Philadelphia is expected to remain a tepid market in the coming years.
The overall market grew by just under 8% in 2021, but this was almost entirely due to the residential sector. As working from home set in, people found themselves with a unique combination of low interest rates, few outlets for disposable income, and a genuine need for more space. This grew the residential sector in all cities and was enough to offset declines in other sectors. But COVID is becoming endemic, and companies are insisting that their return-to-office plans are for real this time. The residential sector is expected to return to roughly 2019 levels, which should cause the overall market to follow suit.
The 2020 census has rebuffed several assumptions about where people are living and working. Philadelphia’s population growth was beginning to stall but still managed about 5% over the last ten years. This has in turn breathed life into the Philadelphia market, whose construction workforce grew by a similar amount. When faced with a stagnant market, however, this is expected to push down labor costs in the short term.