Housing holds out in Alle-Kiski Valley
Real estate professionals say doom-and-gloom national housing statistics don't reflect the reality of the market in the Alle-Kiski Valley.
"Generally speaking, this is one of the more stable markets in the country," said Brandy Fabry, president of the Greater Allegheny-Kiski Area Board of Realtors.
"We are very fortunate in this area versus other parts of the country as we do not see the substantial appreciations and depreciations that can often have a negative effect on buyers and sellers," said Fabry, who is a New Kensington-based Realtor with RE/MAX Select Realty.
"I don't think the conditions across the country have affected the Alle-Kiski Valley," said Janet Ryan, owner of Century 21 American Heritage Realty.
"It's a typical winter market," Ryan said. "It's a little bit slow."
Her Century 21 agency had a bigger inventory than usual last year but sold a similar number of homes compared with the previous year, Ryan said.
Ryan said 2007 was a good year for her agency, which will be opening a new office in the Pittsburgh Mills mall next month to join locations in Allegheny Township, Buffalo Township and Lower Burrell.
The local optimism comes in the face of grim statistics.
Almost 1,700 homes were sold in the Pittsburgh area last month, making January 2008 the slowest January on record since 2001, according to RealSTATs, a Pittsburgh-based real estate tracking firm.
RealSTATs on Thursday reported that January home sales for the region were down 18 percent from a year ago. That figure includes houses sold in Allegheny, Beaver, Butler, Washington and Westmoreland counties.
RealSTATs could not provide similar figures for Armstrong County.
Local county sales dropped anywhere from 11 percent in Butler County to almost 18 percent in Allegheny County.
The National Association of Realtors is predicting existing home sales to pick up later this year after a slow start.
The association forecast 4.91 million homes to be sold nationally the first three months of 2008, down slightly from the 4.96 million sold during the last quarter of 2007.
Sales are expected to rebound mid-year, with 5.88 million houses forecast to be sold during the last quarter of the year.
Building permits are slow
New home construction and sales also has dropped off.
The Federal Deposit Insurance Corp., the government agency tasked with stabilizing banks and tracking economic conditions, compiled figures that show a nearly 30 percent decrease in the number of building permits issued for single-family homes nationwide from the third quarter of 2006 to the same period last year. More recent figures aren't yet available.
The fallout in Pennsylvania wasn't as bad, with a reduction in permits of about 15 percent.
Three of the Alle-Kiski Valley's counties experienced a decrease in permits issued, with Armstrong County leading the pack with a drop of almost 20 percent, according to the FDIC.
Butler County saw a slim 1 percent increase in permits issued.
Several local municipalities that had seen a boom in housing developments and new houses reported less building permits issued last year.
Allegheny Township Manager David Soboslay said 31 permits were issued for single-family homes, down from 51 in 2006.
Buffalo Township Zoning Officer Roger Kelly said he typically issues a half-dozen permits a month, even in the winter.
"Typically you'd expect them to drop off in the winter," Kelly said. "But that hasn't been the case here."
That began to change last fall. Since November, he's issued one a month.
As opposed to the one permit requested in December, he issued six in December 2006.
West Deer building inspector Gary Bogan said 32 permits for homes were issued last year, less than half as many permits as were doled out in 2005.
The U.S. Census Bureau and Department of Housing and Urban Development jointly reported a 40 percent drop in the number of new homes sold from December 2006 to last December.
Construction continues in plans
Despite the alarming numbers, most had a positive outlook for 2008.
"We do have some new developments in the works," said Bogan in West Deer. "Hopefully it will pick up."
Construction was continuing in housing developments throughout the Alle-Kiski Valley, including Maronda plans in Buffalo and Harrison townships. Buffalo Township's Kelly said one of the recent permits he issued was for a house in Maronda's Ridgeview Estates off Riemer Road.
Maronda officials have declined or not responded to repeated requests for a status update on the new Oakridge Estates in Harrison. Several homes and townhouses appear complete at the site off Oak Manor Drive.
Construction hasn't started on the River Forest development in Allegheny Township, but a representative with S&A Homes, one of the developers, said the market isn't scaring them off.
"We're watching the market closely -- I think a lot of developers are," said Steve Bisbee, a project manager with S&A in State College. "We remain excited about the Pittsburgh market."
Bisbee said figuring out a way to provide utilities -- namely sewer lines -- to River Forest is the main holdup.
"It will take a lot of time to sift through all the issues," Bisbee said. "Nothing in life happens as quickly as you'd like."
In Lower Burrell, two New Kensington developers are trying to get projects off the ground despite the market. The Burrell Group continues to clear ground at Dandyview Estates, a new housing plan off Route 780 on the former Swank Farm property.
Ziccarelli Enterprises is seeking approval for design of a condo development off Craigdell Road.
"It's sluggish, it's slow, it's tough, but it's not catastrophic," said Jack Hutterer, an agent with Northwood Realty Services in Buffalo Township.
He said the constant negative reports about the housing situation are part of the problem.
"People hear how bad it is and get discouraged," Hutterer said. "It's actually an excellent time to buy because interest rates are extremely low."
The Federal Reserve in January twice cut a key interest rate to 3 percent in hopes of staving off a looming recession and bolstering the economy. Bank loan rates, including those for mortgages, are expected to follow suit.
Another glimmer of hope from the otherwise sobering RealSTATs report: The average sale price increased about 9 percent in January from the previous year.
The average price in the Pittsburgh region was $147,000 last month, according to RealSTATs.
Hutterer said homes priced under $180,000 are selling well.
"The lower, the better," he said. "There's a lot of first-time home buyers on the market, even though lending practices have tightened up."
Every agent reached for this story had one main piece of advice: Price homes competitively.
"Everyone's looking for value," Ryan said.