We will discuss the latest Pittsburgh housing market trends and find out how they can affect investors and homebuyers in 2022. We shall mainly discuss median home prices, inventory, and appreciation, which will help you understand the way the local real estate market moves in this region. Pittsburgh's hot housing market appears to be cooling down for the holiday season, owing to the customary cooling-off period.
Pittsburgh sits where the Allegheny and Monongahela rivers meet and form the Ohio River. That location gave it access to the ocean and the interior, while nearby iron deposits fueled its growth. If you are a home buyer who’s looking for a new place to call home or a savvy real estate investor who is looking for a strong ROI, then you should consider all that Pittsburgh real estate market has to offer. Pittsburgh is a moderately walkable city in Allegheny County having a population of approximately 302,000, with a metro area that has a population of 2.37 million.
The real estate appreciation rate in Pittsburgh in the latest quarter was around 4.73% which equates to an annual appreciation rate of 20.32%. Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers in Pittsburgh, a nice profit is on the horizon in 2022. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Pittsburgh market can tip to favor buyers if the supply increases to more than six months of inventory.
However, looking at the current trends, we don’t see things stopping moving in that direction. The housing inventory is declining. The demand will outpace the supply in Pittsburgh to give sellers an upper hand in price negotiations. In fact, the Pittsburgh housing market has seen the fewest number of homes actively listed for sale last year. The shortage of houses available for sale in Pittsburgh has led to higher demand and rising prices, especially in moderate-income neighborhoods.
According to Realtor.com, in January 2022, Pittsburgh was a buyer's market. The median listing home price in Pittsburgh, PA was $225K, trending flat year-over-year. The median listing home price per square foot was $154. The median home sold price was $225K. Homes in Pittsburgh, PA sold for 1.19% below the asking price on average in January. Sheraden is the most affordable neighborhood in Pittsburgh, with a median listing home price of $108K.
- Pittsburgh is the county seat of Allegheny County.
- Countywide, the median list price of homes for sale was $215K in January 2022, trending flat year-over-year.
- The median listing home price per square foot was $148.
- The median home sold price in Allegheny County was $219,900.
- According to housing stats, as seen last month, Allegheny County is currently a buyer's market which means that the supply of homes is greater than the demand for homes.
- These figures come as no surprise to local real estate veterans, who note that this region's real estate prices and sales activity typically decline during the off-season.
- On average, homes in Allegheny County, PA sell after 62 days on the market.
- The trend for median days on market in Allegheny County, PA has gone up since last month, and slightly down since last year.
- There are 150 cities in Allegheny County.
- Sewickley has a median listing home price of $485K, making it the most expensive city.
- West Mifflin is the most affordable city, with a median listing home price of $150K.
Data by Redfin, a Seattle-based real estate brokerage, show that in January 2022, Pittsburgh home prices were up 4.9% compared to last year, selling for a median price of $215K. On average, homes in Pittsburgh sell after 66 days on the market compared to 71 days last year. There were 549 homes sold in January this year, up from 535 last year. It considers the Pittsburgh housing market to only be somewhat competitive.
- Homes for sale in Pittsburgh have a median listing price of $225,000
- Median Sales Price: $215,000 (+4.9% since last year)
- 27.7 percent of homes sold above the list price (+2.3% since last year)
- 13.6 percent of homes were sold with price drops (-1.4% since last year)
- Sale-to-List-Price Ratio = 97.4%
Pittsburgh Real Estate Market Forecast 2022 – 2023
Pittsburgh has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. What are the Pittsburgh real estate market predictions for 2022 to 2023? Let us look at the price trends recorded by Zillow over the past few years. Since Mar 2012, the median home prices in Pittsburgh have appreciated by roughly 104% from $111,000 to $226,443, according to ZHVI. In the last twelve months, Pittsburgh home value has risen by 13% and will continue to rise in 2022.
- The typical home value of homes in Pittsburgh Metro is $203,384.
- Pittsburgh Metro home values have gone up 13.5% over the past year and Zillow predicts they will rise 16.3% in the next year.
- Allegheny County home values have gone up 13.3% over the past year (current value = $217,075) and will continue to rise in 2022.
- Pennsylvania home values (statewide) have gone up 14.6% over the past year and will continue to rise in 2022.
Here is the Pittsburgh real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 16.3% till Jan 2023.
Pittsburgh Real Estate Investment Overview 2022
Now that you know where Pittsburgh is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Pittsburgh a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Pittsburgh is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2022.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Pittsburgh real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Pittsburgh that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Pittsburgh real estate market which can help investors who are keen to buy an investment property in this city. Pittsburgh, Pennsylvania is home to around 300,000 people. However, the Pittsburgh real estate market is much larger than this. The entire metro area is home to over two million people. Pittsburgh ranked at the top of Nationwide’s 2015 Health of Housing Market Report. It is home to approximately 90 diverse and eclectic neighborhoods and many of them offer convenient access to downtown and urban amenities.
The overall stability of Pittsburgh’s economic outlook has contributed significantly to the gains seen in the real estate market. This can be seen in two distinct areas, employment rates, and median household income. Several neighborhoods in Pittsburgh are seeing an influx of growth that is spurring new construction and contributing to retail growth. Pittsburgh has also been recognized as one of only four metropolitan areas out of 200 studied by economists at Realtor.com.
What Makes Pittsburgh Real Estate Market Attractive For Investment? |
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It Is Landlord Friendly
The Pittsburgh real estate market can be considered landlord-friendly. There are rules regarding security deposits, and depending on the situation, you may have to pay rent on the security deposit. On the upside, there is no limit on late fees and they don’t have to be written into the rental agreement, though this is recommended. You don’t have to give notice before entering. The state, at least, doesn’t require a rental license to become a landlord. Pittsburgh has passed a rental registration regulation, but it is being challenged in the courts.
The Strong Local Economy Attracts Residents
The unemployment rate for Pittsburgh is around 5%. The unemployment rate for Pittsburgh parallels that for the state of Pennsylvania. Employment growth is growing broadly, with seven of the ten major industries seeing job gains. Notably, the unemployment rate for the Pittsburgh real estate market is somewhat better than that in Fayette County and Armstrong County. The Pittsburgh real estate market is seeing a surprising renaissance because it is reinventing itself as a high-tech hub.
The CBRE listed it as the third market in the U.S. for high-tech job growth. That same tech boom is radically altering the commercial real estate market. With many industries adding more jobs every month, which consists of manufacturing, leisure, technology, and health care, Pittsburgh’s economic prosperity will continue to foster a thriving housing market. Google, Apple Inc., Bosch, Facebook, Uber, Nokia, Autodesk, Amazon, Microsoft, and IBM are among 1,600 technology firms generating $20.7 billion in annual Pittsburgh payrolls.
Real Estate Investment In Pittsburgh Is Still Affordable
Pittsburgh is a growing city with a changing real estate market, but it’s still affordable enough to please any savvy home buyer and investor. There are plenty of great homes available for reasonable prices, making the Pittsburgh real estate market one of the most desirable in the US. The median home price is around $165,000. That’s is well below the national average. You can buy several properties in the Pittsburgh real estate market for the price of one home is in expensive markets like Seattle or LA. In some of the redeveloping neighborhoods, you can find two and three-bedroom houses for less than a hundred thousand dollars.
About 10% of the homes in the Pittsburgh real estate market are “underwater”, where homeowners owe more than the home is worth. This situation is also called negative equity. This rate of underwater homes is an improvement from the nearly one in five properties that were underwater in 2011. However, it is still twice the rate seen in a normal housing market. This means that there are many distressed homebuyers in the Pittsburgh housing market, and foreclosures are frequent.
Despite rents that are somewhat high given the average income in the area and relatively affordable real estate, the Pittsburgh real estate market is one of the least competitive markets in the country for buyers. If you have good credit or are buying cash, you can snap up deals without the property being bid up. The low average wage compared to property values prevents many buyers from snapping up local properties. The only exception is in areas where houses prices are a little higher than the median average; the well-paid tech workers are bidding up homes on the “cheap” end of the luxury market.
The Large Pittsburgh Rental Real Estate Market
Pittsburgh is a centuries-old city, so it is home to many colleges and universities. The area is home to 68 colleges and universities, including research and development leaders Carnegie Mellon University and the University of Pittsburgh. Each is home to several thousand students. Smaller schools like Vet Tech Institute and Dean Institute of Technology abound. The biggest is the University of Pittsburgh with almost 30,000 students, and it is growing. Pittsburgh State University is attracting so many students that the city approved a new mixed-use development near Fourth and Broadway Streets to cater to them.
As of March 02, 2022, the average rent for a 1-bedroom apartment in Pittsburgh, PA is currently $1,195. This is a 9% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Pittsburgh increased by 3% to $1,000. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment increased by 1% to $1,450.
- Two-bedroom apartments in Pittsburgh rent for $1,450 a month on average (a 12% increase from last year).
- Three-bedroom apartment rents average $1,650 (a 3% increase from last year).
- Four-bedroom apartment rents average $1,995 (a 5% increase from last year).
The Yields Are Excellent
Huffington Post gave Pittsburgh the seventh slot on the top ten places to be a landlord. They used the average three-bedroom rent of $991 a month and median home price of $105,700 to get a gross rental yield of 11.3%. The highest-grossing rental market was 15.3%, but it is rare for cities to achieve that rate, much less sustain it.
Taxes Aren’t Bad in Comparison
The property tax for Allegheny County, the county Pittsburgh is in, has an effective rate of 2.16%. That’s higher than the Pennsylvania state average. It is near twice the national average of 1.15%. The income tax is 3% for those that live in the city; 1% is a wage tax, 2% is a school tax. Yet this is a real bargain compared to Philadelphia; they have the highest average metro property tax bill of around $5000 a year. An average home in the Pittsburgh real estate market will cost you more like $3000 a year.
Another reason to invest in Pittsburgh over Philadelphia is that latter has a history of being too aggressive seizing property under asset forfeiture and then reselling it. While that presented a few deals to potential buyers, no one wants to worry about losing their home or rental property because a kid living there dealt drugs. The expensive deal Philadelphia had to agree to in order to compensate those whose homes were wrongfully taken will only add to the population’s tax bill in the future.
Maybe you have done a bit of real estate investing in Pittsburgh, PA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Pittsburgh is seeing an incredible renaissance, unlike many other Rust Belt cities. It is attracting new residents, redeveloping its downtown.
And it is an excellent place to invest in real estate while it is still in the early stages of its rebound. A good cash flow from Pittsburgh rental property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Pittsburgh real estate investment opportunity would be key to your success.
Apart from the Pittsburgh real estate market, you can also invest in Columbus, Ohio. The Columbus Ohio real estate market is a bright spot in a declining region. It mixes smart redevelopment, quality of life, and growth to create a stable, slow-growing market that will be thriving well into the foreseeable future. There are many neighborhoods to consider for buying properties in Columbus.
Properties in Worthington and downtown Columbus have higher than average median home prices, and their relatively low crime rates add additional appeal. Places like Victorian Village, where home prices remain higher than many other places in the city, support a strong local market, and they can signify a lower level of risk.
Another market that we suggest is the housing market in Jersey City, NJ. The Jersey City real estate market is seeing significant growth because it is close to New York City but isn’t NYC. It has a number of points in its favor, too, like a good job market and local amenities. Renters and buyers alike are taking notice and helping to make Jersey City the fastest-growing metropolitan area in the state.
Jersey City has been busy redeveloping old neighborhoods, encouraging a mix of new retail, luxury housing, and affordable housing. Jersey City is notable for the major redevelopment on the waterfront, known as the Shore, while properties there enjoy a great view of Manhattan. Jersey City takes things one step further and is setting up a “Friendly Building Program”, where developers build entire buildings where renting through AirBnB is allowed. This is an innovative development in the Jersey City housing market.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of the investment counselors who can help build you a custom portfolio of turnkey cash-flow rental properties in the various growth markets across the United States.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Pittsburgh real estate in 2020. Purchasing an investment property requires a lot of study, planning, and budgeting. Not all deals are solid investments. We always recommend doing your own research and taking the help of a real estate investment counselor. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
- Yields
https://www.huffpost.com/entry/best-places-become-landlords_n_5585761 - Overview stats
https://realestate.usnews.com/places/pennsylvania/pittsburgh - Property values rising
https://smartasset.com/mortgage/the-cost-of-living-in-pittsburgh
https://newsinteractive.post-gazette.com/blog/pittsburgh-area-housing-market-continues-strong-performance - Taxes
https://reason.com/blog/2018/09/18/philadelphia-will-dismantle-its-asset-for - Landlord friendly
https://www.avail.co/education/laws/pennsylvania-landlord-tenant-law - Jobs / employment
https://www.clevelandfed.org/newsroom-and-events/publications/metro-mix/pittsburgh/mm-201805-pittsburgh.aspx - High Tech jobs
https://www.cbre.us/about/media-center/pittsburgh-number-3-market-in-north-america-for-hi-tech-job-growth
https://www.geekwire.com/2018/ready-not-tech-boom-brings-complex-changes-pittsburghs-real-estate-market/ - Deals are available
https://triblive.com/business/headlines/8553718-74/percent-market-homeowners - Not competitive
https://www.mashvisor.com/blog/pittsburgh-real-estate-market-2019/ - Luxury Market
https://oxforddevelopment.com/oxford-enters-luxury-apartments-market-in-pittsburgh-1st-project-bicycle-friendly-hot-metal-flats/ - The Student Market
https://www.joplinglobe.com/news/local_news/pittsburg-eyes-million-downtown-redevelopment-project/article_0c893a7c-f309-5e8e-90cc-af2b1bce46ca.html
https://www.collegesimply.com/colleges-near/pennsylvania/pittsburgh/ - Rental permit laws
https://www.wesa.fm/post/landlords-oppose-mandatory-registration-inspection-city-council-hearing - Market Data, Trends And Forecast
https://www.zillow.com/Pittsburgh-pa/home-values
https://www.movoto.com/guide/pittsburgh-pa/pittsburgh-real-estate-market-trends
https://www.realtor.com/realestateandhomes-search/Pittsburgh_PA/overview
