This article was published on: 10/01/2002
REGIONAL NEWS--EAST
Connecticut, Delaware, District of Columbia, Maine, Massachusetts, New Hampshire, Maryland, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia
More News: Midwest South West
News from the week of January 13, 2003
Sellers' Markets Persist in Pennsylvania
With one exception, Pennsylvania practitioners report continued
In Philadelphia, the biggest story involves suburbanites’ return to the center city, according to Alvin (Bud) Plumer, president of Plumer & Associates Inc. “A lot of young people are moving back in, because they want the excitement of the center city. . . I’ve been in business here since 1947, and this is the best market we’ve ever seen,” says Plumer. “The population increased by 55,000 people between 1990 and 2000.”
Plumber says the market has been busy for the last two years, but the sellers’ market tempered slightly in November and December, especially among high-end homes--those priced above $700,000. High-end market bidding wars have stopped, and some sellers have slightly reduced prices.
Center city housing consists primarily of condos and townhouses, he says. The average price varies greatly from area to area, beginning around $200,000. Prices are still increasing in some areas and have stabilized in others. There’s a lot of new construction; finding land within the city is a problem. Mostly, Plumer says, developers are knocking down older buildings to make way for new construction.
In Pittsburgh, the sellers’ market remains strong after several years, according to Helen Hanna Casey, president of Howard Hanna Real Estate Services. Casey estimates the average home price at approximately $125,000, up from about $119,000 at this time last year. The average time on market is under 90 days.
Casey says price increases are much greater in the first-time homebuyers market, which consists primarily of townhouses. Another hot market consists of third-time homebuyers, mostly in the $300,000 plus range. Sales are also strong in big, new suburbs, which increasingly resemble the traditional walkable neighborhoods of 50 years ago. Affordable housing, although not overly abundant, is still readily available, especially in some areas built in the 1950s, she says.
The only segment where the Pittsburgh market is experiencing some changes is at the high end. “Six months ago we were begging people to list houses above $2 million,” says Casey. “Now, suddenly, there are so many high-end houses on the market that we can’t sell them all.” She says the high-end market is still strong, but the homes are taking longer to sell. Casey attributes the glut of high-end properties to three factors: high prices over the last 18 months have drawn more owners to place their houses on the market; empty nesters over age 55 are deciding they don’t need big homes; and others are choosing to downsize for various reasons.
As for the future, Casey says, “We have an interesting year ahead of us, because the real estate market here has run so far ahead of the economy.” Locally, she feels the market will continue at about the same rate, as long as there are no major changes in the local economy. She says Pittsburgh’s market is usually pretty stable--not subject to the extremes seen in some other markets.
The real estate market has been even faster paced in Harrisburg, the state’s capitol, according to Dick Gibney, owner of Dick Gibney Real Estate. “We had an unbelievable crunch this past spring and summer,” he says. “In my 40 years of business, I’ve never seen anything like it. There were often two or three contracts on one property at the same time.”
Although things evened out over the holiday season, prices have been steadily increasing throughout the year, and are currently about 5 percent to 7 percent above this time last year. The area has many new developments in the medium- to upper-price range--from around $250,000 to $475,000--and the average time on market is 45-65 days.
The county and state offer many affordable housing programs, and lots are available in the $100,000 price range.
Gibney says the only worry is that several major companies in the area are downsizing. Verizon, one of the area’s largest employers, recently laid off several hundred people.
No such worries exist upstate in the Scranton area. Like Gibney, Frank Golden, owner of Frank P. Golden Real Estate, says he “has never seen anything like [the recent market]” in his 26 years of business, although business slowed over the holidays, and there are fewer bidding wars than there were in early 2002.
The local economy is diversified, ranging from urban industries to ski resorts in the Pocono Mountains, Golden says. Many investors from nearby New York and New Jersey who’ve been hurt in the stock market are now snapping up area properties. Prices vary throughout the region. In North Pocono, for example, homes that sold for $109,000 last year are now selling for $126,000. In the upscale Avington Clark Summit area, prices have inched upwards, from around $170,000 to $172,000. And there’s no shortage of affordable housing.
Golden also does a lot of refinancing work, which, he says, offers “spectacular” opportunities. Some homeowners are able to cut 15 years off their mortgages.
The picture isn’t so rosy in the state’s northwestern region. The weak national economy has hit the area hard, according to Teresa Wygle, broker and partner of Coldwell Banker Bainbridge Kaufman in Meadville, just south of Erie. The local economy is based primarily on the tool and die industry, which makes metal parts used in other manufacturing industries. And manufacturers in general are feeling the pinch.
Wygle says the downturn began in 1996, and it’s been a buyers’ market ever since. There’s a housing oversupply and the average appreciation rate is only approximately 3 percent. The average price is approximately $80,000, about the same as this time last year. Prices rebounded after a dip earlier this year, she says, but the general downturn will likely continue for some time. The good news is that since her county qualifies as economically challenged, second-time homebuyers can qualify for affordable housing funds normally reserved for first-time buyers.
The area’s weak economy has also prompted larger companies to purchase smaller competitors. Wygle, who’s been in business since 1957, recently bought out several smaller companies and is in the process of acquiring another. With the advent of new computer technology, many small companies have found it unfeasible to continue doing business using old-fashioned paperwork, but too expensive to upgrade to the new technology, she says.
By Pat Taylor for REALTOR® Magazine Online
