Tuesday, March 10, 2009

Smoke and Bubbles

The Centre Daily Times has story today on the proposed purchase of a new campus for Penn State Lehigh Valley.  As I've previously noted, Old Main has decided to upgrade to a new facility at Penn State Lehigh Valley based on , or at least publicly justified with, very questionable demographic projections. Here is how projections are presented in the CDT.
Penn State Lehigh Valley Chancellor Ann Williams said the college is looking at expanding the programs it currently has and, hopefully, expanding the number it offers in the near future.

Lehigh Valley’s population is forecast to grow 22 percent by 2030, and the number of high school graduates in the area is expected to go up 13 percent a year through 2016. Williams said Lehigh Valley is becoming an “exurb” of Philadelphia and New York.
In my earlier post, I showed that  the population projections have been undoubtedly skewed by a housing bubble which has now popped.

I decided to dig a little deeper in the Lehigh Valley housing market.

While the most widely used measure  of home values  is the Case-Shiller index,  I couldn't find the index for the Lehigh Valley. I did find that the real estate Web site Zillow.com  includes the region in its home value reports. Graphs from the report are here and the tables are here (Excel). Both confirm that the area has had a bubble which is now kaput.

As I commented at the CDT this morning, the only way that this purchace makes sense is if somone gives the campus to the Univerisity and someone else has agreed to pay for future upkeep.

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