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Demand for Philly Apartments Isn't Going Away

Philadelphia
Demand for Philly Apartments Isn't Going Away

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.

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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.)

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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.

Related Topics: Gen Ys, Stan Humphries