Despite an October hiccup in multifamily-housing construction starts, no one in the industry is anticipating the end of the rental boom anytime soon.
In October, multifamily starts nationwide declined 25.1 percent to a seasonally adjusted annual rate of 338,000 units.
The steep drop was largely attributable to a huge increase in September's starts and the residual consequences of storms affecting the South late in the summer months, the National Association of Home Builders reported.
In real estate, a one-month decline in anything is seldom a bankable indicator of the future, industry observers say. And the Northeastern United States saw increases in both starts and building permits in October.
In Philadelphia, construction, renovation, and acquisition of multifamily rental units continues.
Eli Rosen, senior vice president of Gebroe-Hammer Associates, recently was involved in arranging more than $60 million in sales encompassing more than 350 units throughout the city's central and western neighborhoods.
These included Garden Court Plaza, a 146-unit, 13-story 1920s-era building at 47th and Pine Streets, and Roosevelt Apartments at 2216-2222 Walnut St.
In 2015 thus far, Rosen and managing director Joseph Brecher brokered sales totaling $128 million and 1,250 units.
"Investor appetite has been insatiable, and the tenant base of young professionals continues to absorb new product metro-wide at a historic pace," Rosen said.
Investor activity "ignites in a dependable Philadelphia market" is how real estate investment services firm Marcus & Millichap put it.
What makes this market so dependable?
"Healthy economic indicators are driving growth in the Philadelphia economy," said Marcus & Millichap's fourth-quarter outlook.
The local unemployment rate has reached its lowest level since the recession, the firm's report said, pushed down by corporate expansion. The Philadelphia workforce will grow 1.2 percent in 2015, or by 35,000 new positions, it added.
Last year, this region added 45,400 jobs to the market, led by gains in the education and health-services sector, Marcus & Millichap noted, and the growth encouraged developers to accelerate the pace of construction, with builders concentrating on the high-rent Center City market.
The suburbs haven't been forgotten, though.
The largest multifamily project under construction is the Parc at Plymouth Meeting, with 398 luxury rentals, being built by Toll Bros.' Apartment Living Division.
On the drawing board at the Camden waterfront is developer Liberty Property Trust's multiuse project, which will include office, retail, and hospitality space as well as more than 200 residential units. Construction is scheduled to begin in the fall of 2016, with completion tentatively scheduled for 2019.
The region's developers brought 2,560 units to market in the last four quarters, expanding the stock of available apartments by 0.7 percent. During the same time frame a year earlier, builders increased the inventory 1 percent through the completion of 3,585 rentals.
Developers focused attention on Center City, where the average rent is more than $700 above the region's average, Marcus & Millichap said. One-third of all annual completions came to market there.
Philadelphia builders have more than 7,100 rentals currently under construction, 1,300 of which are scheduled for delivery in the fourth quarter.
The average effective rent climbed 2.9 percent year over year, to $1,189 a month, in the third quarter, Marcus & Millichap said.
Center City residents pay $2,070 a month, on average, nearly 55 percent more than the next most expensive submarket.
Northwest Philadelphia offers the most affordable units, with landlords charging just $943 a month, Marcus & Millichap said.
Tight market conditions will push rents higher by 3.5 percent, boosting the average rent to $1,194 a month by year's end, the firm stated.