Those looking to make a savvy investment may want to look towards Pittsburgh. George Hackett, president of Coldwell Banker Real Estate Services in Pittsburgh, remarks that home sales have been “extraordinary” for 2018, citing a ten percent increase in home sale closings over the past year.
Pittsburgh, Pennsylvania isn’t the most booming market in the United States. It’s currently rated as the twenty-second most populous city in the country, but that can be seen as a positive given the long-term history of the city. The collapse of the city’s reputation as the steel manufacturing capital of the country presaged a nosedive for Pittsburgh’s economy, but today it’s seen as undergoing something of a renaissance.
Pittsburgh has been drawing in national tech companies like Uber and Apple, and with that comes both an influx of new residents and a higher standard of living. The sudden growth of industry in the city brings with it new investments in luxury boutiques and an aggressive push to make more appealing and livable spaces in the once-floundering metropolis.
Further bolstering this economic boom is a new initiative by the University of Pittsburgh Medical Center. They’ve recently announced plans to build a $200 million immunology center that could draw in scientists and medical professionals from around the world.
And while it’s easy to speak in anecdotes about a city’s health, these particular anecdotes come backed by some respectable numbers. Home prices have increased on average by almost eleven percent in the past year, putting the new median home price at $142,800. While that’s a significant increase, it still puts pricing well below the national median of $216,700. That leaves prospective homeowners in a promising position.
I originally discussed this topic on my blog at JasonCohenPittsburgh.com.
Many factors affect a potential homeowner’s decision to buy a house, but one of the most important is safety. Neighborhoods with low crime rate are much more attractive than those with a higher tendency for crime.
Crime and the Real Estate Market
Because housing markets fluctuate due to a plethora of different factors, it is difficult to pinpoint the exact role of crime rate in the overall health of a market. However, there is one common thread that was discovered in a 2010 study by researchers at Florida State University. They found that robbery and aggravated assault most highly influenced housing values across different neighborhoods. Another study from the University of Troy found that an area’s home prices fell 0.25% for every 1% increase in violent crime.
Another interesting trend is that sometimes crime rate in one city can affect the real estate prices in another. For example, if City A slashes their police force in half and crime rates rise, neighboring City B may experience a spike in home prices because of people moving to that city. This happened in California back in 2008.
It’s not uncommon for homeowners to research an area’s crime rate before house hunting in that region. They would rather know in advance than be surprised after they move in. A history of high or rising crime rates may also take these areas off a homeowner’s option list entirely. When this becomes a pattern, it leads to the overall decrease in an area’s property value.
Pittsburgh Crime Rates
Unfortunately, Pittsburgh has one of the nation’s highest violent crime rates across all communities. In the entire state of Pennsylvania, you have a 1 in 316 chance of being a victim of a violent crime. In Pittsburgh, your chances jump to 1 in 126. Pittsburgh residents also have a 1 in 30 chance of becoming the victim of a property crime, such as burglary, theft or motor vehicle theft.
Crime Prevention Methods
When the residents of an area understand how crime affects their property values and other aspects of the community (such as business, school quality, etc.), they’re more invested in finding effective methods for crime prevention. Two common examples are neighborhood watch programs and after school programs to teach good habits from a young age. If you’re concerned about your neighborhood’s safety, get involved with the community to find solutions.
Even when Pittsburgh isn’t 60 degrees in December, the city is full of fun options for young city residents. With an abundance of activities geared toward youthful city denizens, the city has transformed itself year-round into a place that appeals to younger residents. At Jason Cohen Pittsburgh, we invest in properties that we subsequently rent, often to twenty- or thirty-something residents who are flocking to the city. For investors looking to rent their assets, Pittsburgh is an optimal location and the abundance of initiatives that attract young residents ensure that the city will continue to thrive for landlords.
Pittsburgh offers of an array of winter activities for fitness enthusiasts to be outdoors even in the winter months. Several holiday-themed 5K races as well as yoga events keep active folks busy outdoors even when the temperatures dip. The ice rink in Schenley Park offers adult-only skating on Friday evenings for those who want a peaceful night on the ice. The annual Polar Bear Plunge is a chance for cold lovers to dive into one of the local rivers and prove their mettle.
Winter is also the time for beer festivals at the convention center where craft brew enthusiasts can warm up from the cold by tasting the interesting ales, lagers, and the like from the region and beyond. The South Side will even host a chili cook-off and street festival. The Pittsburgh winter can’t stop the quarterly gallery crawls downtown, nor the monthly low-bey Unblurred on Penn Avenue.
In addition to Pitt basketball, the city offers other affordable sports entertainment for younger residents. The Penguins offer discounted tickets to students to enable the city’s youth to experience hockey at Consol Energy Center. The Student Rush program epitomizes Pittsburgh’s commitment to making the city an attractive place for young people to live and rent.
As real estate investors, we at Jason Cohen Pittsburgh strive to make our repositioned rental properties appeal to these young residents that have been part of an influx to the city. We strategically invest in properties in areas of the city that appeal to a younger demographic and renovate, adding amenities to suit their active lifestyles. From the activities being offered this winter, we think that this trend is catching on. The city’s amenities make it attractive to young renters, therefore a great place to invest in rental properties.
There’s no shortage of misconceptions about real estate, which make many people reluctant to get into buying or selling homes. This is a shame, because those misconceptions are just that: misconceptions. Here is a list of some of the top misconceptions about real estate, based on an article on the site Zillow:
You don’t need a real estate agent to buy a home in the information age: Even when you can find most things online, it’s now more important than ever to have a great local real estate agent. While the reason for using an agent isn’t as much focused on their access to proprietary data, they’re great to have on your team as advisors, since they have a lot of experience in something that you ultimately don’t experience yourself that often.
You need 20 percent down to buy a home: This is the biggest misconception for millennials, many of whom are burdened with student loans but still want to be homeowners. Lenders tended to be strict after the credit housing crisis, and financing spelled the end of mortgage deal after mortgage deal. Yet today, you can get a loan with as little as three percent down, although it isn’t that simple; you still need to have great credit, verifiable income and assets that can back you up.
My home’s value is whatever the appraiser says it is: The market value of a home is determined by what willing buyers and sellers agree upon in an open market. Yet other than that, a homeowner or would-be seller can only rely on a recent appraisal for a bank refinance. Typically, a home’s appraised value comes in below the market value, and such factors as views, finishes, fixtures or neighborhood specifications can all affect an appraisal.
You don’t need to have open houses to sell homes: While the advent of online listings might make open houses look unnecessary, that’s not always true. Open houses are the blood of DNA real estate, and you’ll have a better chance of selling your home if you make it more available to potential buyers.