Despite the positive sign, leasing performance still fell short of the three-year, pre-pandemic norm. During the second quarter of the year, the Philadelphia metropolitan area recorded 2,112 rented units. This marked a significant increase from the mere 494 rented units during the same period last year.
Nevertheless, absorption, defined as the net change in the number of units occupied than vacated, still hovered below the second-quarter average of 2,600 units between 2017 and 2019. While 2021 was an anomaly, last quarter clocked in at only 48% of the 4,460-unit absorption peak achieved in the spring of 2021. The numbers may seem drastic, but the market is rebalancing to its long-term performance from an unprecedented market moment.
Despite a regional slowdown, several urban districts have continued to shine. Notably, the rapidly growing Art Museum-Northern Liberties and North Philadelphia sections of greater Philadelphia saw the highest absorption performance in the past 12 months, with 1,130 units and 1,120 units absorbed, respectively. These areas accounted for an impressive 65% of total absorption in the Philadelphia region. Despite their impressive performance, those areas still faced immense supply pressures, resulting in elevated vacancy rates in recent quarters.
In the suburbs, Burlington County, Conshohocken and Upper Montgomery County saw the highest absorption levels, ranging between 310 units and 360 units each over the past 12 months.
On the other hand, Upper Delaware County, Cherry Hill-Haddonfield and Lower Camden County experienced the lowest leasing activity in the region, with each area having negative absorption of at least 270 units.
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