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Updated 4 months ago,

User Stats

1,270
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842
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Alan Asriants
Agent
  • Real Estate Agent
  • Philadelphia, PA
842
Votes |
1,270
Posts

I am noticing the "Donut" effect in most Major Cities not just Phila

Alan Asriants
Agent
  • Real Estate Agent
  • Philadelphia, PA
Posted

A couple of years back I read an article regarding what was called the donut effect when it came to major cities. Specifically, this article was talking about Philadelphia. As an agent and investor in this area for a number of years, I have also found that this trend and what the article was explaining, was pretty accurate. 

You might be asking what is the donut effect. It's very simple. If you put a donut over the city of Philadelphia with the center of the donut around the Center City area and nearby (essentially the hole), and the rest of the donut was basically everything else around it, you would find this trend:

In the "Hole" of the donut:

1. The Real Estate Market in the "Hole" was struggling and having a hard time keeping up

2. Many people were leaving this market

3. Crime, homelessness, etc rapidly increased causing the above to directly increase as well

Everything else:

1. Real Estate market boom

2. Larger migration with demand outpacing supply

3. Development of more consumer friendly commercial locations like: attractions, restaurants, quick bite places, bars, etc

A couple years later today I am still noticing the same trend in my City. Visiting the city frequently, I noticed that it is not as alive, homelessness and crime are rampant, car break-ins are high, and the overall vibe of the city is very dirty and poor in my opinion. 

Thinking that this was mostly unique to my city, I have traveled to a few areas where I have seen this same idea and heard from other travelers their same stories. Recently being in Seattle and Denver, I noticed this effect as well. Hearing from travelers in Portland they claimed the same. 

With more growth, rising prices, and development in suburban areas will we ever see cities return to what they were? Most consensus I have have heard was that people will never return and don't NEED to. Lot's of people work from home and the need for a financial district and commuting to the city is now a thing of the past for most. 

While my research is extremely limited (and entirely based on what I see - which is arguably an investors best tool), I did want to ask what others here have noticed in their major cities. 

Personally if the trend continues, more people will move out and it will just become more and more deserted and need to be repurposed. 

People have cars, they work from home, they don't want to look for parking, and they want to feel safe. The suburbs give them that. Will the cities ever restore themselves? 

Would love to hear from as many people across the states!

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Alan Asriants - New Century Real Estate
5.0 stars
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