Friday, September 3, 2021

The Remarkable Strength of Lehigh Valley's Multifamily Market

By Ben Atwood CoStar Analytics

It is a good time to be an apartment owner in Pennsylvania's Lehigh Valley.

The market’s year-over-year rent growth sits at a lofty 10.5%, the strongest levels its ever recorded.

Every region within Lehigh is posting above-average gains in the third quarter, with the strongest seen in Central Lehigh County, where year-over-year growth is over 15%.

There are some properties in this area that have been posting jaw-dropping levels of growth. The Allen Gardens, the Bridgeview, the Spring View Apartments and the Woodmont Ridge are all showing year-over-year gains over 20%. In the Tremont Apartments, rents have climbed by more than 40% in the past 12 months.

Suburbs such as Central Lehigh County show the strongest levels of gains, but Lehigh's more-urban areas are also performing well. This is particularly true in downtown Allentown, where year-over-year growth is close to 10%.

That’s impressive for any urban core, but doubly so in Lehigh because these rents aren't being compared to a 2020 rent downturn. That’s something many other cities experienced in 2020, as renters fled to the suburbs.

But downtown Allentown never saw this drop. Its rents kept growing through the coronavirus pandemic and its new arrivals filled within days of opening their doors.

Rapid success in leasing up isn’t limited to just Downtown. Though most recent construction has been in the city, new suburban projects, such as the Dream Lehigh Valley Apartments, also filled within months of opening.

The data shows a near total absence of vacant units across the Lehigh Valley. The market's overall vacancy rate sits at 1.3%, which is also a record, and some of its suburbs are even tighter.

There's very little that's available to immediately rent in institutional assets inside of Northwestern, Southeastern and East Lehigh County. Scour listings on and you will find few units available and even fewer owners offering renters any form of concessions. 

There's also almost nothing underway to disrupt Lehigh's rent-growth, either.

The regions to watch in the coming quarters will be Northwestern Lehigh County and Southeastern Northhampton County. These areas have over 300 units underway, and the rapidity of their lease-up could provide further insight into apartment demand.

Looking at the data now, its hard to believe these projects will struggle at all. Their success could prompt more growth and indeed, Lehigh looks primed for it.

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