Market Insights | Summer 2025 | Philadelphia
Summer 2025
Average
Rent
Average
Occupancy
YTD Sales
Volume
YoY Rent
Change
Occupancy
Change
Philadelphia serves a population of nearly 1.6 million residents and is the cultural, financial, and economic hub of a five-county region that includes Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in southeast Pennsylvania. The broader Philadelphia-Camden-Wilmington, PA-N.J.-Del.-MD. Metropolitan Statistical Area (MSA) is spread across southeastern Pennsylvania, southern New Jersey, and northern Delaware and is within a day’s drive of 40% of the U.S. population. Philadelphia benefits from its strategic geographical location, lower living costs compared to Washington D.C., New York City, and Boston, and rich cultural and recreational amenities.
Employment
Greater Philadelphia exerts global influence as one of the nation's largest markets and ranks ninth among U.S. economies with a Gross Regional Product (GDP) of over $600 billion. The region boasts one of the largest, most dynamic, and highly educated workforces, supported by approximately 100 colleges and universities. Exceptional transportation options like train connectivity from Washington, D.C., and New York City strengthen the metro area’s 3.1 million-strong highly skilled workforce. Philadelphia ranks No. 25 among the top 40 global ecosystems for entrepreneurs and startups by Startup Genome and generated $92 billion in ecosystem value from July 2021 through December 2023. The region houses eight Fortune 500 company headquarters, including Cencora (No. 10), Comcast (No. 35), and Lincoln National Corp. (No. 228). Philadelphia has a diversified economy with the leading industries in the areas of finance, insurance, law, education, life sciences, medicine, research, and leisure and hospitality.
As of June 2025, the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro lead all major metro areas in nonfarm job creation with the exception of New York, the nation’s No. 1 mainstay for job gains. Greater Philadelphia had a net year-over-year gain of 46,500 jobs, a growth rate increase of 1.5%. The education and health care supercenter had the largest YoY job growth rate increase of all sectors at 4.3%.
| % ∆ from June 2024 | |||
|---|---|---|---|
| Metro Area Employment (Thousands) | June 2025 | Philadelphia | National |
| Total Nonfarm | 3,164.00 | 1.5% | 1.1% |
| Mining, Logging And Construction | 124.3 | -2.0% | 0.9% |
| Manufacturing | 179.9 | -0.2% | -0.7% |
| Trade, Transportation, and Utilities | 546.4 | 0.6% | 0.6% |
| Information | 52.2 | -0.2% | -0.2% |
| Financial Activities | 227.1 | -0.7% | 1.0% |
| Professional and Business Services | 506.2 | 1.4% | -0.1% |
| Education and Health Services | 751.6 | 4.3% | 3.3% |
| Leisure and Hospitality | 297 | 0.7% | 1.4% |
| Other Services | 130.5 | 2.6% | 1.0% |
| Government | 248.8 | 1.3% | 1.5% |
Source: U.S. Bureau of Labor Statistics
Rental Market
Philadelphia ranks 5th in rent growth among the top 15 largest U.S. multifamily markets, behind only Chicago, New York, Boston, and Minneapolis. 12-month asking rent growth stands at 2.0% compared to 1.0% nationally, consistent with the pre-pandemic trends of 2017-2019. Absorption rates are at near-record levels, with the City of Philadelphia accounting for the top five submarkets with the highest annual absorption. Over half of all units currently under construction are located in these upscale locales, and while rental demand remains high, the concentration of new deliveries has resulted in increased concessions and rent compression. Conversely, suburban areas with limited supply are leading the region in rent gains, driven by rising demand due to in-migration to more affordable locations outside the urban cores. Still, occupancy rates continue to rise. Leasing activity is expected to remain active through the second half of 2025 with demand outpacing deliveries, resulting in more balanced supply and demand levels. Rent growth is projected to increase from 2.0% to 3.1% by year’s end, and to stay the course in positive territory into the first half of 2026, hovering at an annual rent growth gain of 3.5%.
Average Monthly
Mortgage Payment
Average Monthly
Rent
Source: U.S. Bank. Median sale price of $416K. 30-year-fixed with 20% down at 6.74%. Estimated taxes and insurance included.
Average Rent / Vacancy
Asking Rent / Bedroom
Multifamily Construction
Absorption levels in Philadelphia were at a near all-time high over the past year, with the submarkets in the City of Philadelphia accounting for the highest level of annual absorption. Steady employment gains, waning cost-of-living challenges, and more favorable rental options contributed to an increase in new household formations. Over the past 12 months, 9,097 units were delivered throughout the metro area, and 9,577 units were absorbed, surpassing the pre-pandemic average of 6,300 units from 2017 – 2019, according to CoStar. By the end of 2025, construction starts are forecasted to plummet by 55% over 2024, indicating new development will decline in tandem. As supply pressures ease, market fundamentals will balance towards pre-2019 historic norms, fostering rent growth to just over 3.0% by year's end.
Multifamily Completions
Past 12 Months
Single Family
Permits
Multifamily Permits
(5+ Units)
Median Single
Family Price
Completions / Net Absorption
Currently, 7,934 units are under construction compared to roughly 11,000 one year ago. Just 5,650 are scheduled for completion in 2025, a marked decrease of 48.7% over the previous year. Of the units under construction, 71.8% are in the upper-tier segment, and 60.5% of all units under construction are in upscale locales within the City of Philadelphia.
Units by Submarket Delivering in 2025
Units Under
Construction
Units UC Delivering
in 2025
| Submarket | Units Under Construction |
|---|---|
| Art Museum / Northern Liberties | 1,182 |
| Camden / Pennsauken | 0 |
| Cecil County | 330 |
| Center City | 500 |
| Central Bucks County | 0 |
| Cherry Hill / Haddonfield | 266 |
| Conshohoken / Plymouth Meeting | 481 |
| Horsham / Willow Grove | 134 |
| Lower Bucks County | 0 |
| Lower Burlington County | 150 |
| Lower Camden County | 81 |
| Lower Chester County | 0 |
| Lower Delaware County | 0 |
| Lower Gloucester County | 0 |
| Main Line | 155 |
| Norristown | 0 |
| North Philadelphia | 960 |
| Northeast Philadelphia | 0 |
| Northwest Philadelphia / Manayunk | 233 |
| Salem County | 0 |
| South Philadelphia / NavyYard | 861 |
| Southern New Castle County | 0 |
| Southwest Philadelphia | 0 |
| University City | 549 |
| Upper Bucks County | 101 |
| Upper Burlington County | 875 |
| Upper Chester County | 299 |
| Upper Delaware County | 0 |
| Upper Gloucester County | 0 |
| Upper Montgomery County | 0 |
| Upper New Castle County | 386 |
| Valley Forge / King of Prussia | 250 |
| West Philadelphia | 141 |
Multifamily Sales
12-month multifamily sales volume was $1.4 billion, rebounding from the trough in the previous year of $664 million and nearing the historic 10-year average of $1.8 billion. The market sale price per unit increased 3.8%, and the average market cap rate was 6.3%. National and private investors, along with developers, continued to dominate transaction activity, representing 70% of traded assets and 46% of sales volume, particularly focused on value-added properties. Transaction activity with institutional investors gained momentum, comprising 33% of multifamily market volume over the past year. In the first half of 2025, time-on-market reduced significantly from 6.5 months in the first quarter to four months in Q2 2025. Market activity is expected to remain active and steady through the end of 2025 and into the first half of 2026, driven by continued rent growth and stabilizing financing conditions.
12 Mo. Transaction Volume
YoY Change
12 Month Market Price/Unit
Annual Price Change
Average Sales PPU / Cap Rate
In the first half of 2025, upper-tier properties had the highest sale volume at $506.1 million, with 11 transactions and an average cap rate of 6.1%. Comparatively, sales volume for mid-tier properties was $196.6 million with 21 transactions and an average cap rate of 7.1%. The Upper Chester County submarket had the highest 12-month sales volume at $215.2 million, with 9 assets and 734 units traded. The highest transaction activity occurred in the North Philadelphia submarket, with 25 assets and 816 units trading hands. Total sales volume in North Philadelphia was $111.1 million.
Team
Corey Lonberger
Founding Partner
Ken Wellar
Founding Partner
Luke DeLuca
Managing Director
Robert DiPasquale
Director
Doug Emrich
Associate Director
Steffan Ramos
Senior Associate
Daniel Yadgaroff
Associate Director