As the housing market continues to mend, analysts find the young-adult sector of the market is lagging. Some feel the lack of young first-time buyers is the main component holding the housing market back. However, this may not be the case everywhere. A burgeoning young, knowledge-based workforce is contributing to housing and overall economic growth in Pittsburgh and Cleveland, according to the latest Home Value Forecast from Pro Teck Valuation Services.
Pittsburgh and Cleveland rank third and eighth on a list of metros with the highest percentage of employed individuals aged 25 to 24 with graduate or professional degrees, according to a recent report from Cleveland State University's Center for Population Dynamics.
These two cities are following in the footsteps of Boston, which notably transformed from a labor-based to a knowledge-based economy in the 1980s, according to the center.
"What metro is the 'next Boston'? Pittsburgh is a likely candidate," the center stated in its report. This transformation to a knowledge-based labor force, specifically focused on technology, has allowed Pittsburgh to bypass the worst of the housing crash, according to Pro Teck.
Cleveland is a few steps behind in its transformation, but it is experiencing growth in knowledge-based jobs. "[I]f you want to act, you go to Hollywood. If you want to practice cardiac care or make medical devices you come to Cleveland," the Center for Population Dynamics researchers stated.
Currently, Cleveland homes remain 30 percent below their pre-crisis highs, although "we are seeing Cleveland home prices on the rise as their relatively new knowledge-based economy takes hold," according to Tom O'Grady, CEO of Pro Teck Valuation Services.
"With today's youth looking for work/life balance while struggling to pay off student debt and other obligations, it's easy to see why Pittsburgh, Cleveland and other Rust Belt cities could see a renaissance in the years to come,' O'Grady added.
In addition to its focus on the transforming cities of Pittsburgh and Cleveland, Pro Teck ranked the housing markets top 200 core-based statistical areas based on home sales, home listings, prices, inventory, days on market, sold-to-list price ratio, and foreclosures and REOs.
The top 10 markets in August span the country with representation from the West, Northwest, and Southwest. The top five markets include Portland-Vancouver, Oregon-Washington; Indianapolis-Carmel-Anderson, Indiana; San Antonio-New Braunfels, Texas; Seattle-Bellevue, Washington; and Omaha-Council Bluffs, Nebraska.
"All the top metros have homes selling in less than 70 days and a low ratio of foreclosure sales," O'Grady said.
In contrast, the bottom 10 markets have much larger inventories—between 6 and 21 months—and a higher percentage of foreclosure sales, according to O'Grady.
At the bottom of the list were Jacksonville, North Carolina; Scranton-Wilkes-Barre-Hazleton, Pennsylvania; Youngstown-Warren-Boardman, Ohio-Pennsylvania; Lakeland-Winter Haven, Florida; and Gary, Indiana.