In a recent article, I explained that the U.S. real estate market, which has been extremely hot for nearly two years, had begun to cool. If you're looking to buy or sell a home in Pittsburgh, you could be asking how this slowdown has affected the Pittsburgh real estate market.
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Keep reading and I'll tell you about 2022–23 Pittsburgh real estate market trends we are seeing as a result of the market shift.
Pittsburgh Housing Supply Trends
Because of lower demand for homes, inventory has been increasing in recent months.
High interest rates, which have nearly doubled since the beginning of 2022 and kept many potential home buyers out of the market, are to blame for the drop in demand.
According to a Pittsburgh, Pennsylvania, real estate market survey, the number of homes actively listed in August 2022 was 1,512 – a +6.9% increase from July's total of 1,414 homes for sale.
The biggest increase in inventory was 8.7% for four-bedroom homes, followed by 7.9% for three-bedroom homes, 6.9% for two-bedroom houses, 5.4% for five-bedroom homes, and 4.2% for one-bedroom homes.
The increase in inventory is beneficial to buyers because it has helped reduce the intense competition for homes that existed since the Covid pandemic began. Now, buyers don't have to rush their decision to purchase a home and can view several properties before deciding on one.
With interest rates expected to rise further, more people are likely to put off purchasing a home, which will likely continue to increase inventory and halt or reduce home price gains.
Pittsburgh Home Price Trends
It wasn't uncommon a few months ago for a home seller to receive multiple offers and several thousand dollars more than their asking price from buyers outbidding each other to purchase their home.
The competition was so fierce that some buyers waived inspection to entice sellers, which proved to be a costly mistake for some, as they ended up purchasing overpriced properties that required expensive repairs.
Now we're seeing price drops, and home sellers are slowly adjusting to the fact that the hot property market is coming to an end, which means they won't get as many offers when they list their property, and they may have to accept buyer offers that are lower than their asking price and with seller concessions.
According to Realtor.com, home sellers in Pittsburgh reduced their prices by 19% in August 2022.
In July the median listing price was $249,000 while the median home sold price was $238K.
We are actively in the market every day, assisting buyers as well as sellers in finding the best deals – and currently, the only time sellers receive multiple offers is when their home is extremely desirable or in a prime location.
Homes Are Still Selling Fast in Pittsburgh
Despite low demand and high interest rates, the average time to sell a home remains unchanged. According to Redfin, homes in Pittsburgh stayed on the market for 48 days on average in July 2022, compared to 49 days the previous year.
Realtor.com had the median days on market for a Pittsburgh home in August at 44 days, down from 45 days in 2021.
If buyers continue to avoid the market, we may return to pre-pandemic levels, when it took an average of 64 days to sell a home.
While the time on market has remained stable, the number of sales per month has decreased. In July, for example, 656 homes were sold, a reduction from 856 during the same time last year.
What Do the Real Estate Market Trends in Pittsburgh Mean for Buyers and Sellers?
High interest rates reduce potential home buyers' purchasing power significantly.
For example, in December 2021, a 30-year fixed-rate mortgage was about 3.5%, and in September 2022, it is close to 5.81%.
If you had a $2500 mortgage budget in December of last year, you could afford a $517,500 home, but with current interest rates, you can only afford a $399,750 home, an almost $120,000 difference in spending power.
As previously mentioned, interest rates are likely to rise further — so if you're thinking about buying a house, I would advise you to act quickly because this could be the best time for you to purchase a house.
For sellers, mortgage rates rising will make buyers unable to continue paying high prices for homes. So price correcting will play a big part in how fast your home sells.
Also, because there is still a scarcity of inventory, sellers with well-maintained properties and a reasonable listing price will likely receive more offers.
More listings to choose from, as well as seller willingness to lower prices, will give buyers looking for a home some breathing room and more bargaining power.
Homebuyers of Pittsburgh: #1 Professional Home Buyer in Pittsburgh
If you are considering buying or selling a home, contact Homebuyers of Pittsburgh at 412-444-8914 or info [at] urbanpgh.com.
We can assist buyers with finding their dream home or Pittsburgh property to invest in that provides above-average returns.
We have also helped many homeowners quickly sell their homes using a three-step process that eliminates home listings, inspections, real estate agents, banks, and other things that can complicate a home sale.
We would love to help you figure out how to navigate the Pittsburgh real estate market, so please reach out today!