Philadelphia Region Multifamily Report

2022 was a year of two halves for the Greater Philadelphia multifamily market. The first six months saw a continuation of the strong transactional activity that characterized 2021. The second half, however, held a full reversal in activity due to repeated increases of interest rates by the Federal Reserve. With the Fed maintaining a hawkish stance and no near-term catalyst to assuage investors, the cautious “risk off” strategy commonly held by institutional investors has continued to put a damper on transactional velocity during 2023, with multifamily sales volume down more than 70% year-over-year. However, along with favorable fundamentals that tend to improve in the Spring, the investment community is
showing signs of cautious optimism that we are approaching the conclusion of interest rate hikes. As a result, investors are beginning to feel increased confidence that interest rates will remain within their underwritten range from contract execution through closing, which will likely lead to more transactions.