Shale Gas Area Home Values Grow: Tourist Area Values Fall

Home Values - Tom Shepstone ReportsTom Shepstone
Natural Gas NOW

    

Fractivists speculate shale gas development lowers home values, but the evidence keeps coming showing the opposite. Relying only on tourism is the problem.

A regular reader of NaturalGasNOW.org, an individual who is keen on monitoring economic trends, passed along an interesting chart to me yesterday morning. It’s from an extremely informative website called City-Data.com (check it out) and depicts a disturbing trend in our own area of Wayne County, Pennsylvania, which is one of three well-known Pocono counties where tourism has long been an economic mainstay. Home values are in free fall.

Home Values in the Poconos

The chart, offered below, indicates the median home price in Wayne County, based on the information analyzed by City-Data.com, has dropped like a rock in recent years,

Ho,e values 1

The other two Pocono counties bordering Wayne are Pike and Monroe Counties. The trends there follow a similar pattern, which may be described as relentlessly downward. It’s not a pretty sight and demonstrates how putting all your bets on tourism is never a good strategy for building community wealth.

A diversified economy is essential to sustaining employment opportunities which, in turn, help maintain home values. Pocono area home values, by contrast, are less related to employment demands than the value of the housing for recreational and retirement purposes. The latter is a fickle thing and we see that reflected in the sales data.

home values 2

home values 3

Home Values in the Shale Gas Region

The value of a diversified economy can be illustrated by looking at the three most prominent counties among Marcellus Shale gas producers in Northeastern Pennsylvania: Bradford, Susquehanna and Lycoming Counties. Charts for each may be found below. City-Data.com had significant sales for Bradford County from the first quarter of 2010 on and it indicates and overall stable to upward trend, indicating home values have certainly not been negatively impacted by shale gas development. The trend, in fact, has been generally, up although there was a decline in the first quarter of 2014.

home values 4

Susquehanna County’s home values, beginning with the third quarter of 2011 when there was first enough data to make a meaningful analysis, also show a generally upward trend.

home values 5

Lycoming County, too, has shown an increase in home values since the fourth quarter of 2012 when sufficient data first existed to draw conclusions.

home values 6

Taken as a whole this home values data, although incomplete and representing only the results of such sales as City-Data.com was able to monitor, clearly shows the residential real estate markets have been sustained by shale gas development economic activity, although fractivist speculation always suggests otherwise. Meanwhile, the second home economies on which they all argue we should really depend, have left homeowners under water with mortgages and unable to sell homes except at fire sale prices.

Another fractivist myth destroyed by the facts!

Hat tip: R. Barrett

Update: One of our frequent commenters on this site, Cliff Goudey, a marine fisheries/wave energy guy and LNG opponent from Maine, says “One could also argue that with the threat of fracking hanging over all of PA, who would want to buy a vacation property.” That’s typical of the fractivist speculation I referred to above – all hype and no substance. It reminds of something I should have noted about the three Pocono counties. There is no fracking in those counties due to the DRBC sitting on regulations and there hash’t been any since at least the 1950’s, which means home values have plummeted all by themselves, in contrast to shale gas counties where much fracking is being done and home values have been sustained. Moreover, Pike and Monroe Counties are not believed to have any significant Marcellus Shale gas.

 

 

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20 thoughts on “Shale Gas Area Home Values Grow: Tourist Area Values Fall

    • There is no fracking in the the three Pocono counties, Cliff. Your comment reminds I need to point that out. I will now do so. Thank you!

  1. property value has gone done here ( Zillow est.) 100,000 since 2012 .Property was high when there was a land grab ,but now it’s on the negative .Just part of the Boom -Bust of NG drilling !!

  2. Your statistics need to be updated to real time .Naturally this depends on NG drilling activity in the area.Agreeing with Cliff who would want to buy property in a Gas field area anyhow ? O & G rights did push up land for awhile ,but the reality found by driller’s has brought it back down ( NOT every well is a productive one .Many are plugged due to salt or production levels .

  3. Guess my comment was just to much reality for this blog .Truth property value has gone down here near me ( 100000 for me ) because the land grab is over and drilling co’s find that not every well is a producer due to low volume or heavy salt deposits ….Just stating what I have experienced here….if you want the facts this is it !

  4. I am certain that the land values are not determined by triple-bottom-line accounting methods, so all bets are off, on either side.

    • Good point, but that’s true across the board, too, so most of those effects wash out in the end. This is a subject with which I am throughly familiar and am frequently hired to analyze for non-gas clients. The increase in values in the shale gas region is palpable and the decrease in my home county of Wayne is also patently obvious.

      • Without spending valuable time that one should be paid for to figure it out, I’d say it is very debatable as to whether or not it “washes out”. IMO no way of knowing without doing the work, you are just making the same kind of unsubstantiated claim that you accuse the tree-huggers of.

        • I understand what you’re saying but, from what I see, the evidence matches the reality on the ground. Take it for what it’s worth. Let me also add that I appreciate the demeanor of your comments, which are never sarcastic or condescending. They’re thoughtful and useful, although we’re on different sides at the end of the day.

  5. Pingback: Marcellus & Utica Shale Story Links: Fri, Aug 8, 2014 | Marcellus Drilling News

  6. Having grown up in Pike and Monroe County and my experience with mortgage lending for several years in the area the reason for the dramatic decline in home values in these counties is the large number of homes owned by second home owners. Just looking at the monthly docket of sheriff sales in each county shows that many of the 2nd homes are abandoned and walked-away from financially when the economy takes a downturn. It takes years for the counties to recover. These areas constantly suffer the rise and fall but the real crime is allowing more developments during the good times, consuming more open space when everyone knows the bad times are inevitable. Yet, development is the primary industry after tourism. Yes, Watson, it is due to the “vacation-based” economy and has nothing to do with gas drilling.

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