Is Pittsburgh a Good Real Estate Investment? A Comprehensive Overview

Home prices are up over 10% month-over-month. Yes you read that right. Even as interest rates continue to rise, home prices home prices continue to rise and property values continue to appreciate. The truth is the real estate market in Pittsburgh is experiencing significant changes much like the rest of the country. With a surge in property values, a decrease in inventory, and a host of new development projects on the horizon, you’ll see why Pittsburgh is ripe for change. This article provides a detailed overview of the current market conditions, economic indicators, demographic information, future development plans, and neighborhood-specific data. By the end, you should have a clearer picture of whether Pittsburgh is a good real estate investment.

Real Estate Market Statistics

As of June 2023, the median sales price for homes in Pittsburgh is $270,000, marking a 10.2% increase month-over-month. The average rent in the city is $1,475, and the months of inventory have decreased by 24.11% to 1.92. When discussing months of inventory, what precisely do we mean by that? What this means is that if no new properties were to hit the market for sale, baed on the current demand we would run out of inventory in that time frame. In this case that would be 1.92 months before we’d run out of supply. Nevertheless, these figures indicate a strong seller's market, with high demand and low supply driving up prices. More about average rent

Economic Indicators

The economic health of a city plays a crucial role in its real estate market. In Pittsburgh, the unemployment rate has decreased to a record low of 3.9% as of June 2023. The area has also seen an increase in non-farm jobs, with the largest gains in leisure and hospitality, professional and business services, and other services. However, the construction sector has seen a decline in jobs. More about economic indicators

Demographic Information

Demographic information can help illustrate the potential demand for housing. Since 2000, Pittsburgh's population has decreased by 10.2%. The median household income is $57,821, a significant increase from $28,588 in 2000. More about demographic information

Affordability

Despite the increase in property values, Pittsburgh remains relatively affordable compared to other major cities in the United States. The median sales price of $270,000 is still far lower than the national average ($416,000), making it an attractive option for first-time homebuyers and investors alike. The average rent of $1,475 also offers a reasonable return on investment for rental properties. See, we as Pittsburgher’s often forget how good we have it here at home. If you look to the rest of the nation, especially those living in New York City or out on the West Coast, we are a very affordable place to live.

A Strong Renters Market

Pittsburgh, a bustling city, is home to over 60 higher education institutions and a hub for leading global businesses such as Google, Amazon, Apple, Facebook, IBM, Microsoft, and Uber. This convergence of students and professionals fuels a robust rental market. Over half of Pittsburgh's residents prefer to rent, ensuring low vacancy rates and high rental yields for property owners. If you own an investment property near these any of the areas major businesses, hospitals, or universities, finding tenants is typically straightforward.

Let's explore some of the high-demand neighborhoods:

Oakland: This neighborhood is a hotspot due to its central location among several universities, including Carnegie Mellon University, Chatham University, University of Pittsburgh, and Carlow University. It's also near numerous general and specialized medical practices, including UPMC, Pennsylvania's largest employer.

Bloomfield: Proximity to downtown and the presence of West Penn Hospital make Bloomfield an attractive location. It's also just a short drive or bus ride from Oakland.

Strip District: This neighborhood is close to downtown and is becoming a growing hub for tech businesses. Learn more about the Strip District in Pittsburgh.

Bakery Square/East Liberty: Known as the city's tech hub, Bakery Square is home to Google's Pittsburgh office.

Mt. Washington: This neighborhood is popular due to its proximity to downtown.

Lawrenceville: Lawrenceville's appeal comes from its closeness to downtown, Children's Hospital, West Penn Hospital, Shadyside, and Presbyterian Hospital.

Shadyside: Similar to Oakland, Shadyside is near several medical facilities and universities, making it a desirable location.

Location aside, each of these neighborhoods are bike friendly, walkable, jam packed with restaurants and entertainment while still offering many other unique advantages. This all goes to show what makes them so attractive to different demographics of renters.

Is It a Good Time to Buy a House in Pittsburgh, PA?

With property values on the rise and inventory decreasing, it may seem like a challenging time to buy a house in Pittsburgh. After all, It wasn’t long ago buyers were bending over backwards to get any house by any means possible. Today, it’s a different story. Things have slowed down to a more normalized pace but it still can be challenging in some of the areas hot-pocket neighborhoods. However, the city's relative affordability and strong economic outlook make it stand out as an attractive option for homebuyers. If you're considering buying a house in Pittsburgh, it's important to do your research and work with a knowledgeable real estate professional.

Are House Prices Dropping in Pittsburgh?

As of June 2023, house prices in Pittsburgh are not dropping but rather increasing. The median sales price has gone up by 10.2% month-over-month but about 1.9% YoY. However, real estate markets can fluctuate, and it's important to stay informed about current trends.

Is Pittsburgh a Buyers or Sellers Market?

Given the current data, Pittsburgh is more of a seller's market. The decrease in inventory and increase in property values suggest that sellers have the upper hand. However, buyers can still find opportunities, especially with the help of a skilled real estate professional.

Is Pittsburgh a Good Place to Invest in Real Estate?

Given the current market trends, Pittsburgh appears to be a promising place for real estate investment. Our Real Estate is still fairly cheap compared to most places. The city's strong economic indicators, coupled with the ongoing development projects, suggest potential for growth in property values. There are so many exciting projects in the works and we remain optimistic about the future here in Pittsburgh. However, like any investment, it's important to consider your personal financial situation and investment goals.

Future Development Plans

Several major infrastructure and development projects are planned in Pittsburgh, which could influence the real estate market. These include:

1. The Meridian in Shadyside: A mixed-use development project criticized for its "highway motel architecture".

2. Giant Eagle Project in Shadyside: ECHO Realty plans to build a new 36,000-square-foot supermarket along Penn Avenue with 231 apartments and 10 smaller shops. A three-story parking garage will be shared by the grocery store and other tenants. ECHO agreed to dedicate 15% of the units to affordable housing.

3. UPMC's New Hospital in Oakland: A new 17-story, 900,000-square-foot glass tower that will house 636 private patient rooms and serve as the center for the hospital’s departments for transplant, heart and vascular, and neurological care.

4. University of Pittsburgh's Hillman Library: A three-story glass box atrium entrance to Hillman Library, which will include expanded and updated bathrooms and elevators, a media lab and IT computer lab, and a centrally located help and information desk.

5. Walnut Capital’s Oakland Crossings: A development of 13.25 acres along Halket Street and the Boulevard of the Allies. The agreement with the city will allow buildings that are up to 195 feet tall along Halket Street across from Magee-Womens Hospital.

6. UPMC Mercy Pavilion in Uptown: A 410,000-square-foot, 10-story building that will house outpatient eye care, rehabilitation, and physical therapy.

7. Duquesne University Housing in Uptown: Duquesne University will be constructing a 12-story building with 229 units of housing for 556 students.

8. Lower Hill District Development: The long-awaited development of the Lower Hill District has started with the construction of the 24-story glass First National Bank headquarters that will include a bank branch, parking, and shops.

9. Terminal Modernization Program at Pittsburgh International Airport: One of the region’s most ambitious projects is the Terminal Modernization Program at Pittsburgh International Airport. The new terminal project will replace the current landside terminal with a new building located between concourses C and D. The project is projected to cost $1.6 billion and is projected to open in early 2025. More about future development plans

Neighborhood-Specific Data

The neighborhoods undergoing the most development in Pittsburgh include East Liberty, Bakery Square, Strip District, Lawrenceville, Bloomfield, and Lower Hill (Downtown Pittsburgh). These areas are likely to see significant changes in the coming years, making them key areas to watch for potential real estate opportunities.

In conclusion, the Pittsburgh real estate market is dynamic and evolving, with numerous factors contributing to its growth. Whether you're a homebuyer, investor, or real estate professional, staying informed about these trends can help you make informed decisions. The rising property values, strong economic indicators, and ambitious development plans all suggest that Pittsburgh could be a good real estate investment. However, as with any investment, it's essential to do your research and consider your personal ;circumstances and goals.

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