2023 Spotlight: Pittsburgh’s thriving real estate landscape

2023 Spotlight: Pittsburgh’s thriving real estate landscape

2022-12-21T11:27:00-05:00December 21st, 2022|Economy, Pittsburgh, Real Estate|

Writer: Eleana Teran

2 min read December 2022Pittsburgh is a thriving city with a diverse economy that is poised for continued success in 2023. From its booming manufacturing and healthcare industries to its burgeoning tech scene, the City of Bridges is expecting further growth at a time when the economy is experiencing new challenges.

Unlike many other metro cities across the United States, Pittsburgh remains relatively affordable when it comes to housing costs. The city has seen steady population growth in recent years, but the market has remained stable thanks to a mix of new development and the rehabilitation of existing properties. On Tuesday, Gov. Tom Wolf announced new funding for 12 projects in the greater Pittsburgh area that will address infrastructure and residential improvements and developments.

Pittsburgh is predicted to have strong real estate market conditions in the coming buying season and throughout 2023, according to data from Realtor.com. The city has been ranked as the 15th top housing market for 2023 in terms of expected growth in home sales and listing prices. While the Steel City has seen slower price increases compared to other markets in the United States, it has also faced a smaller affordability crunch up until now.

“Pittsburgh is interesting because we look good in the bad times but bad in the good times when compared to high-growth markets,” Mark Popovich, senior managing director and Pittsburgh office co-head of JLL Capital Markets told Invest:. “We are not a high-growth market, but we are a strong yield and relatively stable market. This stability suits lenders who like that we aren’t a boom-and-bust market and many of our borrowers are local regional development firms that tend to develop or buy and hold.”

Despite most markets experiencing contractions, the Pittsburgh region is expected to see 4.2% growth in 2023 compared to last year. Based on this figure, it ranks 12th among the 100 largest U.S. metropolitan areas and is in the 87th percentile. 

Despite expected growth, stakeholders are assessing the potential impact on the housing market from rising inflationary pressures and increasing interest rates. However, local leaders remain optimistic about the market’s resilience to these external factors. Earlier this year, John Bilyak, market leader and principal for the Pittsburgh office at global commercial real estate firm Colliers, told Invest:, “While we do anticipate an impact on the market due to the global economic uncertainty, we do not anticipate as drastic an impact that has been forecasted for some of the Tier 1 markets.”

The overall positive outlook is represented by Pittsburgh’s strong performance on Zillow’s winter and spring 2023 list of the best markets for first-time buyers. With a healthy inventory-to-buyer ratio, a low share of listings with price reductions and favorable mortgage and rent affordability, the city ranked No. 5 out of the Top 10 metropolitan areas. According to data from October 2022, the typical rent payment in Pittsburgh as a percentage of income is 33%, and the typical mortgage payment as a percentage of income is 30%. It would take approximately 17 years for a first-time buyer in Pittsburgh to save for a 10% down payment at a savings rate of 2.4%. The estimated inventory-to-buyer ratio in Pittsburgh is six to one, and 28% of listings in the area have had a price cut.

While Pittsburgh’s housing market appears to be in a strong position based on its performance, city leaders are also interested in bringing more development and increasing housing inventory. Dan Santoro, township manager of Cranberry Township, discussed the growth the township has seen in its housing market with several large new projects coming online and more in the pipeline, and its commitment to continue to diversify housing options. “Having a diversity of options in types of housing, whether it’s multifamily, single-family, or townhouses but also in different configurations and styles, provides something for everyone and makes for a more sustainable future,” he said.

In addition to expanding housing options, Pittsburgh is also seeing a trend of converting downtown B-product office buildings to multifamily residential use. As Bilyak noted, “The initiative to transition some of the Class B office products to multifamily makes all the sense in the world, given the current issues of affordable housing and the challenges that offices face.”

Despite the challenges posed by the macroeconomic conditions, Pittsburgh’s market remains strong and resilient. The city’s economy is driven by fast-growing technology and research companies, as well as industries such as artificial intelligence, robotics, advanced and additive manufacturing, energy, life sciences, logistics, healthcare and higher education. Today, Pittsburgh has successfully transformed into a hub for innovation and progress, and with all of these positive factors in play, it’s no surprise that the outlook for 2023 in Pittsburgh is bright. 

For more information, visit: 

https://www.us.jll.com/
https://www.colliers.com/
https://www.cranberrytownship.org/
https://pittsburghpa.gov/ 

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