U.S. Housing Market Conditions, First Quarter 2003: National Data

Lancaster, Pennsylvania
The Lancaster metropolitan area in southeastern Pennsylvania, known for its farms and Amish population, is gaining a reputation as a retirement destination market and an affordable housing market for commuters. From 1990 to 2000, 11 of the 60 townships and boroughs in the county have experienced population growth greater than 20 percent. In the northeast area of the county the townships of Brecknock, East Cocalico, East Lampeter, Manheim, and Warwick collectively gained approximately 13,500 people. The townships of East Hempfield, Mount Joy, Manor, West Hempfield, and West Lampeter also experienced relatively large increases in population during the decade.

Growth in the Lancaster area, especially in the suburbs, can be attributed to in-migration of retirees to the area and to the increasing number of families seeking affordable housing who are willing to commute to jobs in surrounding metropolitan areas.

Population in the Lancaster area increased by 11 percent from 1990 to 2000, or by approximately 47,800. During this period the 65-and-older population increased 19 percent and the 75-and-older population increased 38 percent. The region is home to Willow Valley, one of the largest lifecare facilities in the nation. There are a number of other retirement communities in the area, many of which have plans for expansion in the near future in response to the continued demand from the elderly wanting to come to the area. The Lancaster area’s rural setting and close proximity to Philadelphia, Harrisburg, Wilmington, and Baltimore make it an ideal retirement area for people from those areas who wish to remain close to family.

The Lancaster area is experiencing the effects of the current downturn in the national economy, although its own economy is continuing to grow. From 1990 to 2000 nonfarm jobs increased by approximately 1.7 percent annually, or 3,300 jobs per year. After 2000 this rate of growth dropped to 0.4 percent annually, or 860 jobs per year. Even with the economic slowdown, unemployment remains quite low. The average unemployment rate for the Lancaster area for the 12 months ending January 2003 was 3.7 percent, its highest level since 1994.

With the increase in the senior population the healthcare industry has registered some of the strongest growth in the area. The healthcare and social services sector added 1,000 new jobs in the 12 months ending January 2003. The second largest job growth occurred in the leisure and hospitality industry, which increased by 600 jobs. During this period many of the service-producing sectors also reported gains, but the manufacturing sector lost 2,100 jobs. According to the Economic Development Company of Lancaster County, the largest private-sector employers in the area are Armstrong Holding Company, Inc., and R.R. Donnelley and Sons Company. Agriculture remains an important part of the Lancaster area’s economic base. The most recent data from the 1997 Census of Agriculture indicate that the farming industry in the county has been relatively stable. Although the amount of land devoted to farming increased by 3,468 acres, the number of operators whose principal occupation is farming remained constant at around 3,380.

A variety of infrastructure projects to revitalize downtown Lancaster are under way. Two of the biggest projects are a $100 million convention center and hotel project, scheduled to open in 2005, and a proposed 5,000- to 6,000-seat minor league baseball stadium, planned for the summer of 2005.

An increasing number of people are commuting to employment centers in the Harrisburg, Philadelphia, Reading, and York metropolitan areas from Lancaster. As a result Amtrak is planning to invest $140 million to upgrade service on its Keystone Corridor route that runs between Harrisburg and Philadelphia through Lancaster. Amtrak is planning to construct new passenger stations in Paradise Township, east of the city of Lancaster, and in Mount Joy Borough, located in the western side of the county. In addition, the Lancaster station is undergoing a $7 million renovation. These upgrades will make the area more attractive for commuters looking for more affordable housing than that in other nearby areas.

The Lancaster County Association of REALTORS^® reports that sales of new and existing homes for the first quarter of 2003 totaled 1,202 and that the average sales price for the period was $137,950. Demand for new homes has remained steady during the past 24 months. During the 12-month period ending March 2003 single-family building permit activity totaled 1,097 homes, down 1 percent from the same period 1 year ago. Permits were issued for 327 multifamily units in the 12-month period ending March 2003. Most of these units are for townhouses in both sales and rental developments.

The county government has taken an active role in maintaining Lancaster’s rural character and preserving open space by creating growth areas throughout the county and directing the majority of new developments toward those areas.

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