Home sales increased in region in 2012, first time in eight years
Record-low mortgage interest rates and a rebounding economy helped drive an increase in home sales in the Pittsburgh region in 2012, the first annual increase in eight years, housing industry leaders said on Friday.
Sales of new and existing homes rose 13.4 percent last year over 2011, a report showed.
“Pittsburgh was spared the boom-and-bust cycle in housing prices and had less correction to make in housing prices, which allowed it to have a strong year in 2012,” said George Mokrzan, director of economics with Huntington National Bank.
“Pennsylvania, over the long term, has had one of the best housing price growth rates compared to other states in the nation, and it took a little longer for the market momentum to occur elsewhere than in the Pittsburgh market,” Mokrzan said.
Job creation and low unemployment in Pittsburgh helped spur the housing market to meet resulting demand, he and others said.
Last year, 26,628 homes sold, up from 23,481 in 2011; it was the first year since 2004 to show the increase, according to RealStats, a South Side-based real estate information company.
“The burst in homebuying activity pumped an additional $700 million into the market last year, as dollar activity jumped from $3.7 billion in 2011 to $4.4 billion in 2012,” said Daniel Murrer, RealStats vice president.
“Consumers had the confidence that they could afford to buy a home in 2012. Banks had the confidence to loan to those buyers. Low interest rates made buying attractive, and tax uncertainties of 2013 created a surge at the year-end,” Murrer said.
“The term ‘lean year' in housing did not reflect the housing market in Pittsburgh,” said Kurt Rankin, a PNC economist. “While sales in this region declined because of the recession, the value of houses was maintained compared to the nation, which saw values drop.”
Despite fewer sales annually from 2005 to 2011, the average home price continued to increase annually, except for 2009, the report showed. Average prices rose from $141,059 in 2005 to $150,566 in 2008, fell to $147,744 in 2009, only to rebound to $153,043 in 2010. In 2012, the average price was $166,336.
Pittsburgh recouped its losses in early 2012, when pre-recession prices in home values were restored, because the number of jobs created recovered those lost during the recession and the unemployment rate was lower than the national rate, Rankin said.
“Home values have continued to increase, and when the market is considered in a positive light, it makes sense that the 2012 totals were up,” he said.
Howard Hanna III, CEO of Howard Hanna Holdings, the parent company of Howard Hanna Real Estate Services, cited at least five reasons the year was strong for housing sales.
“The mortgage interest rate over the past 2 1⁄2 years has been extremely low. Also, there was a pent-up demand among move-up buyers for a new home, a demand that for the past five or six years was not met because of the economy,” Hanna said.
Other factors were home price increases and lack of inventory, caused in part by low new-housing production and by the number of foreclosed houses placed on the market, he said.
Perhaps more significantly, corporations began shifting personnel around, and that meant people moving in or out of the Pittsburgh region, Hanna said.
“The report is good news,” said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh and of West Penn Multi-List, the region's largest multiple-listing agency. “It was a banner year, as the average sales price matched those in 2004-05 before the recession set in.”
Hackett hopes construction of single-family homes increases this year.
Murrer notes that Pittsburgh-area housing continues to appreciate. Over the past 10 years, prices increased 3 to 4 percent annually.
Sam Spatter is a staff writer forTrib Total Media. He can be reached at 412-320-7843 or firstname.lastname@example.org.