We will discuss the latest Pittsburgh housing market trends and find out how they can affect the investors and homebuyers in 2020. 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. 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
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 2020 for real estate investors as well as home buyers.
According to Realtor.com, the Pittsburgh housing market will see a -0.3% growth in sales and 1.3% in home prices in this year. The home prices are expected to flatten nationwide, increasing by just 0.8%, and buyers will continue to move to affordability, benefiting mid-sized markets.
The real estate appreciation rate in Pittsburgh in the latest quarter was around 2.8% which equates to an annual appreciation forecast of roughly between 11% to 12%. 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.
Let’s learn more about the factors that make Pittsburgh a good place to invest if you’re considering real estate investment. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Please note that there are many variables that can potentially impact the value of a home in Pittsburgh in 2020 (or any other market) and some of these variables are impossible to predict in advance.
What Makes Pittsburgh Real Estate Market Attractive For Investment?
Pittsburgh Real Estate Market Forecast 2020 – 2021
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 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Pittsburgh have appreciated by roughly 40.44% from $117,000 to $164,317, according to Zillow’s data.
In the last twelve months, the Pittsburgh real estate has appreciated by 5.1%. The latest Pittsburgh real estate market forecast is that the home prices will continue to increase by 4.4% – in the next twelve months.
The latest real estate data from Zillow shows that the current median home value in Pittsburgh is $164,317. This indicates that home prices in Pittsburgh are well below the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Pittsburgh.
Pittsburgh is currently a seller’s real estate market. This indicates that there are more real estate buyers in the Pittsburgh than there are sellers. When demand is higher than the supply, home prices increase, which benefits sellers. Zillow reports that 14.2% of the listings in Pittsburgh had a price cut in Jan 2020.
Here is the Pittsburgh real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 4.4% till Feb 2021.
Pittsburgh Housing Market Forecast 2021
Here is a short and crisp Pittsburgh housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Pittsburgh is 91% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Pittsburgh is 91% during this period. If this price forecast is correct, the Pittsburgh home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Pittsburgh Housing Market Forecast.
Pittsburgh Housing Market Trends – Prices, Inventory & Sales
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Pittsburgh area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
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 301,048, with a metro area that has a population of 2.36 million.
On average, homes in Pittsburgh sell after 91 days on the market. The trend for average days on market in Pittsburgh, PA has gone up since last month, and slightly up since last year as well. 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 saw the fewest number of homes actively listed for sale in the last four years, according to data released in Dec 2019 by West Penn Multi-List. The shortage of houses available for sale in Pittsburgh has led to higher demand and rising prices, especially in moderate-income neighborhoods.
Pittsburgh real estate market trends indicated an increase in the average sales price for homes in the region by nearly 5% — $199,821 in 2019 as compared to $190,326 in 2018. The inventory of homes for sale on the market is 30% to 50% below normal. This is mainly due to underproduction of new houses in relation to population and job growth.
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom single-family detached homes are the most common housing units in Pittsburgh. At the national level, the single family rental homes have grown up to 30% within the last three years.
Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Other types of housing that are prevalent in Pittsburgh include large apartment complexes, duplexes, row houses and homes converted to apartments.
Pittsburgh has a mixture of owner-occupied and renter-occupied housing units. Trulia has 2208 resale and new homes for sale in Pittsburgh, PA, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
Currently, there are 1296 homes for sale in Pittsburgh on Zillow, an online real estate database company. Additionally, there are 618 homes for rent. Under potential listings, there are about 11 Foreclosed and 499 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Pittsburgh is $144, which is higher than the Pittsburgh Metro average of $125.
- The median price of current listings is $224,900.
- The median price of homes that are sold out is $187,400.
- The median rent price in Pittsburgh is $1,450, which is higher than the Pittsburgh Metro median of $1,225.
There are currently 1631 homes for sale and 1166 homes for rent in Pittsburgh, PA on Realtor.com, a real estate listings website. According to their statistics, currently they cannot show the buyer and seller market type in Pittsburgh, PA. However, as per other real estate data companies, Pittsburgh is a hot seller’s market with a positive price appreciation forecast of next twelve months.
- In February 2020, the median list price of homes in Pittsburgh was $199,900, trending up 8.1% year-over-year.
- The median listing price per square foot was $142.
- The median rent price was $1,400.
The asking price of single family homes in Pittsburgh can start from $5,000 and can go up to $3.9M for a luxury property located in Point Breeze neighborhood. There are currently 38 newly listed homes and 96 new construction houses available for sale in the Pittsburgh housing market.
Squirrel Hill North has a median listing price of $722,000, making it the most expensive neighborhood in Pittsburgh. Sheraden is the most affordable neighborhood, with a median listing price of $58,000.
|Homes For Sale in Pittsburgh||1631|
|Homes For Rent in Pittsburgh||1166|
|Median Listing Price||$199,900|
|Median Sale Price||–|
|Sale to Asking Price Ratio||–|
|New Construction Houses||96|
|Median List Price/Sq Ft||$142|
|Home Price Range||$750 to $10M|
|Most Expensive Neighborhood||Squirrel Hill North|
|Most Affordable Neighborhood||Sheraden|
Pittsburgh, PA Foreclosures And Bank Owned Homes Statistics 2020
Looking for foreclosure homes in Pittsburgh? As per the Pittsburgh foreclosure data by Zillow, 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
The percent of delinquent mortgages in Pittsburgh is 1.1%, which is higher than the national value of 1.1%. The percent of Pittsburgh homeowners underwater on their mortgage is 8.4%, which is lower than Pittsburgh Metro at 8.6%.
There are currently 1,183 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 895. In February 2020, the number of properties that received a foreclosure filing in Pittsburgh, PA was 11% lower than the previous month and 1% lower than the same time last year.
|Potential Foreclosures in Pittsburgh||1183 (RealtyTrac)|
|Homes for Sale in Pittsburgh||895|
|Median List Price||$169,900 (0% rise vs Jan 2019)|
In Pittsburgh, the zip code with the highest foreclosure rate is 15235, where 1 in every 517 housing units is foreclosed. 15229 zip code has the lowest foreclosure rate, where 1 in every 1066 housing units becomes delinquent.
Is Pittsburgh a Good Place To Invest in Real Estate?
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 good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
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.
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. 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.
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 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 an 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.
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 Pittsburgh 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 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 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 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.
Investing in Pittsburgh Real Estate: Advice For New Buyers
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 a key to your success.
If you invest wisely in Pittsburgh real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. The less expensive the Pittsburgh investment property is, the lower your ongoing expenses will be.
When looking for real estate investment opportunities in Pittsburgh or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental.
That would be the ideal equation example. Even with rent increases, buying a $500,000 investment property in Pittsburgh is not going to get you $5000 per month on rent. When looking for the best real estate investments in Pittsburgh, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Pittsburgh.
Other Good Markets To Invest In Real Estate In 2020
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 Help You In Buying Your First Investment Property in Pittsburgh
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 area, 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 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 studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take 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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
- Overview stats
- Property values rising
- Landlord friendly
- Jobs / employment
- High Tech jobs
- Deals are available
- Not competitive
- Luxury Market
- The Student Market
- Rental permit laws
- Market Data, Trends And Forecast