In the Agora: The Rust Belt Rides Again

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November 07, 2007

The Rust Belt Rides Again

This Money Magazine list of the top 25 towns with affordable housing is interesting for what it doesn't say almost as much for what it does. In browsing the list, it appears half the towns are either in Ohio or upstate New York, and the three Pennsylvania towns in the top 10 are all in the Pittsburgh metropolitan area. The average house prices on the list are in the $85k-$95k range, and in only three towns are the prices over $100,000.

The list doesn't tell us why houses in these towns are so cheap, but we can take some good guesses. While the OH-PA-NY Great Lakes region isn't hemorrhaging workers like it was in the 1970s and 1980s, population growth is still generally negative. Cleveland, Ohio, the BBC reported this week, is the sub-prime mortgage capital of the United States, and its environs are blighted with foreclosed and abandoned buildings (hat tip). Likewise, Buffalo and Pittsburgh have large stocks of vacant housing (Buffalo is #2 in the nation, according to Wikipedia). While it's somewhat unfair for these cities to stand in for the entire region, the fact that the majority of the towns on Money's list are clustered in three states has to say something. It's classic economics really, low demand for houses due to fleeing population plus surplus housing stock (to say nothing of the quality) equals low home prices.

Nevertheless, I've always imagined Buffalo and Pittsburgh to be nice places to live, if you can stand the weather and can find a decent paying job. And that latter caveat is the catch.

Posted by David Darlington at November 7, 2007 09:17 PM

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I've visited Pittsburgh back in my grad school days when I had to hit the U of Pitt library for finance journals that Kent State and Akron U didn't have. It seemed a decent-enough town.

Buffalo, I've yet to visit past driving through on the way to Niagara Falls. The lake-effect snow would scare me off of western NY; that's heavy even by Indiana or Michigan (my native turf) standards.

Posted by: Mark Byron at November 8, 2007 12:39 AM | permalink

I think Mark is right - the harsh climate of the lake effect snow is probably a big factor.

There are other places that are relatively poor in the nation, but it definately seems that good climates are the main factor in determining real estate value.

Except the northeast - I don't know why anyone wants to live up there.

Posted by: Dave S. at November 8, 2007 06:52 AM | permalink

Pittsburgh is a fun town, I've always liked it. But it's prepetually voted a bad town for the singles life, so you might have to bring your own party. Heads up.

It may be a bad singles town because it can't support many job-seeking college grads.

Posted by: gjoe at November 8, 2007 08:35 AM | permalink

I never thought I'd live to see the following, but sure enough, it was in the Boardman, Ohio listing: "Part of that up-and-coming Pittsburgh-Northeast Ohio region..."

Posted by: Pack at November 8, 2007 09:32 AM | permalink

The snow don't bother me none, but the jobs and single life situations are definitely minus marks in my book.

Which stinks because $85,000 gets you a luxury park bench in the DC metro region.

Posted by: DMD at November 8, 2007 09:52 AM | permalink

November 07, 2007

The Rust Belt Rides Again

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