Rental Market Update with PhillyLiving Management Group’s Chief of Growth

According to Zillow, rental prices across the country ended a non-stop streak in October, falling .01% month over month. Can you believe this was the first monthly decline in two years? What does this mean for renters? To put this shift into perspective, rent is now growing half as fast as it was six months ago as stated by RedFin. Mike McNelis, Chief of Growth at PhillyLiving Management Group, believes this decrease is a sign that the rental market is stabilizing. He sees this as a return to a more “normal market” after a tremendous amount of growth over the last two years.

During the pandemic, we saw historic levels of migration away from cities. With the flexibility of remote work, people re-evaluated their living situations. Once covid restrictions loosened, people started coming back to the cities and the supply was there waiting. Of course, Philadelphia saw rent growth because there was nowhere to go but up. It is misleading to look at rent growth in the city and not understand that it was due to a bounce back from covid. What we are seeing now is more normal. Mike believes we will continue to see a steady rental market in Philadelphia, with 3% growth rates. The growth rates that we were seeing previously were almost 10%, which is not sustainable. 

While rental prices have trended down overall, some markets saw bigger drops than others. For example, Cincinnati and Ohio saw the biggest month-over-month percentage decreases. Cincinnati experienced a decrease of 6.8% and Ohio with -5.7%. Philadelphia ranks 8th on the list, with a 2.4% decline. Mike says that Philadelphia is fortunate to have a steady market with comparatively affordable prices. Cities such as New York, Washington DC, and Boston have much higher rents. Check out this video to see how Philly’s rents compare to its neighboring cities. 

Not only does Philly’s affordability make it desirable for renters, but the City of Brotherly Love is popular for its unique history, charm, and many new construction properties. It’s a great place to live for people who want a big city without the high cost of living. If you have any questions about the rental market or are thinking of making a move soon, please be sure to contact us. Remember, Philadelphia tenants do not pay any fees to work with a leasing agent.