New York and Pittsburgh had the highest effective rent increases from a year earlier, at 2.8 percent, followed by San Francisco at 2.7 percent, Reis said.Pittsburgh “has held up really well,” said Jones of CBRE. The city’s concentration of employment in the energy industry has helped bolster rents, he said.“They’ve managed to skirt the recession,” Jones said. “The market’s tight enough to support further rent growth. It’s a small market but one that’s performed really well.”
Pittsburgh is on a tear right now. I'm beginning to think that I haven't been bullish enough on the region's future. I didn't expect this shrinking Rust Belt city to escape the gravity of its past (save the public pension liabilities) so quickly.
Others are getting wind of the growth and opportunity. A reader of this blog (thanks for the email message) looked into the recently published McKinsey Global Institute report, "Urban World: Mapping the Economic Power of Cities". The baseline comparison is 2007 with projections offered for 2025. Check them out here. (Interactive map)
Pittsburgh should gain about 350,000 people. Before you get too excited (or freaked out), other Rust Belt cities (e.g. Detroit and Cleveland) are also expected to grow. More impressive is the GDP growth. Per capita, Pittsburgh is projected to go from $47,000 (2007) to $65,000 (2025). That's a healthy jump (~38%). GDP per capita growth rates for some other cities:
Seattle - 33%
Portland - 20%
Houston - 24%
Dallas - 34%
Chicago - 26%
Boston - 38%
I was most surprised by the lack of economic growth in Portland. You can see that Pittsburgh stands up well to some stiff competition. For the United States, it is a hot spot. To be sure, the population increase is modest. But I don't put much stock in such metrics. Most of that growth will come from net inmigration, not a robust birth rate or significant immigration. Pittsburgh will be attracting a lot of talent and will serve as the anchor for the Eastern end of the Chi-Pitts megalopolis.