If you’ve been wondering why there’s such a flurry of activity in the rental market, look no further than residential real estate sales. Sellers who collected top dollar for their homes are renting while they look for a property to buy. Renters priced out of buying a home are renewing their leases, and homeowners who opted to renovate rather than sell are renting while their properties are being overhauled. “People who thought they’d rent for six months because their homes are being renovated are finding they need to rent for another six months,” says Hala Imms of Berkshire Hathaway Home Services Fox & Roach in Rosemont. “It’s taking much longer to finish the projects because of glitches in the supply chain and contractors being double-booked.”
Due to demand, rents are up about 10 percent, a trend the Federal Reserve Bank forecasts will continue through 2023, with another 7-percent spike that year. That’s the highest inflation rate in more than three decades.
Over the past decade, local developers have been investing in apartment complexes to serve young professionals working in finance and technology in Valley Forge, Great Valley, King of Prussia and Chesterbrook. In 2012, the only tenant in Upper Merion Township’s Village at Valley Forge was a Wegmans supermarket. Today, there are more than 2,000 apartments, including Smith at Valley Forge (a pet-friendly complex with a sky lounge, billiards room and spin studio) and Indigo 301 (an amenity-rich property located on bike and walking trails).
AVE King of Prussia is a sophisticated destination for renters in transition, offering apartments on a month-to-month basis with leases of up to 12 months. Units are fully furnished, with built-in work areas. Amenities include coffee and tea service and valet dry-cleaning. In this crazy market, apartments are snapped up as soon as they become available. “The demand for flexible-stay rentals and long-term rentals has risen in conjunction with the home sales market,” says Lea Anne Welsh, chief operating officer of Korman, AVE’s parent company.
The ability to work remotely is fueling a trend toward lifestyle renting— essentially leasing a home that favors personal interests over proximity to the workplace. According survey results from the National Multifamily Housing Council, 56 percent of renters who work virtually would consider membership in a housing program similar to a vacation club. They’re also interested in renting their primary apartments through Airbnb or Vrbo when they stay in their vacation club rentals.
With interim and short-term rentals hard to come by, would-be tenants are exploring creative alternatives, paying up to $6,000 a month for executive-level homes. “They’re reaching out to snowbirds and asking if they can rent their house for the winter while the owners are in Florida,” says Imms. “We’ve also seen buyers who are willing to give sellers a month of free rent as part of their negotiations.”
Traditional long-term rentals are also in demand. Imms recently listed a freshly renovated second-floor apartment with two bedrooms, skylights and a loft in Gladwyne for $1,600 a month. No smoking, and no pets.
Expect to pay more for a fitness center, pool and maintenance crew. At Radnor Preserve in Wayne, a three-bedroom, two-bathroom apartment rents for $3,200 a month. Amenities include valet trash service, 24-hour emergency maintenance and electric vehicle charging stations.
A two-bedroom, two-bath apartment fetches $2,665 per month at ARLO, a pet-friendly apartment complex in Malvern. The property includes a pool, clubhouse, screening room and state-of-the art fitness center.
To keep up with demand, developers in Philadelphia are converting empty office buildings and factories into apartments, creating 1,800 units last year, according to a RENTCafé survey. Welsh says occupancy at AVE properties is currently more than 95 percent. Rents are up by about 10 percent, in keeping with the national average. “It’s due to inflation in the cost of paint, supplies, insurance and labor,” she says.
AVE offers amenities beyond pools and gyms, including lounges, media pods, communal tables and cafes. Putting greens, outdoor movie viewing, barbecue grills and dog parks are fast becoming standard features. “Renters are looking for an experience,” says Welsh.