In the country's housing race, Austin, Texas is the hare and Pittsburgh is the tortoise.
According to data from the Federal Housing Finance Agency, housing costs in the city’s seven-county metropolitan region have remained steady for 20 years, even during tough economic times.
Call it boring, said Pittsburgh Today program director Doug Heuck, but the stability is a great asset for the city and has helped the region’s housing market stay healthy.
“During the Great Recession, all these other places fell off the table, but Pittsburgh didn’t,” Heuck said. “So at that point, 10 years ago, we were doing better than anywhere else.”
Pittsburgh Today published the housing appreciation rates of 16 benchmark cities from the most recent 12 months to 20 years. The formula is calculated from data on the average cost to buy or refinance a single-family home in the United States.
In 2016, Pittsburgh ranked 14th, with a rate of 3.95 percent. The benchmark average for 2016 was 6.38 percent.
But go back a decade and Pittsburgh’s home prices increase to 22.95 percent. Zillow chief economist Svenja Gudell said as other markets like Detroit and Baltimore failed, Pittsburgh suddenly became very appealing.
“Pittsburgh was special,” Gudell said. “Pittsburgh really didn’t see that drop-off.”
Gudell attributed the city’s steadiness to a lack of market volatility. She said while there is an interest in Pittsburgh, it’s not happening as quickly as places like Austin, which has an appreciation rate of 62.1 percent, or Denver, Colo., with a rate of 46.7 percent.
Low rates in the region can be partially attributed to lack of foreign investment in Pittsburgh, Gudell said. It’s also not a place that experiences inflows of populations like snowbirds, who will buy a second home somewhere warmer in the south to escape cold northern winters.
“Not to mock Pittsburgh’s weather,” Gudell said. “But it’s no Florida.”
Heuck said Pennsylvania’s market has recently been influenced by the rise and fall of Marcellus shale jobs.
In Pittsburgh, the median household income is about $50,000, according to the U.S. Census Bureau. Heuck said the population that fits into this category can find an affordable home in most neighborhoods.
At the end of 2016, home prices in Pittsburgh averaged around $130,000, which, according to the mortgage research publication HSH.com, requires a salary of about $32,000.
The real estate website Trulia listed fewer than half of Pittsburgh’s neighborhoods with home sale averages at more than the city’s median.
But Pittsburgh does still have an affordable housing problem. The City of Pittsburgh’s new Affordable Housing Task Force issued a report that said for households earning up to 50 percent of the city’s median household income, “there remains an affordability gap of 17,241 units.”
Mayor Bill Peduto and city council have expressed that they would like to construct more affordable units in the city, but have encountered difficulty funding such programs.
Gudell said she expects Pittsburgh's future home prices to steadily grow as they did in the past. She estimated a 3 percent appreciation rate in 2017, which would align with the national market.
In Pittsburgh, she said if a new buyer expects to stay in their home for more than four years, buying in Pittsburgh is a good investment.