Apartment Construction Explodes in Center City Philadelphia

Apartment development is ramping up in Philadelphia and the market’s urban core claims a large share of all that new supply. In 2023, a total of 9,197 units came online across Philadelphia’s 16 submarkets, the highest level since RealPage Market Analytics began tracking the market more than 20 years ago. That new supply was driven by completions in Center City Philadelphia which added a market-leading 2,488 units. Looking ahead, the pace of new apartment supply is expected to explode in Philadelphia and especially in the urban core. Of the 18,610 units under construction in Philadelphia at the end of 2023, roughly 7,300 of those units (39%) were located in Center City Philadelphia. About 13,400 units are slated for delivery in Philadelphia during 2024, with 41% of those completions coming online in Center City Philadelphia, setting new record highs. All that new supply is expected to grow total inventory in Center City Philly just under 12% in 2024 alone, nearly quadruple the expected annual inventory growth in the market (3.3%) and the U.S. (3.5%). The 5,481 units scheduled to deliver in Center City Philadelphia this year marks the biggest volume among the 74 urban core submarkets in the nation’s 50 largest markets. However, new supply has taken a toll on Center City Philadelphia, as it recorded the market’s weakest occupancy rate of 93.6% as of January 2024. Despite the onslaught of new supply and declining occupancy, Center City Philadelphia was able to eke out a year-over-year price increase during January, though mild at 0.7%.