Zillow predicts Philadelphia will be among coldest markets 2021!!

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Zillow predicts Philadelphia will be among coldest markets 2021!!

Garrett M.
Rental Property Investor · Philadelphia, PA · Member since 2015 · 180 posts · 66 votes

Just came across an article from Zillow with their picks for the hottest and coldest markets of 2021. Austin was their pick for the hottest market.

But why would Philadelphia be among the top five coldest markets? It was ranked fourth coldest after, get this, New York, San Francisco, and LA. I think they wrote “Portland” and something went haywire with autocorrect! Their argument was that people are fleeing overpriced coastal cities. I get New York and San Fran.... but Philadelphia?? There was no data to support their prediction, but they must be going off of some evidence, right?!

Does anyone have any insight as to why /how they would come up with this prediction? I’m not seeing it in Philly. There’s no inventory and everything is selling for 20% more than it was three months ago. Are people leaving in droves? Would love to hear your thoughts!

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Gregory H.
Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
5y

The city of Philadelphia has stagnated this past year overall. You do still see significant growth in the gentrifying neighborhoods a few removed from Center City, but a lot of the demand has been sucked out by Millennials choosing to accelerate their move to the suburbs, and Gen Z just getting out of college deciding to boomerang back with their parents for a year or two since they can't enjoy the perks of city life right now anyway. The only saving grace for city prices has been that there is very low inventory on the sales front. Rental prices have tanked though. I think once things get back to normal, you will see strong growth in the city from pent up demand. The Philly burbs are crazy right now though. Our investment portfolio up in Bucks county has probably seen 15% appreciation in the past year, and from what I've seen, the Main Line is even more aggressive. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y

    as screwed up as Portland is politically.. the RE market like many areas is quite robust to red hot.. 

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  • Suzette T.
    Rental Property Investor · Acadiana / South Louisiana · Member since 2019 · 115 posts · 49 votes
    5y

    The only insight I have is that my husband and I know of a good handful who have moved to Austin. Usually it would be Houston with how oil field goes around here, but Austin and San Antonio seem to come up more lately.

    1Reply
  • AJ ShepardPro Member
    Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
    5y

    @Garrett M.

    Autocorrect on Portland, that was funny! It’s certainly a weird time. There has to be some pent up movement in all the markets. The pandemic has moved typical market cycles and many people are making different decisions than what was normally expected. I’m in Portland and maybe I have a rosier outlook than some. For sure better than this article:

    https://www.wweek.com/news/city/2021/01/30/portland-is-the-new-pompeii-according-to-forbes/

    I keep looking at the math though. California has 55m people. With a 1% attrition rate that’s 500k, right? If only 1/2 of those come to Portland. That’s more than a 10% increase in population for Portland..... I just see that there are a few other markets that have been much higher in cost driving people away (though still popular to move to) that we will keep picking up the pieces. Same may be for Philadelphia.....

    1Reply
  • David Bokman
    Real Estate Investor/Wholesaler · Philadelphia, PA · Member since 2015 · 757 posts · 318 votes
    5y

    As a lifelong Philadelphian of over 41 years, I just packed up all my stuff and moved my family down to Florida.  I don't know if that Zillow article is correct or not but people are definitely leaving. I know many who have and more that are planning on it. At the same time, I know many realtors that are very busy. So who really knows what's going on. I do know that the surrounding counties are BOOMING especially the suburbs. 

    4Reply
  • Garrett M.
    OP
    Rental Property Investor · Philadelphia, PA · Member since 2015 · 180 posts · 66 votes
    5y

    @David Bokman Did you, or the others you mentioned who are leaving decide to leave because of anything to do with the Philadelphia market?

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  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    I spent a good portion of my career in Philadelphia, but moved to San Antonio, TX a few years ago. I know a lot of people that have made a similar move in the last couple years, and this past year seemed to accelerate that trend. I think in general people are expecting a shift away from the densest cities, which would include Philly. I still own one rental property in Palmyra, NJ, and I know a bunch of people have moved out of the city to the suburbs too.

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  • Eli B.
    Rental Property Investor · Philadelphia, PA · Member since 2018 · 47 posts · 19 votes
    5y

    @Garrett M. Interesting they are writing that. For whatever it's worth, when you look at individual Philadelphia zip codes on Zillow, most seem to predict a price increase for next year

    1Reply
  • Justin Pencook
    Riverton, NJ · Member since 2016 · 33 posts · 4 votes
    5y

    The trend I see is that people are looking to move to towns outside of the city but are still close enough to the city where they can get to and from work with no hassle. Palmyra, Riverside, Pennsauken, Delran, Cinnaminson are all excellent towns for investing in South Jersey! 

    1Reply
  • Stephen Kappre
    Real Estate Agent · South Jersey · Member since 2017 · 252 posts · 143 votes
    5y

    As an agent in South Jersey I have always had buyers coming from the cities (Philly and NY), and in all price ranges. I don't have as many sellers looking to move from Jersey to the cities that's for sure. I could see prices still going up even in slower markets just because interest rates and inventory are so low and competition so high. Of course the nice thing about South Jersey is you have easy access to Philly, DE, the Jersey Shore and New York, either by train or car. 

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  • David Bokman
    Real Estate Investor/Wholesaler · Philadelphia, PA · Member since 2015 · 757 posts · 318 votes
    5y

    @Garrett M. Not if you are referring to the Philadelphia real estate market, I'm still in it. I can't speak for others but I left because I decided I can't raise my kids in this city any longer. The last year in my view has destroyed what living in the city was all about. Plus, too cold.....Florida sunshine is much better for the health! 

    2Reply
  • Joseph ScoreseBusiness Member
    Banker · Philadelphia · Member since 2009 · 2k+ posts · 649 votes
    5y

    Hi @Garrett M.

    You must of missed the highly publisized massive looting and riots over the summer in Philadelphia, which creating massive flight of residents to move to the suburbs reversing the move to a complete halt to the move back into the urban cities, the city government is strangleheld in all the cities referenced above for this completely. The play in acquistion in the next year will be which suburban markets surrounding Urban Cities sch as Philadelphia (whether NJ OR PA), The glimmer of hope is NYC is much worse than Philly for Safety which it is attracting New Yorkers to move hear to work virtually and below there means. whether you rent to section 8 or risk with market rents where cannot currently evict due to Covid 19. Happy Real Estate Hunting!

    Regards,

    Joe Scorese

    1Reply
  • Account Closed
    Contractor · Mickleton, NJ · Member since 2020 · 114 posts · 112 votes
    5y

    are the articles on zillow accurate at all?

    1Reply
  • Mayer M.
    Investor · Cherry Hill, NJ · Member since 2016 · 860 posts · 324 votes
    5y

    @Garrett M.

    Can you post the link for the Zillow article? I’m shocked to hear and don’t believe it to be accurate at all

    2Reply
  • Gregory H.
    Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
    5y

    The city of Philadelphia has stagnated this past year overall. You do still see significant growth in the gentrifying neighborhoods a few removed from Center City, but a lot of the demand has been sucked out by Millennials choosing to accelerate their move to the suburbs, and Gen Z just getting out of college deciding to boomerang back with their parents for a year or two since they can't enjoy the perks of city life right now anyway. The only saving grace for city prices has been that there is very low inventory on the sales front. Rental prices have tanked though. I think once things get back to normal, you will see strong growth in the city from pent up demand. The Philly burbs are crazy right now though. Our investment portfolio up in Bucks county has probably seen 15% appreciation in the past year, and from what I've seen, the Main Line is even more aggressive. 

    5Reply
  • Ryan D.
    Developer · Philadelphia, PA · Member since 2018 · 100 posts · 81 votes
    5y

    Article here: https://www.zillow.com/researc...

    Zillow can hardly get their current zestimates right. Why are we relying on them to use their crystal ball to predict the future? No one knows what the future holds, buy good deals, know your market, and don't overleverage. 

    4Reply
  • Nick Brown
    Real Estate Agent · Philadelphia, PA · Member since 2015 · 76 posts · 25 votes
    5y

    Whatever the Philly market is currently losing--the PA burbs and SJ burbs are finding it. I still have a lot of first time buyers in the 25-30 y/o range looking to buy in Philly. Covid has definitely put a damper on things. As a 28 year old current Philly resident there's often times where I would like to pack up and move at least to either one of the suburbs. I suspect a nice bounce back in the city once everything is fully opened again. 

    0Reply
  • Robert Gorra
    Contractor · Philadelphia, PA · Member since 2020 · 40 posts · 37 votes
    5y

    As an investor and contractor I'm glad Zillow said Philly is loosing steam and hope people listen because it will only mean better deals for me and my clients, less competition driving up prices.  BTW, we are seeing quite the contrary to the Zillow report.  

    5Reply
  • Jimmy O'Connor
    Developer · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
    5y

    I've seen so many different reports, some saying that Philly is one of the hottest using average sales price as a metric. Some have used population migration as the indicator. Some use DOM. I think @Nick Brown hit the nail on the head, my suburban sales has gone through THE ROOF. I couldn't agree more with what you are saying about zestimates @Ryan D., especially in this market where there are HARD neighborhood value borders. 

    Still, in this overly hot market, the cold markets are relatively warm. I'm more curious to see how the commercial changes in Philly. There are Plenty of vacant offices spaces that are now proven to be obsolete, what industries are actually needed to fill this void? 

    @Joseph Scorese I think safety concerns via riots could be a factor but I honestly feel as though the COVID restrictions is the main driving factor pushing people around my age out of the city. I didn't really hear from anyone in my social circles saying "I'm moving out because of crime and looting." As a personal and non-data based anecdote, I'm currently in an overpriced Brick Lego in Fishtown which used to make value-sense when all of the bars and restaurants could be fully enjoyed. Back when being shoulder to shoulder was an image of excitement instead of anxiety. The social scene in Philly is heavily dependent on bars, restaurants, and tailgates. It's not like we are Denver where nature can be easily experienced nor are we Nashville with its music scene. The young professionals are realizing A) that they can work from home like most modern jobs and B) If they are going to be limited they'd rather replace the Acme Bag Tumbleweeds and 670sf apartments with a clean back yard where their furry child can run around.  

    3Reply
  • Matt I.
    Architect · Philadelphia, PA · Member since 2016 · 50 posts · 36 votes
    5y

    I work at an architecture firm in Fishtown, and am pretty current on the development trends specifically in the Northeast Philly market. Every single day there's something new that pops up in my feed. 80 units planned at X empty lot. 40 units + first floor retail to take over Y abandoned building. These developers would have to be pretty ignorant to be scaling as fast and big as they are, if people are really abandoning city living as the suburbanites claim. I trust their market research more than zillow, since these companies have a lot to lose if they're wrong.

    I recently bought my second single-family property (in Fishtown). I put maybe 10 offers in before getting this one accepted, and in every single case I got beat out by a cash offer or a bid at way above asking price. So even at the smaller scale, I can't possibly see how this market is going 'cold'.

    I don't have much faith in zillow. Half of the time their listings aren't current or give completely incorrect property data. 

    2Reply
  • Jimmy O'Connor
    Developer · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
    5y

    @Matt I. couldn't agree with you more. Whenever my buyers or sellers argue about comps using zestimate as the end all be all metric, I politely direct them to this link https://www.foxbusiness.com/re...

    2Reply
  • Garrett M.
    OP
    Rental Property Investor · Philadelphia, PA · Member since 2015 · 180 posts · 66 votes
    5y

    Don't feed the troll. Let's keep this conversation about data and business. Not interested in your politics.

    0Reply
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