The Pittsburgh housing market has managed to carry over a lot of momentum from the end of last year. In fact, experts suggest that Pittsburgh real estate is firing on all cylinders. Home sales are up in nearly every region, dollar volume is up, and homebuilders are expressing a lot of confidence as their businesses grow in relation to the economy. For all intents and purposes, The Steel City is on a healthy trajectory.
The good news can be traced back to October 2014, as home sales took a noticeable step forward. As recently as the first quarter of this year, the increase was supported by a 6.2 percent increase in sales. Moreover, the dollar volume of said transactions also saw a significant spike, 14.2 percent to be exact.
The median sales price in the Pittsburgh housing market is $ 114,000. That is a far cry from the national average, and down slightly from the same time last year. The median list price, on the other hand, is $ 128,450. Over the course of a year, the listing price has dropped 1.12 percent, or about $ 1,450. Pittsburgh didn’t have the wild swings in home prices that led to the foreclosure crisis, and has fewer distressed properties.
The Pittsburgh real estate investing market is one of the hottest in the country. In fact, Pittsburgh real estate investing is responsible for an average gross profit return of 55 percent per flip. That is the third highest in the country, behind Baltimore and Tampa. The national average was about 35.2 percent. And yet, so-called home flips were a fraction of overall sales in Pittsburgh — just 2.9 percent in the first quarter — compared to 4 percent across the United States. Such a disparity suggests that there are many more properties to be flipped in the Pittsburgh real estate investing market, said Daren Bloomquist, Vice President of RealtyTrac.
“It’s not at the top of the list of a lot of real estate investors when they think of which markets to buy in,” Blomquist said. “To me, Pittsburgh looks like a good opportunity, has all the elements, but there’s not a ton of flipping going on.”
According to RealtyTrac, the Pittsburgh housing market has about 1,423 homes in some state of foreclosure, which is twice as much as the amount of homes that are actually for sale. These properties are either scheduled to be placed up for auction in the near future, are at risk of being repossessed, or have been repossessed and are currently sitting on banks’ books as non-performing loans. Either scenario should prove to be incredibly beneficial to the entire Pittsburgh real estate investing market.
Of these properties, 41 percent are headed towards the auction block. That said, the amount of foreclosures placed up for auction actually decreased a modest 8.7 percent since last year. Pre-foreclosures, on the other hand, increased, and now make up about 39.5 percent of all Pittsburgh’s distressed property pool. The banks that repossessed them are holding the remaining 19.5 percent. Each of these scenarios offers ample opportunities for Pittsburgh real estate investing. The overwhelming majority of the properties in foreclosure have three bedrooms.
If the amount of distressed properties in Pittsburgh isn’t enticing enough, the discount they offer should attract investors from across the county. The median sales price of a non-distressed home was $ 114,000. The median sales price of a foreclosure home was $ 32,663, or 71 percent lower than non-distressed home sales. That is a savings of more than $ 80,000 per home.
Unemployment in the Pittsburgh housing market is 5.2 percent, just a shade under the state of Pennsylvania’s. In fact, Pittsburgh’s unemployment rate is below the national average too. The local job sector is actually a big reason why the real estate market is doing so well.
Approximately 41.2 percent of all the properties in Pittsburgh are owned. An additional 45.1 percent are all rented, while the remaining 13.7 percent sit vacant for the time being.
When it comes down to it, the Pittsburgh housing market is steadily improving. Unlike most markets across the country, Pittsburgh has a modest supply of housing inventory. This, in addition to improving economic conditions, has made it easier for prospective buyers to obtain mortgages.
“On average, more people are employed and making more money than they were at this time last year,” said Tom Hosack, president of the West Penn Multi-List, and president and CEO of Northwood Realty Services in McCandless.
“Employment drives homebuying activity, so it is critical to watch labor statistics as a key indicator for the residential market,” Mr. Hosack said. “Coupled with the mostly positive jobs picture, it is widely expected that mortgage rates will remain as they are for at least the first two quarters of the year.”
Pittsburgh Housing Market Summary:
- Median Sales Price: $ 114,000
- 1-Year Increase In Sales: 6.2%
- Population: 308,003
- Unemployment: 5.2%
- Median Household Income: $ 36,019