LVEDC Research Helps Compare Affordability With Other Regions
By George Lewis on February 19, 2019
This article originally appeared in the February 14, 2019 issue of “Quarterly Connections,” a quarterly newsletter LVEDC distributes to municipal officials in the Lehigh Valley.
The research conducted by the Lehigh Valley Economic Development Corporation (LVEDC) builds greater knowledge of the Lehigh Valley’s economy and how our region stacks up against places that compete with the Lehigh Valley for jobs and talent.
Two years ago, LVEDC rejoined a national research project that compares the cost of living in more than 300 participating communities around the country. The project is directed by the non-profit Council for Community and Economic Research (C2ER), of which LVEDC is a member.
Results are published quarterly based on the prices of more than 60 products and services in categories such as food, housing, health care, utilities, and transportation. LVEDC collects and averages prices for these 60 items from across the Lehigh Valley.
C2ER economists assign a weighting to each item based on consumer spending patterns. Housing, for example, is typically the largest expense for consumers, and as a result is weighted much higher than products such as gasoline, movie tickets and eggs.
This research produces an index that can be used to compare the Lehigh Valley’s cost of living, excluding state and local taxes, to any other participating community and to the average of all participating communities. It provides an objective way to analyze one of the Lehigh Valley’s perceived quality-of-life advantages: affordability.
Since 2017, the overall cost of living in the Lehigh Valley has been consistently around 5 percent higher than the national average. However, compared with other markets in the Northeast, the Lehigh Valley’s cost of living is 6 percent less than Philadelphia, 10 to 20 percent less than northern New Jersey, and 127 percent less than Manhattan.
In most spending categories, Lehigh Valley prices are close to, if not slightly below, the national average and have held steady quarter-to-quarter. The exception is housing costs. In the most recent quarter reported, Lehigh Valley housing costs were 20 percent higher than the national average and continued an upward trend.
Other research confirms the trend. The Greater Lehigh Valley Realtors reported a 3.8 percent increase in the median home sales price for the 12 months ending in December 2018. The commercial real estate research firm CoStar reported that the average market rent for apartments in the Lehigh Valley of $1,263 per month is the highest it has been in the last 10 years and increased by 2.8 percent over the past year.
Housing affordability and availability are important factors in attracting talent to a community and persuading them to stay. While Lehigh Valley housing costs compare favorably to large Northeast markets, especially the metro New York area and New England, the region has a distinct disadvantage compared with prospering communities in the South and Midwest. Housing costs in the Lehigh Valley are 18 percent higher than Pittsburgh, 22 percent higher than Nashville, 29 percent higher than Charlotte, and 36 percent higher than Columbus.
LVEDC shares research results with municipal officials and other partners throughout the Lehigh Valley to support a strong and vibrant economy that provides opportunity for all Lehigh Valley residents.
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