To put it plainly, the United States is in the midst of a slow-motion economic bifurcation driven almost entirely by one variable, the cost of shelter. 

The country is dividing into two very different economies: one where a normal household can still buy a perfectly good house with a 30-year mortgage at 2–3x household income, and another where the same house now trades at 10–15x income and requires two six-figure tech salaries or a seven-figure inheritance. The national narrative fixates on San Francisco, Austin, Boston, and Miami, places where median home prices now flirt with or exceed $1 million. The commentariat wrings its hands about “affordability” while quietly assuming the coastal price structure is the new normal. It is not. It is a localized catastrophe masquerading as a national trend.

Drive four hours north of New York City and something remarkable happens. In Buffalo, the median existing home sold for roughly $235,000 in mid-2025. In Pittsburgh, the figure is about $255,000. Adjusted for the local wage base, these cities are now cheaper, in real terms, than they were in 1990, 1980, or even 1970. A household earning the area median income of $70–80k can buy the area median house with a payment similar to what their parents paid in the Carter administration.

This is not gentrification delayed. It is gentrification denied. Zoning in both cities remains mercifully sane: single-family neighborhoods are still zoned for, well, single-family homes, and no one has yet discovered the political religion of banning duplexes in the name of “preserving community character.” Supply has kept rough pace with demand, and demand has been moderate because no one was handing out Series B cheques has decided to relocate corporate headquarters to Cheektowaga or Monroeville.

The economic consequences are profound and almost entirely positive.

First, capital is not being incinerated on shelter. In San Francisco a software engineer earning $250k might still spend 45–50% of gross income on housing. In Buffalo the same engineer spends 18–22%. The delta is pure economic surplus: money available for starting businesses, investing in equities, having additional children, or simply living better. Multiply that across a few hundred thousand households and you get a quiet compounding machine.

Second, labour mobility improves dramatically. Young people are not forced into 77-minute one-way commutes or three roommates in a two-bedroom apartment. They buy a three-bedroom house with a yard at 28, walk to work if they feel like it, and start families earlier. Fertility rates in Erie County, PA and Allegheny County, PA are materially higher than in the coastal metros once you adjust for age and education. Demography is not yet destiny, but it is certainly compounding interest.

Third, the local business climate is transformed. When your cost structure is 60–70% lower on the single largest expense for knowledge workers, you can compete on talent-for-talent with anyone. Pittsburgh’s tech and autonomous-vehicle cluster and Buffalo’s modest but growing fintech and insurance back-office presence are not accidents. They are the logical consequence of a cost base that still operates in the reality-based community.

Contrast this with the coastal disaster zones. In the unaffordable cities the economy is increasingly dominated by zero-sum extraction: real-estate speculation, property management, storage units for people who ran out of space, and financial engineering to service the debt required to live there. Productive capital formation collapses. Startup rates plummet. The best engineers spend their evenings doom-scrolling Zillow instead of writing code.

The dirty little secret of American macro over the past decade is that almost all of the productivity miracle attributed to “tech” was in fact a regional phenomenon concentrated in a handful of metros that subsequently priced themselves out of existence. The real alpha now lies in the places that never had the party in the first place.Buffalo and Pittsburgh are not becoming the next Silicon Valley. Thank God. They are becoming something far more valuable: normal American cities where normal economic laws still apply.

Housing is a consumption good that doubles as an inflation hedge, not a speculative asset class detached from wages. Entrepreneurs can build companies without first raising $20 million to subsidise rent. Families can form without needing dual Big-Tech incomes. Capital compounds instead of being torched on mortgage interest.

The rest of the country is slowly waking up to the arbitrage. Net domestic migration numbers do not lie: the Rust Belt diaspora is reversing. Every percentage point shift of the U.S. population toward places where shelter remains rationally priced is a tailwind for long-term real growth.

We have spent fifteen years treating housing as a financial asset. The cities that quietly refused to play that game are about to inherit the compound interest.

Yours in rational markets,
Alan Findlay
Abbotsinch Capital LLC