NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI). The IMI highlights the fact that housing markets are local and that there are metropolitan areas where an economic recovery is underway. The index measures three readily available monthly data series that are independently collected and indicative of improving economic conditions. The three series are employment, house prices and single family housing permit growth.
For the twelfth release , 99 markets are classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Erie, Pennsylvania metropolitan statistical area (MSA).
The improvement of the Erie economy and its housing market is due to several factors including a recovery in manufacturing, which employs about 25% of the workforce, its position as a major retail center, drawing shoppers from the tri-state area (OH, NY and PA) as well as Canada, and its position as a fast growing regional healthcare center with a number of large hospitals including UPMC Hamot, Millcreek Community Hospital, and St. Vincent Medical Center. In addition there is Saint Mary’s, a large nursing home with numerous facilities and Regional Health Service Inc. with many offices scatterd across the area and the already large and expanding Lake Erie College of Osteopathic Medicine (LECOM) which has a medical school, school of pharmacy and a new dental school. Erie also benefits from a steady stream of tourists who travel from Cleveland, Pittsburgh and Buffalo to enjoy access to Lake Erie and beautiful Presque Isle. Erie is also home to a number of colleges including (Penn State) Berhend College, Gannon University, Mercyhurst University and Edinboro University. Lastly, Erie is home to the Erie Insurance Group, GE Transportation Systems which makes among other things locomotives, Plastek Industries and a large Lord Corporation facility.
According to home builder Mike Corsi, Vice President of the C & C Development Group, “things are definitely getting better. The combination of growth at the hospitals and universities and turnover at our large firms has guaranteed a steady stream of well paid households that continually relocate here for work. In addition, growth at LECON has resulted in a shortage of rental apartments for the students and increased demand for housing from new faculty that frequently results in a demand for new housing. We are also witnessing a rise in remodeling activity. It’s being caused by the simultaneous realization by many home owners that they will be staying their existing house for a while longer, and that home prices are on the upswing.” He concluded by saying “tourism also is a big help. While many tourists come just for the weekend to enjoy the water, the vineyards or skiing, others buy cottages and stimulate the economy in that way.”
According to Jim Grieshober, Owner of J.E. Grieshober Plumbing-Hydronics , “Erie never saw huge increases in real estate prices and as a result has not seen much in the way of a decline either. We miss the highs and the lows. And, of late pent-up demand is starting to make itself felt among those who are more secure in their job and can get a loan. Things would be even better if only the credit situation improved and if new regulations that add thousands and thousands to the price of a new house had not been passed. That being said, the cost of living is low, Lake Erie is quite a draw and there is not much inventory around.” Whatever the cause, house prices are definitely firming. They are up 1.4% since the trough in February 2011 and are off less than 3.7% from their all–time high set in December 2009.
Improving economic conditions have resulted in payroll employment being down exactly 2% from its peak in June 2000 and up by a healthy 9.9% since the trough in January 2010. Single family permitting activity is up 8.0% on a seasonally adjusted monthly average basis from the trough set in April 2011. While new homes are being built in many parts of Erie, activity has been primarily centered in a ring around the outskirts of Erie extending from Girard Township, Fairview Township and Millcreek Township in the west, through Summit Township in the south and Harborcreek Township in the east.