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Pittsburgh Poised to Have a Strong Multi-Housing Market in 2015

Monday, March 23, 2015

Pittsburgh had a growth in employment 0.7 percent in 2014, up from -0.1 percent in 2013. Employment growth is expected to remain positive in the forecast years remaining around 1 percent, increasing demand for multi-housing buildings in Pittsburgh. Employment and Population TotalsPittsburgh has transformed into a diversified economy and is more than the city of steel. The information and communications technology sector has grown 26 percent since 2012. The healthcare and life sciences sector employs a total of 141,076 employees, and about 96 percent of these jobs are in healthcare.

Axiometrics notes, “Pittsburgh looks poised to become an emerging strong apartment market. With healthcare and tech jobs being added and a limited amount of new supply, new renter households will be formed, and those apartments that do come to market will likely be absorbed quickly. That absorption will allow landlords to push rents.”

Pittsburgh Multi-Housing Development

New supply increased in 2014, with more than 1,600 units delivered, passing the historical high. Another 1,700 units are expected to come to market in 2015, most of which will be delivered in the Belle Field and North submarkets of Pittsburgh.

Multi-Housing Building Occupancy and Absorption

Pittsburgh saw multi-housing building occupancy fall 100 basis points from 2013 to 95.1 percent in 2014. Occupancy is expected to increase slightly in 2015 to 95.2 percent. A total of 2,200 units were absorbed in 2014, compared to negative absorption of close to -1,000 units in 2013.

 

Pittsburgh OccupancyPittsburgh Completions and Net Absorption 

Rental Rate for Multi-Housing Buildings

Annual effective rent growth turned positive in 2014 with a growth rate of 0.9 percent. Annual rent growth is expected to increase in 2015 to 3.3 percent and remain above the long-term average of 1.8 percent through 2019 for multi-housing buildings in Pittsburgh.

 

 Pittsburgh Rental RatesPittsburgh Annual Rent Growth

Contact HFF Pittsburgh for more information regarding multi-housing properties on the market in this area.





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