Thursday, August 13, 2009

Pittsburgh's One Of The Strongest Housing Markets: But How Long Can It Last?

First the good news.

Business Week has ranked Pittsburgh as the nation's sixth strongest housing market.

"Methodology: The metros are ranked by the share of homes with rising values in the second quarter compared with the second quarter of 2008. The annual change is the year-over-year change in median values for the metro in Q2 compared with the same period last year. The quarterly change compares the second quarter with the first quarter. The ranking is based on's Q2 Home Value Index, which is the median "Zestimate" for a given geography for a given time period. The Zestimate™ is Zillow's estimated market value of a home. This figure is computed by taking many different data points from public records and entering them in a proprietary formula."

Obviously, this is a game of relative performance since many of these markets also have modestly declining prices.

1 Boulder, Colorado
2 Spartanburg, South Carolina
3 New Orleans, Louisiana
4 Binghamton, New York
5 Fayetteville, North Carolina
6 Pittsburgh, Pennsylvania
7 Little Rock, Arkansas
8 Gainesville, Georgia
9 Burlington, North Carolina
10 Oklahoma City, Oklahoma

The first thing that stands out is that very few of these are major metropolitan areas, which gives one some idea how broad and damaging the housing bubble was. Another feature common to most is that two of them, Oklahoma City and Little Rock are State Capitals and colleges and universities play a big role in their economies. The Fayetteville, North Carolina area is home to Fort Bragg and Pope Air Force base as well as three colleges.

One thing we should have all learned from the bubble was that trends that look like they can't go on forever, usually don't.

As, to the Meds side, things might look even worse.

There are many, many positive things to report about Pittsburgh and many great opportunities here which I will try to touch on in another post. Even so, we need to be aware of our real position.

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