W.Pa. homes selling fast at higher prices — both good signs for economy
It took Stephan Swentkowsky just five days from the time he listed his house in Seven Fields, Butler County, to get a signed contract, and at his asking price of $425,000.
“It was quick, and that was great,” said Swentkowsky, 44, who closed on the sale of his four-bedroom home Aug. 30. “They gave us full price.”
Homes are selling faster in Western Pennsylvania now than they did before the housing crisis hit about five years ago and at higher prices — both good signs for the region's housing market and the economy generally.
According to West Penn Multi-List Inc., a data repository for the real estate industry, homes sold in the 13-county area in August were on the market for an average of 72 days. The span is far shorter than the 82-day average a year ago, and the 91 days for-sale houses sat in August 2009, in the thick of the housing and financial crises.
In addition, average selling prices have risen to $177,901 as of last month, versus $173,311 the year earlier, and $152,536 in August 2009.
“We went through a bit of slump in 2008, but we were able to build up average sales prices, due to the increased demand and limited inventory,” said Barbara Kohl, chief operating officer of West Penn Multi-List of McCandless.
Swentkowsky, for instance, said there were “zero houses for sale” in his old neighborhood other than his former home.
“Last summer, you didn't hear about multiple offers being made on the same house. Now it's commonplace,” said Sonny Bringol Jr., president of the Mortgage Bankers Assn. of Southwestern Pa. and owner of mortgage banker Victorian Finance LLC, Bridgeville. “That's what drives up home values, multiple offers.”
The increase in local home values also means homeowners are in better financial shape than those in most other markets.
Many U.S. housing markets — such as in Florida, Arizona and California — suffered more of a crash than this region's mere slump. Plunging home prices years ago left many homeowners “underwater,” which occurs when a home is worth less than the mortgage amount owed.
Underwater homeowners represented a vivid symbol of the depths of the housing crisis in many parts of the country, but not here, a report showed this week.
The Pittsburgh region has the second-smallest percentage of home mortgages underwater of the 97 largest metro areas in the country, according to a report from RealtyTrac Inc. of Irvine, Calif.
Just 7 percent of the region's 1.1 million homes were “seriously” underwater in September, meaning homeowners owe at least 25 percent more on their mortgage than the home is worth. By contrast, 23 percent of the nation's roughly 46.5 million homeowners were underwater.
Only Buffalo; Portland, Maine; and San Jose, Calif., were also at 7 percent, said RealtyTrac. Best, at 6 percent, were Austin; Rochester, N.Y.; and Honolulu.
“Western Pennsylvania did not see the huge increase in home prices in the 2000s, so we didn't have very far to fall in the market crash,” Bringol said.
Since spring, there has been some concern in the real estate industry that rising mortgage interest rates would dampen demand for homes. Interest on a 30-year, fixed-rate mortgage averaged 4.57 percent in the first week of September, a sharp increase from 3.55 percent the year earlier.
“Even though rates have picked up, we're still very busy, especially in the last three weeks,” said Andrew Dodd, senior vice president and director mortgage banking Allegheny Valley Bank of Lawrenceville.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or firstname.lastname@example.org.