Friday, July 06, 2012

Hot Pittsburgh Real Estate Market

Shrug off the population estimates. Wait for better migration numbers. But pay attention to two things in Southwestern Pennsylvania. The first is the size of the workforce. With each passing month, another record falls. The region is enjoying historical highs. The second data point concerns home sales. The metro market is blistering:

Ron Croushore, president of the West Penn Multi-List, as well as a principal of Prudential Preferred Realty in the region, expects homes to continue to sell briskly in the region while also expressing concern over what he sees as a growing shortage of homes to sell.

“With historically low interest rates and increasing consumer confidence, the southwestern Pennsylvania real estate market is hot,” said Croushore, in a prepared statement. “However, we are seeing a shortage of homes for sale in all price ranges in our region.”

Pittsburgh, a shrinking city, has a shortage of supply. With all the vacancy and blight, this may come as a shock to some. Perhaps the population is robustly growing.

I think the rush of people is yet to come. There's a bump, for sure. Newcomers are trying to cram into all the same places. In late 2010, I was on a cityLIVE! panel with Luis von Ahn. I recall him mentioning that Pittsburgh was expensive. Moderator Jesse Schell agreed. When all costs were considered, real estate was comparable to Los Angeles. The best talent liked only a few neighborhood. Supply was dear. Affordable Pittsburgh was a myth.

The economic health of metros paints with very broad brush strokes. Whereas the forces of globalization acting on an urban geography are almost hyperlocal. Our metrics tend to be too coarse to pick up on this transformation. Thus, a hot real estate market in "Southwestern Pennsylvania" jumps out of nowhere.

I've been watching this dynamic play out in Cleveland. A few good inner ring neighborhoods does not an urban renaissance make. Proof? The City's population is in decline. That fact lords over every neighborhood. That number trumps low vacancies and rising rents downtown. The feeling of vitality in Ohio City can't possibly be real.


Anonymous said...

This phenomenon doesn't surprise me. Between my observations of gentrification & suburbanization in Chicago & DC in the last 20 years, it's obvious that the "golden quarter" suburban phenomenon has spread to select urban and inner ring areas. To borrow a concept from Richard Florida and perhaps even Nassim Taleb, it's not about spiky metros or cities, it's about spiky neighborhoods (fractal gentrification, if you will).

DBR96A said...

In Pittsburgh, the "golden quarter" of the city is to the east, and in the suburbs it's to the north. I imagine those are where most of the steepest appreciation is.