Pittsburgh is a thriving city located in western Pennsylvania with a population of over 300,000 people. The city has a rich history and culture, with a booming economy that attracts people from all over the world. One of the most significant aspects of Pittsburgh's growth is its real estate market. In this blog post, we will discuss the current state of the Pittsburgh housing market, including house prices, trends, and migration patterns.
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.
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Pittsburgh Housing Market Overview
According to Redfin, the Pittsburgh housing market is somewhat competitive, with homes receiving three offers on average and selling in around 61 days. The median sale price of a home in Pittsburgh was $217,000 last month, which is down 8.1% since last year. The median sale price per square foot in Pittsburgh is $162, which is also down 6.1% since last year.
Pittsburgh's median sale price is 40% lower than the national average, making it an attractive option for homebuyers. The overall cost of living in Pittsburgh is 0% higher than the national average, which is a significant factor in attracting people to the city. Additionally, the Redfin Compete Score rates Pittsburgh as somewhat competitive, with some homes receiving multiple offers. On average, homes in Pittsburgh sell for about 3% below the list price and go pending in around 61 days. Hot homes can sell for about 2% above list price and go pending in around 35 days.
Sale-to-List Price
The sale-to-list price ratio is an essential indicator of the housing market's health, representing the final sale price of a home relative to its list price. In Pittsburgh, the sale-to-list price ratio for all home types was 96.4% in 2021. In 2022 and 2023, it decreased to 80.0% and 90.0%, respectively. This decrease can be attributed to the current state of the housing market, which is experiencing a decrease in median home prices.
Migration & Relocation Trends
Across the nation, 0.49% of homebuyers searched to move into Pittsburgh from outside metros. New York homebuyers searched to move into Pittsburgh more than any other metro followed by Washington and Los Angeles. Additionally, 79% of Pittsburgh homebuyers searched to stay within the Pittsburgh metropolitan area. Birmingham was the most popular destination among Pittsburgh homebuyers followed by Myrtle Beach and Sarasota.
When it comes to outbound migration, Birmingham, AL, was the most popular destination for Pittsburgh homebuyers, followed by Myrtle Beach, SC, and Sarasota, FL. This data is based on a sample of about two million Redfin.com users who searched for homes across more than 100 metro areas, reflecting the migration patterns of homebuyers in recent years.
In summary, the Pittsburgh housing market is experiencing a slight decline in median home prices, making it a somewhat competitive market for homebuyers. Despite the slight decline in median home prices, Pittsburgh's real estate market remains attractive due to the city's lower cost of living and a strong economy. Additionally, Pittsburgh homebuyers searched to move into the city more than any other metro area, reflecting the city's growth and potential for real estate investment.
Is Pittsburgh a Seller's Housing Market?
The following Pittsburgh housing market trends are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. Based on the current housing market trends and data, it can be concluded that Pittsburgh, PA is a buyer's market in April 2023. This means that the supply of homes for sale is higher than the demand for homes. The median listing home price in Pittsburgh, PA is $248K, which has increased by 3.4% year-over-year.
The median listing home price per square foot is $166. The median home sold price is $242.4K. One important indicator of a seller's market is the sale-to-list price ratio, which represents the percentage of the asking price that homes actually sell for. In Pittsburgh, PA, the sale-to-list price ratio is 100%, which means that homes sold for approximately the asking price on average in April 2023. This indicates that sellers are not able to command a premium for their homes and that buyers have more negotiating power.
On average, homes in Pittsburgh, PA sell after 53 days on the market. This trend for the median days on the market has gone down since last month, but slightly up since last year. The longer homes stay on the market, the more likely it is that the market is favoring buyers. In a balanced market, the total sales to total listings ratio is between 0.12 and 0.2. Markets with a ratio above 0.2 tend to favor sellers, while markets with a ratio below 0.12 tend to favor buyers.
Finally, there are 79 neighborhoods in Pittsburgh, with Squirrel Hill North being the most expensive neighborhood, with a median listing home price of $749K, while Sheraden is the most affordable neighborhood, with a median listing home price of $127.5K. Overall, based on the current data, Pittsburgh, PA is a buyer's market, which means that buyers have the advantage in negotiating home prices.
Pittsburgh Housing Market Forecast 2023-2024
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 2023 to 2024? Let us look at the price trends recorded by Zillow over the past few years.
According to Zillow data, the Pittsburgh housing market is expected to experience a slight decline in the coming year. The average home value in Pittsburgh is currently $219,162, which is up by 1.0% over the past year. On average, homes in Pittsburgh go to pending in around 15 days, indicating a relatively competitive market.
In terms of key takeaways, the median sale-to-list ratio in Pittsburgh was 0.977 as of February 28, 2023. Furthermore, 20.9% of sales went over the list price, while 61.7% of sales went under the list price as of the same date. Finally, the median time to pending was 15 days as of March 31, 2023.
Looking ahead, Zillow's forecast for the Pittsburgh MSA (metropolitan statistical area) suggests a slight decline over the next year. The forecast indicates that the region may experience a -0.2% decline in home values by the end of April 2023, followed by a -0.9% decline by the end of June 2023, and a -1.2% decline by the end of March 2024. While this may seem concerning for some homeowners, it is important to note that these are just predictions based on current trends, and the actual market performance may vary.
Pittsburgh Real Estate Investment Overview
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.
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 of 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 $217,000. That is well below the national average. You can buy several properties in the Pittsburgh real estate market for the price of one home 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.
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 May 2023, the average rent for a 1-bedroom apartment in Pittsburgh, PA is currently $1,250. This is a 5% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Pittsburgh increased by 3% to $1,135. The average rent for a 1-bedroom apartment increased by 1% to $1,250, and the average rent for a 2-bedroom apartment increased by 3% to $1,550.
- Two-bedroom apartments in Pittsburgh rent for $1,550 a month on average (a 6% increase from last year).
- Three-bedroom apartment rents average $1,750 (a 3% increase from last year).
- Four-bedroom apartment rents average $1,995 (a 1% increase from last year).
Another reason to invest in Pittsburgh over Philadelphia is that the latter has a history of being too aggressive in 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
- https://www.redfin.com/city/15702/PA/Pittsburgh/housing-market
- https://www.zillow.com/Pittsburgh-pa/home-values
- https://www.realtor.com/realestateandhomes-search/Pittsburgh_PA/overview
- https://www.avail.co/education/laws/pennsylvania-landlord-tenant-law
- https://www.clevelandfed.org/newsroom-and-events/publications/metro-mix/pittsburgh/mm-201805-pittsburgh.aspx
- 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/
