Mirroring most of the country, the real estate market has boomed in Pittsburgh, Pennsylvania for the past few years. And even in recent times of economic uncertainty, Pittsburgh’s real estate continues to shine.
First things first: the demand is still there, especially when it comes to rental property investing. Competition is down a bit, making it easier for buyers to be confident in their Pittsburgh buy-in.
And it’s not just rentals that are still hot. According to local agents, prices in many of the city’s best neighborhoods are still high. And, most importantly, they are selling.
What’s driving the Pittsburgh real estate market and what will 2023 bring? Reed Pirain discusses the forecast for the venerable Steel City.
The Stats Behind the Sales
Pittsburgh has a lot going for it, but primarily population growth is a major driver behind its steady real estate market. According to the most recent U.S. Census, Allegheny Country increased in population for the first time in six decades.
And while the population of Pittsburgh, the county’s largest city, saw its population slightly decline, after decades of drastic population loss, the number of residents has finally stabilized. There are now nearly 2.4 million people living in metropolitan Pittsburgh and over 300,000 within the city.
What’s driving the good population news? A changing job market. Technology companies such as Apple and Google now have headquarters in the city. It’s no longer a manufacturing-based economy.
It is a rapidly diversifying one that includes more hospitality and business services. That is a major contributor to a 24% rise in income for city residents since 2000.
Also, another big factor in the hot Pittsburgh real estate market: the cost of living in the city is a big 13% lower than the national average, even with the demand for employees booming.
The Real Estate Market Now
While the value of homes in Pittsburgh has increased nearly 15% compared to last year (and is up 63% from five years ago), the median prices are still very affordable.
Realtor.com reports that the median home listing in the city is $239,000 (and the median sale is $230,000). The most expensive neighborhood, Squirrel Hill North, sees a median list of $627,00, while Sheraden is the most affordable Pittsburgh neighborhood, with an average list price of $130,000. Rental prices in the city have also increased nearly 7% year-over-year.
Predictions for Pittsburgh Real Estate in 2023
A look at what real estate experts expect for the coming year:
• Demand is expected to outpace the real estate supply. That means prices will likely still rise, though at a likely more moderate rate because of predicted higher interest rates.
• How high will prices go next year? The average home price is estimated to increase by over 8.3% through 2023.
• Mortgage applications will continue to fall because interest rates and home values have both risen.
• Investors will still see Pittsburgh favorably. The city has an above-average foreclosure distribution, with more than 1,100 foreclosures available on average. That’s an attractive number for investors and real estate flippers. And while home prices will continue to increase, many investors will shift toward investing in longer-term strategies, including rentals.