Even though apartment buildings have been built and many others are on the drawing board from Upper Macungie Township to Easton, the Lehigh Valley is still considered one of the toughest markets in the U.S. to find a rental.
Someone in the market for an apartment may be competing with as many as 16 others for a single unit.
According to new data from RentCafe, the Valley is considered the third-hottest small rental market in the country.
“What’s driving this?” RentCafe said in the report. “A stagnant supply of new apartments, high lease renewals and fierce competition for every available unit.”
The study found that the Lehigh Valley has an occupancy rate of 96.4% with a renewal rate of 78%, which is one of the highest rates in the country.
RentCafe gives the Lehigh Valley a rental competitiveness index score of 92.4 out of 100, an increase of five points over the year. The national average score is 74.6.
Lafayette, Indiana, had the highest rate among small markets with a competitiveness score of 93.8 and an occupancy rate of 96.9%, while runner-up Fayetteville, Arkansas, is at 93.6 and a rate of 96.6% Both are homes to major universities.
Right behind the Lehigh Valley is Harrisburg, which has had no major apartment projects in the recent past, RentCafe noted. Its score is 89.7 and the occupancy there is 96%.
RentCafe noted that the Lehigh Valley is still seeing demand outpace supply, despite a 0.19% increase in housing stocks.
“The area’s universities and convenient location near major hubs like Philadelphia and New York City make it especially appealing to young renters,” RentCafe said.
This year, the Lehigh Valley Planning Commission reviewed buildings with 2,090 units through August.
Developers are trying to keep up. Fox Run Partners recently bought land in Upper Macungie that is slated to have 22 buildings holding 132 apartments just west of Trexlertown. Repurposing older buildings has been a option for some: Developer Nat Hyman is expanding The Bindery complex in Allentown with 20 more units while the former Cement National Bank building in Northampton is being converted into 12 units with retail space.
LVPC numbers show that renters make up nearly 86,000 households in the Lehigh Valley — about 33%. It’s a 7% increase since 2005 and a 2% increase between 2018 and 2019 alone.
Among the big markets in the U.S., Miami had the highest rental competitiveness index score, 92.2. The Philadelphia suburbs were 10th at 81.6.
Morning Call reporter Evan Jones can be reached at ejones@mcall.com.
