Philadelphia Apartment Vacancy: A 2023 Snapshot and Owner Takeaways
Updated: Oct 6
Historical market snapshot: Originally published November 9, 2023. The figures and forecasts below describe the 2023 apartment market and are not current vacancy estimates. Distinguish luxury apartment lease-up from the performance of an individual stabilized property.
Philadelphia has witnessed a surge in multifamily development, introducing nearly 11,400 new apartment rentals in the past year. Impressively, almost 80% of these additions fall within the upscale, four- and five-star-rated property category. However, this influx has led to a 10.7% vacancy rate in the fourth quarter of 2023 for this top-tier market, doubling the vacancy rate seen in three-star and lower-rated units.
While there's been a positive trend in the annual absorption performance of four- and five-star apartments, absorbing 5,600 units in the past year, aligning with pre-pandemic leasing levels, the resurgence in renter demand has only partially offset the supply-driven vacancy increase. Despite absorbing 4.3% more than the all-time low in the first quarter of 2022, the high-end apartment vacancy rates have still risen.
Interestingly, the elevated vacancy rates vary across the Philadelphia region. The city limits, representing nearly 70% of current multifamily development, experienced a higher 11.7% vacancy rate at the start of the fourth quarter. In comparison, luxury apartments in the suburbs, Southern New Jersey, and Northern Delaware have vacancy rates of 8.5%, 8.8%, and 6.7%, respectively.
Analyzing completed projects from 2022 shows a slow approach to stabilization, with 85% of the units in 47 four- and five-star-rated buildings leased by late 2023. However, among the 7,930 units in 62 existing high-end buildings completed in 2023 and actively in the lease-up phase, only 45% have been leased.
With an additional 16,000 high-end and luxury apartments set to be completed in the next 18-24 months, it's anticipated that, despite healthy renter demand, vacancy rates will continue to rise through at least mid-2024, potentially dampening rent growth.
Source and historical context
For contemporaneous reporting on the luxury-apartment vacancy figures, see CoStar’s November 8, 2023 analysis. These figures concern a specific market segment and time period.
What Philadelphia property owners should review
Before applying a regional vacancy headline to your building, compare properties with a similar location, condition, unit mix and rent level. Review actual collections and concessions alongside advertised rents.
Separate newly delivered buildings in lease-up from stabilized properties.
Check whether competing properties offer concessions or different amenities.
Review tenant turnover, upcoming lease expirations and repair needs.
Use recent evidence when setting rent or evaluating a sale.
Discuss your property’s position
Considering a sale or looking for a current property review? Contact John Bianchimano at RE/MAX Commercial / RE/MAX 2000 at 215-778-8610. Provide the property address, unit count, occupancy and your timeline.
Evaluate your property with the right context
Review how commercial property valuation works and our Q1 2026 market commentary.
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