Introduction To Pittsburgh Real Estate Market
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. 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 the Nationwide’s 2015 Health of Housing Market Report. It is home to approximately 90 diverse and eclectic neighborhoods and many of them offer the convenient access to downtown and urban amenities. In this article we’ll be looking at the top ten reasons to invest in the Pittsburgh housing market. We’ll also figure out how is the robust housing market in Pittsburgh shaping up in 2019 for real estate investors as well as home buyers.
Pittsburgh Real Estate Market Forecast 2019
On Zillow, the median home value in Pittsburgh is $150,700. Pittsburgh home values have gone up 13.4% over the past year and the Pittsburgh real estate market prediction is that they will rise 9.5% in 2019. The median list price per square foot in Pittsburgh is $133, which is higher than the Pittsburgh Metro average of $117. The median price of homes currently listed in Pittsburgh is $200,000 while the median price of homes that sold is $149,800. The median rent price in Pittsburgh is $1,350, which is higher than the Pittsburgh Metro median of $1,200.
Pittsburgh Real Estate Market Trends
Pittsburgh real estate market trends indicate an increase of $12,500 (8%) in median home sales and a 0% rise in median rent per month over the past year. The average price per square foot for this same period rose to $121, up from $112. Trulia has 1,720 resale and new homes in Pittsburgh lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Pittsburgh for Oct 24 to Jan 23 was $167,500 based on 635 home sales. Average price per square foot for Pittsburgh was $121, an increase of 8% compared to the same period last year. The median rent per month for apartments in Pittsburgh for Dec 24 to Jan 24 was $1,300.
As per the real estate company named Redfin, the Pittsburgh real estate market is somewhat competitive. Homes in Pittsburgh receive 1 offer on average and sell in around 69 days. The average sale price of a home in Pittsburgh was $160K last month, up 17.2% since last year. The average sale price per square foot in Pittsburgh is $111, up 11.0% since last year. Homes for sale in the Pittsburgh housing market typically receive 1 offer. Homes sell for about 4% below list price and go pending in around 69 days. Hot Homes for sale in Pittsburgh, PA can sell for around list price and go pending in around 44 days.
Pittsburgh Housing Market Summary
- Median Sales Price: $167,500 (On Trulia)
- Price Per Sqft: $121
- Median Rent Per Month: $1,300
- Median Household Income: $46,250
- Home Owners: 64%
- Single Residents: 43%
- Median Age: 41
- College Educated: 40%
There are 3,239 homes for sale, ranging from $1K to $6.9M on Realtor.com. 149 of which were newly listed within the last week. Additionally, there are 1,305 rentals, with a range of – to $899K per month. There are 129 neighborhoods in Pittsburgh. Shadyside has a median listing price of $472K, making it the most expensive neighborhood. Carrick is the most affordable neighborhood, with a median listing price of $91.2K on Realtor.com.
In December 2018, the median list price of homes in Pittsburgh, PA was $169.9K, trending up 4.6% year-over-year. The median listing price per square foot was $50. The median sale price was $170K. Homes in Pittsburgh, PA sold for 2.79% below asking price on average in December 2018. On average, homes in Pittsburgh, PA sell after 73 days on the market. The trend for median days on market in Pittsburgh, PA is flat since last month, and flat since last year.
The median list price in Pittsburgh is $199,900 on Movoto.com. The median list price in Pittsburgh was less than 1% change from January to February. Pittsburgh’s home resale inventories is 1,617, which increased 0 percent since January 2019. For upcoming updates you can check visit their website.
As per the data from the real estate company called Neigborhoodscout.com, single-family detached homes are the single most common housing type in Pittsburgh, accounting for 44.06% of the city’s housing units. Other types of housing that are prevalent in Pittsburgh include large apartment complexes or high rise apartments ( 23.40%), duplexes, homes converted to apartments or other small apartment buildings ( 16.45%), and a few row houses and other attached homes ( 15.81%). People in Pittsburgh primarily live in small (one, two or no bedroom) single-family detached homes. Pittsburgh has a mixture of owner-occupied and renter-occupied housing.
Pittsburgh Foreclosures And Bank Owned Properties
Foreclosures will be a factor impacting home values in the next several years. In Pittsburgh 3.4 homes are foreclosed (per 10,000). This is lower than the Pittsburgh Metro value of 3.5 and also greater than the national value of 1.2. Mortgage delinquency is the first step in the foreclosure process. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Pittsburgh homeowners underwater on their mortgage is 8.4%, which is lower than Pittsburgh Metro at 8.6%.
On RealtyTrac, there are currently 1,427 properties in Pittsburgh, PA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 910. In December, the number of properties that received a foreclosure filing in Pittsburgh, PA was 17% lower than the previous month and 22% lower than the same time last year. Home sales for November 2018 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home was $0. The median sales price of a foreclosure home in Pittsburgh was $0, or 0% higher than non-distressed home sales.
Pittsburgh Home Prices And Appreciation Rates
Pittsburgh real estate appreciated 50.39% over the last ten years, which is an average annual home appreciation rate of 4.16%, putting Pittsburgh in the top 10% nationally for real estate appreciation. If you are a home buyer or real estate investor, Pittsburgh definitely has a track record of being one of the best long term real estate investments in America through the last ten years.
According to Neighborhoodscout’s data, appreciation rates are so strong in Pittsburgh that despite a nationwide downturn in the housing market, Pittsburgh real estate has continued to appreciate in value faster than most communities. Looking at just the latest twelve months, Pittsburgh appreciation rates continue to be some of the highest in America, at 8.00%, which is higher than appreciation rates in 82.49% of the cities and towns in the nation. Based on the last twelve months, short-term real estate investors have found good fortune in Pittsburgh. Pittsburgh appreciation rates in the latest quarter were at 3.49%, which equates to an annual appreciation rate of 14.72%.
10 Highest Appreciating Pittsburgh Neighborhoods Since 2000: By Neigborhoodscout.com
Should You Buy Pittsburgh Investment Properties For Cash Flow?
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. Here are the 10 best reasons to invest in the Pittsburgh real estate market.
1. 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.
2. 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.
3. 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 today is around $140,000 a year. You can buy several properties in the Pittsburgh real estate market for the price of a mid-market home in hotter markets. That’s even nearly half the national average. In some of the redeveloping neighborhoods, you can find two and three bedroom houses for less than a hundred thousand dollars.
4. Even Better Deals Are Available
About 10% of the homes in the Pittsburgh real estate market are “underwater”, where home owners 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 home buyers in the Pittsburgh housing market, and foreclosures are frequent.
5. You Won’t Face Much Competition when Buying
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. This explains why appreciation for 2019 could hit 10%.
6. Property Values Are Slowly and Steadily Rising
Unlike many “Rust Belt” cities, the transformation of Pittsburgh as large companies relocate here is causing housing prices to slowly rise. Last year, median home prices rose about 6% last year. The relatively high rent may seem like it would push people to buy homes, but only half of residents own their home. Their pent up demand could keep housing prices going strong for years to come.
House flippers have to hunt for properties with massive potential price increases because they’ve renovated so many homes; that explains why Pittsburgh was listed the best city for house flippers in 2015. Yet their work has contributed to the steady rise in property values across the city, turning abandoned mansions and row homes into valuable properties.
Pittsburgh has been recognized as one of only four metropolitan areas out of 200 studied by economists at Realtor.com currently sustaining an optimal balance between supply and demand. This means that it’s simultaneously a good market for both buyers and sellers, as there is no dearth of affordable properties available on the market and values are steadily increasing.
7. The Luxury Market Is Taking Off
Catering to the new tech sector and reinvented downtown, luxury apartments and condos are popping up in Pittsburgh. The Urban Redevelopment Authority has approved several new luxury apartment and condo projects in addition to several that have already been built.
8. The Student Market Is Strong
Pittsburgh is a centuries old city, so it is home to many colleges and universities. Carnegie Mellon University, Duquesne University and Point Park University are all located here, and each is home to several thousand students. Smaller schools like Vet Tech Institute and Dean Institute of Technology abound. The biggest is 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.
9. 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.
10. 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 nearly 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 taxes. 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 Philadelphia 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.
Pittsburgh Real Estate Investment: Summary
If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Pittsburgh, PA. 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.
Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments.
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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.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you can fill up the form given here. One of our investment specialists will get in touch with you.
*Remember, caveat emptor still applies when buying a property anywhere. 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, the 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
Real estate prices
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://smartasset.com/mortgage/the-cost-of-living-in-pittsburgh
https://reason.com/blog/2018/09/18/philadelphia-will-dismantle-its-asset-fo
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.realtytrac.com/statsandtrends/foreclosuretrends/pa/allegheny-county/pittsburgh https://www.neighborhoodscout.com/pa/pittsburgh/real-estate https://www.movoto.com/pittsburgh-pa/market-trends https://www.movoto.com/guide/pittsburgh-pa/pittsburgh-real-estate-market-trends https://www.redfin.com/city/15702/PA/Pittsburgh/housing-market https://www.trulia.com/real_estate/Pittsburgh-Pennsylvania/market-trends https://www.realtor.com/realestateandhomes-search/Pittsburgh_PA/overview
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