Median home sale price remains steady in borough
November 29th, 2007 - Category: Real EstateKeith Nowalk has had two houses on the market in Plum for a few years.
One house originally was listed at just under $500,000 and the other is listed close to $65,000. He can’t seem to sell either house. He’s cut the more expensive price by $150,000 over the last three years and moved a renter into the other house.
“Everyone is bringing prices down,” said Nowalk, a Plum resident and developer. “It’s such a buyer’s market. There are so few buyers that they’re going to get their dream house for next to nothing so regular houses aren’t going to sell.”
In Plum, the median price of a house selling in Plum has been steady at around $130,000 for the last four years, according to RealSTATs Inc.
Nowalk attributes that figure to an “inventory of houses” that is loaded with older homes sold at lower prices and said the ratio will never flip to an inventory with more new houses than old.
Dee Dee Adams, Realtor with Northwood Realty and Plum resident, said she sells houses in Plum with price tags ranging from $90,000 to $300,000. Adams attributes the median price’s stability over the last four years to Plum’s desirability as community.
“Even though it’s in Allegheny County and you hear a lot about people moving out of the county, Plum is a desirable neighborhood because you hear a lot of positive things about the schools,” Adams said.
There are high-quality homes for sale in Plum, said Adams, and the length of time a house sits on the market is attributable to location, price and condition.
“If those three things are good, it’s going to sell; if not, the house will sit,” she said.
Nowalk isn’t sure how far he’s willing to go down on the price of the more expensive home and said he might just wait until the real estate cycle improves again.
“After Sept. 11, people weren’t sure if they could trust the stock market, so everyone with money bought homes and real estate. And in 2003 it was like someone turned off the spigot and they quit buying,” Nowalk said.
In addition to the two houses he has on the market, Nowalk is sitting on 17 residential lots off of Leroy Street where he plans to build and sell 2,000-square-foot houses in the $169,000 range.
He figured that price range would undercut some of the more expensive planned residential neighborhoods under construction in the borough but has since decided to wait to start construction until he knows he can sell his products.
“It could take a good four or five years to get back to normal,” Nowalk said.
Prices in the Pittsburgh area are still rising overall, but slowly, according to a Tribune-Review analysis of sales data compiled by RealSTATs Inc., which monitors deed transfers.
Local median prices — the midpoint price exceeded by exactly half the homes sold — had their slowest growth in three years.
The Allegheny County median of $115,000 for the 12 months ended June 30 was up 2.7 percent over the previous year. That compared to gains near 4 percent each of the two previous years.
Westmoreland County’s $120,000 median rose just 1.6 percent, after increasing more than 5 percent for two years straight.
Butler and Washington counties also posted slower growth, and the Beaver County median of $94,340 fell 2.6 percent from the prior year.
Median prices fell last year in almost half of the 223 municipalities and Pittsburgh wards the Trib analyzed, compared to one third of those places declining each of the previous two years.
In 48 areas — one in five — median prices are lower than they were three years ago.
“Houses are still selling, but they’re taking longer,” said Georgie Smigel, a Coldwell Banker agent whose territory includes the North Hills and Butler County.
Declining values were spread across a mix of neighborhoods. The biggest drop-off was in Jackson Township, Butler County, where a median price that hovered at about $200,000 for three years suddenly fell to $119,000 this year. Smigel said a new subdivision, Jackson Manor, filled up, which curtailed the supply of homes over $200,000.
Tarentum, Carnegie, Char-leroi, McKeesport and South Huntingdon, Westmoreland County, also saw declines of 10 percent or more.
Southwestern Pennsylv-ania homes are appreciating slower than elsewhere in the state, according to the Office of Federal Housing Enterprise Oversight. The agency computes quarterly house price indexes based on sales and refinancing appraisals.
Metropolitan Pittsburgh’s spring house price index was up 3.5 percent from a year ago.
While slightly better than the nationwide 3.2 percent increase, it trailed Pennsylvania’s other markets, from Philadelphia’s 3.8 percent to Scranton’s 9.9 — the highest increase in the entire Northeast.
Columbus, Ohio, and Cleveland had slower home appreciation than Pittsburgh, and Cleveland values dropped 0.6 percent. Most of the sharpest price declines were in Florida and California, as formerly white-hot markets cooled.
“There haven’t been booms and busts in Pittsburgh in the way there have been in Florida, California and New England,” said Andrew Leventis, senior economist for the Washington agency.
“To the extent that you may have a lower appreciation rate than other places in Pennsylvania, that may not necessarily be a bad thing. It’s certainly not a bad thing for people who are looking to buy a house over the next year or two,” Leventis said.
New home construction in Southwestern Pennsylvania is down 8 percent for the first 9 months of 2006, said Jeff Burd, whose Tall Timber Group in Ross tracks construction permits.
That’s better than the national picture, where housing starts are down by some 25 percent, he said.
“We’re head and shoulders above the market, no doubt about it, but when we’ll get positive numbers and how much they’ll be positive, I don’t know,” Burd said.
