Housing Markets and Risk--Pittsburgh Fares Well!

Housing Markets Vary as to Risk and Attractiveness—Pittsburgh Fares Well!

Listening to the news or reading the headlines about the real estate market may scare home buyers right out of the market today but in most cases, savvy buyers can find bargains in almost any market.  The combination of lower home prices and the lowest mortgage rates in recent history actually makes the cost of buying a home LOWER than it has been in many years.  David Berson, chief economist at the PMI Group says that during the boom, the median sales price for a U.S. home reached 7.3 times disposable per capita income; today that ratio is five times.  “Things are amazingly affordable”, he says. 

Not all real estate markets are created equal in terms of risk factors however.   PMI has developed a risk index that measures economic conditions and family income in various metropolitan areas to predict the direction of home prices going forward.  The good news is more than ¼ of the country’s 381 metro slower price escalation (Northeast and Midwest for example), didn’t take a housing price nose dive like some areas in the South and West.  

If you are looking to buy--look for markets with steady economies, unemployment below the national average of 9.6% and low odds of falling home prices says Smart Money Magazine.  Pittsburgh’s unemployment rate of 7.4% combined with their stable home prices (median price of a house is up 8% in the past 5 years) contributes to the attractiveness of Pittsburgh’s housing market.  PMI assigned Pittsburgh a 12% chance of seeing lower home prices in two years, one of the lowest in their evaluation of 40 metro areas.  Here are some of the other areas who did not fare as well:

Boston:  63.7%

Buffalo:  29.3%

Cleveland:  20.6%

Des Moines:  21.8%

Denver & Boulder:  26.1%

Jacksonville & Miami:  99%

Los Vegas:  99.8%

NY, NY:   45.3%

Philadelphia:  38.2%

Phoenix:  97.5%

Sacramento:  80%

San Diego:  77.1%

Topeka:  14.2%

Washington, DC:   51%