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CP Photo Illustration: Abbie Adams
The coronavirus pandemic has done some unusual things to housing markets across the country. In cities with high rents like San Francisco and New York, rental rates have dropped significantly, apparently due to affluent renters moving out of the city to live or buy houses in more remote areas as they now work remotely.
At the same time, many home markets are booming. Property prices in urban markets across the country rose 15% from November 2020 to January 2021, according to brokerage firm Redfin. That increase is slightly ahead of the suburban real estate buying markets in America. Former renters could be encouraged by the pandemic and low interest rates to finally buy a home, even if it means staying in town.
Where does Pittsburgh stand in this pandemic real estate market?
Pittsburgh rents fell by an average of 5.7% in January 2021 compared to January 2020 rents, according to a report from apartment hunt site Apartment List. This is still well below the rate of rent decline in high-priced cities like Washington, DC and San Francisco, which fell by 27% year-on-year. Pittsburgh’s rent decline, however, is faster than comparable Rust Belt towns, many of which actually saw declines in rent increases year over year.
This does not mean that Pittsburgh is now cheaper compared to other cities in the Rust Belt, as the average rental for a one-bedroom unit in January 2021 is $ 846, making it among the most expensive when compared to cities like St. Louis, Cincinnati, heard. or Detroit, according to Apartment List.
On the flip side, real estate demand in Pittsburgh has increased over the past year, according to local RE / MAX real estate agent Tim Gyves.
“This summer has been extremely competitive for people,” says Gyves, who saw a noticeable surge in business following the lifting of COVID-19 restrictions on real estate agents. “I had customers who were outbid for a number of houses by three to four other people in a row. … Last year was the busiest year I’ve ever had, which is weird, but I think a lot of other agents would say the same thing. ”
The decline in rental prices and the surge in the home purchase market could lead to behavioral changes for Pittsburgh residents and newcomers. Gyves believes the market is showing signs that regional leaders have had predictions and / or wishes for some time: Pittsburgh’s relatively cheap property prices keep people in Pittsburgh and attract others from outside the region.
“There will never be apples for apples,” says Gyves as he compares Pittsburgh with other cities. “With our tech center, we have a whole range of industry crossover options. You get people moving where people can do the same job as in these other cities. It makes sense that they should buy. You never stood a chance [Silicon Valley], but here they could. ”
Whether this trend will continue is uncertain, but at the moment the pandemic appears to be contributing.
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CP Photo: Jared Wickerham
According to a recent Bloomberg article, Pittsburgh may see some demand for its neighborhoods that include amenities that are attractive to city dwellers. Property prices in the city of Pittsburgh have risen about 20% since last year, and currently averages $ 202,000, according to Redfin. And the city’s housing market is even more competitive than traditionally popular suburbs and suburbs like the mountain. Lebanon and Murrysville.
“Buyers in town need to be ready to leave – they can’t pause,” Howard Hanna Real Estate Services’ Kelly Hanna Riley told Bloomberg in February. “You need to know that they may be above the price.”
In Pittsburgh, Gyves has seen a mix of shoppers interested in the suburbs and the city, with an emphasis on suburbs that offer a mix of suburban and urban amenities, like cafes and restaurants within walking distance for the distance Residents. Redfin’s real estate market index ranks suburbs like Dormont and Bellevue among the most competitive real estate markets in the region.
Gyves believes the increased demand in suburbs and neighborhoods is a mix of a pandemic and historically low interest rates. Both of them are a lot of tenants who are either looking for a bit more quarantine space or people who are finally ready to venture into home buying because they know they can get a relatively good deal with low mortgage rates . According to real estate website Point2, Pittsburgh’s mortgage share of income is 11%, which is relatively low compared to other cities.
“Some people want space, be it because of children or someone who works from home. You may need more space, ”says Gyves. “Some people are moving here and shopping around town to take advantage of amenities that will be available again after the pandemic ends.”
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CP Photo: Jared Wickerham
Homes in Brookline
But this hot real estate market has consequences. Gyves said property prices in some Pittsburgh neighborhoods are rising rapidly and becoming out of reach for some home buyers.
Tenants are also affected. Before rents in Pittsburgh fell in 2020, rents rose significantly by 4.3% in 2019, according to Apartment List. This surge may have pushed those with the funds to buy homes to lower rent in the short term. Rental supply is increasing temporarily, but those without funds are facing increased rent in popular areas. These forces contribute to gentrification in some neighborhoods, pushing some lower-income residents out of desirable urban areas.
In the end, Gyves said, Pittsburgh’s real estate market had a very interesting year amid the pandemic, but cautioned against assuming these trends are set in stone.
“It’s hard to say if this is a permanent shift as everyone is adjusting to the pandemic,” says Gyves. “There’s still a mix of pent-up demand, people moving here and people interested in staying, but still some longtime natives who may not want to sell their home due to the uncertainty associated with the pandemic.
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