Pittsburgh has hottest real estate markets domestic. who knows? according to redfin tunaFrom February 2023 to February 2024, Pittsburgh’s housing prices rose sharply by 22%, becoming the city with the fastest growing housing prices in the United States.
The city was formerly the heart of the Rust Belt and more recently reinvent yourself As a tech town, it welcomes major players like Google, Facebook, Amazon, Uber, Apple, and Microsoft. It’s not luck. The city’s Carnegie Mellon University has one of the most coveted computer science degrees in the country and has produced some of Silicon Valley’s top tech talent.
chronic housing shortage
However, if you want to invest in Pittsburgh, you may encounter difficulties. Part of the city’s problem is a chronic shortage of housing inventory.
Still, the average sales price of a home in Allegheny County in February was $275,000, well below the national median price of $412,227, according to local newspaper West Penn Multi-List. After the communiqué.
Scarcity of inventory has led to bidding wars and an overheated market, with 26% of homes selling for more than their listing price, a 2.7% increase from the previous year, according to Redfin data.
“I’ve been in this industry for more than 45 years, and I’ve seen sales prices in certain neighborhoods in the city of Pittsburgh now exceed So many suburban locations.
Pete’s tech giant makes big money
Two years ago, Google announced it would further invest in $15 million invested in Pennsylvania, a large portion of the funding to expand operations in Pittsburgh, where more than 800 Google employees already work. Additionally, the city’s small tech companies raised more than US$3 billion In terms of funding. Last year, they attracted 57 new investors, led by self-driving car startups Aurora and Stack AV, a 203% increase from 2022.
Downtown is a problem
But while downtown Pittsburgh’s shiny new tech hub has sent rents and home prices soaring, nearby more traditional office towers are facing the same post-pandemic headwinds as other downtowns across the U.S. amid increased remote work and homelessness Still vacant.
in worry 50% of offices could be vacant by 2028, it has been proposed to “save the city center” by converting office space into housing, thereby alleviating the inventory problem. However, this transition will not happen overnight, is costly, and still does little to alleviate economic hardship. Urban affordable housing and an increase in homelessness.
Pittsburgh still has cash flow
Despite rising home prices, the median home price is lower than other competitive markets. Cash flow is still possible If you can find a home.
It’s also worth remembering that the city of Pittsburgh is only a small portion of the greater metropolitan area, and is often included when people refer to the Pittsburgh market. These diverse cities are often much more affordable than trendy urban neighborhoods like Lawrenceville, Mexican War Row, and South Side Apartments, as well as the historic neighborhoods of Oakland, Squirrel Hill, Shadyside, and Mount Lebanon.
Population problems
Like many Northern cities, Pittsburgh was caught off guard by the pandemic and remote work; Recent census data Allegheny County’s population was shown to be declining dramatically, causing panic. However, losses may not tell the whole story.
The aging populations of Rust Belt cities like Pittsburgh mean a greater loss of residents than in many other areas. As the aftershocks of the pandemic recede, Pittsburgh’s generally affordable housing and charming brick homes in historic neighborhoods outside the city mean that compared to other major U.S. cities, Pittsburgh is an attractive place to live and invest, both financially and aesthetically. place. Census data confirms this Suburbs showing real growththere is no doubt that it is the driving force of housing prices.
More expensive cities are losing residents to Pittsburgh
According to Redfin, Pittsburgh is attracting more residents from other, higher-cost-of-living coastal cities than from the Sunbelt, primarily Florida. While Pittsburgh’s tech core is undoubtedly attractive; Survey conducted by Rocket Homes last year and appear in New York Times The report shows that Pittsburgh is one of the 10 best cities to buy a home on a budget, and most importantly, Pittsburgh is by far the most populous of the 10 cities — a key indicator for potential investors.
The reasons for investing in Pittsburgh may be changing
Pittsburgh has been a cash flow hub for years. Steady appreciation of 2% per year means no one can get rich quickly by buying and selling houses. However, the recent rise in house prices means the city has added another line of investment.
“Lack of inventory means simply holding on to your property, claiming tax benefits and appreciation that far exceeds the cash flow you can earn now,” John Walkerlong term house flippers and a real estate agent in the city, told BiggerPockets. “When people ask me about investing now, I first tell them don’t expect to get rich off cash flow. It takes time. However, if you make the right purchases, your net worth can increase significantly.
final thoughts
Any city needs diversity to be considered successful. While Pittsburgh’s tech companies grab the headlines, it also has other long-term draws, such as its sports teams (Steelers, Buccaneers, and Penguins), multiple prestigious universities, hospitals, and financial services institutions (PNC Bank is headquartered it’s here) ).
Diversity is key to the city’s continued growth. While rising home prices may make existing homeowners and investors feel good, when the population stagnates, it can create a false narrative. If people aren’t moving out of their homes because high interest rates won’t allow it, that’s very different from people moving into cities because jobs are growing.
Still, Pittsburgh remains affordable and has a solid job center that isn’t going away. However, it urgently needs to address issues in the city centre. This means it makes sense to invest here, especially if you have a long-term vision.
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Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
