eclipse Development co-founder Michael Dinan said.

The situation is different in suburban Philadelphia, which RentCafe said is the fifth-most competitive rental market in the nation in a new report. There is a nearly 95% occupancy rate in that part of the region, which has not seen a similar construction boom. Just 0.1% of the rental stock there are new units.