Housing market on robust pace
Two homes under construction just inside the entrance to Piatt Estates in Chartiers Township
Marcus Piatt stands in the middle of Piatt Estates in Chartiers Township Wednesday, with construction going on around him.
Kelli Rishell and her husband Dave have been looking to buy their first house for several months, but so far, she said, they haven’t turned anything up in their price range of $125,000.
Doing their search primarily on realty agency websites, the Rishells visited a lot of houses in the Waynesburg area, but none they want to call home.
“I’m on the Internet looking all of the time,” said Rishell, 25, an administrative assistant for the Greene County commissioners in Waynesburg.
“If (a house) is in our price range, it’s pretty much like a dump, and we’d have to do a lot of work.”
Once, they found a house they liked that had been remodeled that was slightly higher than their budget, but the owner wouldn’t lower the asking price, she said.
Other times, she said, “you find a decent home, but it’s in a bad area.”
While the challenge of finding an entry-level home is something most first-time homebuyers can identify with, it could have something to do with housing inventory, which has only begun to pick up, according to George Hackett, president of West Penn MultiList and president of Coldwell Banker Real Estate Services, Pittsburgh. MultiList tracks home sales in 13 Southwestern Pennsylvania counties, including Washington and Greene.
In the years that most areas of the country were struggling with the worst recession since the Great Depression, with housing taking the brunt of the downturn, Southwestern Pennsylvania’s home sales rose steadily after 2008, thanks to a regional economy fueled by a natural gas boom.
“We are finally starting to replenish our inventory of houses for sale in the area,” Hackett said in July, when MultiList released its sales data for the first six months of 2014.
“People are buying what’s out there, so having additional houses on the market will afford home-seekers more options.”
According to the report, new listings in MultiList’s survey area increased 10.32 percent (3,742 homes in June 2013 versus 4,128 in June 2014.)
When comparing January to June 2014 data with the same period in 2013, new listings were down only 0.74 percent (20,248 homes versus 20,098), with residential homes placed under agreement decreasing 1l.14 percent (20,484 homes versus 20,250).
The average home sale price across the 13 counties increaed 1.21 percent ($167,155 to $169,180); and average number of days on the market decreased 3.19 percent (94 versus 91 days.)
While other areas around the country have only recently turned the corner on reviving homes sales since the peak of the Great Recession in 2008, the Pittsburgh region never saw much of a decline.
“We’re one of the few areas where prices are actually higher than they were in 2008,” Hackett said.
According to data provided by MultiList for Washington and Greene counties, the average price of a home has shown mostly steady increases since 2008, while the average time on the market has declined, especially in the past few years.
Hackett agreed the natural gas boom in Washington and Greene counties, as well as historically low interest rates, have been responsible for the sales momentum over the past several years.
It appears the number of potential homebuyers coming from the gas industry won’t be abating anytime soon.
The Marcellus Shale Coalition, which represents oil and gas exploration companies and their supply chain partners in Pennsylvania, said in late July that its members plan to hire a total of 2,000 people this year, with the majority of them – 80 percent – filling positions in engineering, construction and equipment operations in Southwestern Pennsylvania’s portion of the shale strata.
Despite the strong demand for housing at all price points, “we still have a really good percentage of people who are first-time homebuyers,” Hackett said.
But the trend of home prices heading higher while spending less time on the market can put pressure on those looking to buy, especially first-timers.
As Rishell noted from her experience, potential buyers have to scramble when they spot a classic house going on the market that fits their budget.
“If it’s a three-bedroom, two-bath home, everybody wants it, and it’s gone,” she said.
According to Hackett, homes in the $100,000 to $200,000 price range comprise one of the biggest markets in the region.
He said MultiList’s statistics show that “there are more homes in the region that are under $200,000 than over $200,000.” But homes in that range are existing units.Hackett said most homebuilders are building houses for buyers who are trading up to more expensive units.
“There are lots of young couples who would love to have a new house,” he said, adding that builders are “hard-pressed” to build below a certain price threshold, where new homes average between $300,000 and $400,000, with some builders now also building more homes in the $400,000-plus range.
“If you’re (looking for a house) under $250,000, you can’t really buy new,” said Marcus Piatt of Millcraft Investments, which is developing Piatt Estates, with two homebuilding companies with a goal of building 181 homes off Allison Hollow Road in Chartiers Township.
According to Piatt, the development is targeting empty nesters with patio homes, as well as homeowners who are looking to trade up from their existing single-family homes. He said a total of 25 homes have been sold with about a dozen currently under construction.
Business has been so brisk, he said, that plans for the second phase were moved forward from an original start date of early next year.
“We’ll be starting the second phase in two weeks,” he said.
Patio homes start at $260,000, with single-family homes in the low $300,000s. A smaller number of luxury units on one-acre lots are going as high as $650,000.
While Piatt acknowledged the impact the oil and gas boom is having on the region’s housing, he said Piatt Estates is also finding that homebuyers aren’t afraid to cross borders to shop for a new home.
“The majority of business we’ve been seeing is from Allegheny County,” he said.