Housing market coming back in Pittsburgh region
In 2005 and 2006, it was not uncommon to find in Rostraver Township alone several speculative homes built by contractors without a specific customer, said Tom Simon. A consumer could just walk in, tour a house and buy.
But with the decline in the economy starting in 2008, contractors couldn't get loans to build speculative homes, said Simon, broker/owner of Howard Hanna Simon Real Estate Services, Rostraver Township, and that part of the real estate market went away.
“The fact that constructors are getting loans and building spec homes shows that the market is on the rise,” said Simon. “When you see new construction coming back in an area, that's a sign the market is coming back.”
Local realtors said the signs are there that the real estate market is rebounding, even if first-time home buyers are aging.
Home ownership fell nationwide in the second quarter of 2014, and a majority of experts said they expect it to fall further in coming years as the millennial generation delays home purchases and the age of first-time home buyers rises, according to the latest Zillow Home Price Expectations Survey.
Zillow, a Seattle-based real estate information company, expects that despite a lack of homebuyers in the 25-to-35 age group in the Pittsburgh region, by June 2015, the median price of a house sold in the region will be $129,201, a 5.16-percent increase from June 2014. The figures are based on house purchases by those ages 25 to 35 during the past year.
The highest increase of 6.2 percent will be in Butler County, where the median price will be $187,862, followed by Allegheny County's $133,201 price, up 5.97 percent. Washington County, at $132,920, will show a 4.83-percent increase; Westmoreland at $114,672 will be up 3.78 percent; and Fayette at $90,983, up 3.39 percent.
Tom Jolley, real estate agent at Century 21 Realty in Rostraver Township, said home buyers are trying to save more money before they make their first home purchase.
“They're buying better homes and trying to keep their payments lower,” Jolley said.
Jolley said home prices appear to be staying the same and the interest rates are remaining low.
Simon said buyers are waiting just a little longer to make that first home purchase.
“I'm seeing that people because of student loan debt and employment was tight – it's loosened up now – that a lot of people are staying with their parents or living with someone else longer and holding off on purchasing new home,” Simon said.
Simon said the trend first occurred during the economic downturn that began in 2008.
Simon said the median price for a home in the Valley is roughly $120,000. He expects to see a 3 to 4 percent appreciation in home prices in the coming year.
Still, Simon said it is a good market for sellers.
“I think it's turning the corner from a buyers' market to a sellers' market,” Simon said. “We're seeing multiple offers and seeing homes selling within the first couple days on market. With home appreciation, low inventories, low interest rates and a lot of pent-up demand and because of that, today it's a sellers' market.”
Thomas Bojsen, broker/owner of Great Dane of Monessen, said, “the trend is definitely out there.”
“We have also seen here we have sold homes to that age group (25 to 35),” Bojsen said. “They are taking advantage of special loan programs for first-time home buyers.”
Bojsen said the rental market has been very strong in the Valley, especially since the real estate market went soft in 2008.
“We're seeing some of those folks coming back and getting ready to buy their first home.” Bojsen said.
LouAnn Kenney, branch manager of the Rostraver branch of Berkshire Hathaway Home Services, said first-time owners are waiting a little longer because changes in the mortgage industry are requiring a slightly larger down payment.
“The amazing thing is that mortgage rates are hovering a around 5 percent – the lowest they've been in years,” Kenney said.
The 30-year fixed conventional rate was 4.125 percent this week, Kenney noted. That is for home buyers with a very good credit rating and between 5 and 20 percent down.
Kenney said she recommends home buyers – especially first-time buyers – get pre-approved so they know how much they can afford.
Lower mortgage rates for home buyers making a larger down payment is a good combination for first-time home buyers, Kenney said.
“They are getting a lot more home for their money,” Kenney said.
Chris Buckley is a staff writer for Trib Total Media. He can be reached at 724-684-2642 or email@example.com.