CHMA Pittsburgh, Pennsylvania - HUD User

17 Pages·2011·3.84 MB·English

C O M P R E H E N S I V E H O U S I N G M A R K E T A N A L Y S I S
Pittsburgh, Pennsylvania
U.S. Department of Housing and Urban Development Office of Policy Development and Research As of August 1, 2011
Summary
Economy 3-year forecast period is expected to
total 8,950 new homes, a portion of
Economic conditions strengthened
which will be met by the 850 homes
in the Pittsburgh HMA during the
Housing Market Area currently under construction (see
past year. Nonfarm payrolls increased
Table 1). In addition, some of the
by 15,000 jobs, or 1.4 percent, to
60,400 other vacant units in the HMA
1,133,000 jobs during the 12 months
may re-enter the market and satisfy
ending July 2011, with the most signif -
some of the demand.
icant growth occurring in three sectors:
education and health services; logging,
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Mahoning Lawrence payroll jobs are expected to increase are currently soft, with a 7.4-percent
Butler
Colum- Armstrong by an average of 1.4 percent a year vacancy rate. The overbuilding of
biana Beaver Indiana
HaBnrcooockke Ohio Allegheny Westmoreland Cambria dbyu reixnpga tnhsei o3n-y iena rt hfoe reedcuascta tpieornio adn,d l ed r2e0n0t0asl, ucnoiutsp ldeudr iwnigt hth me oedarelrya-tteo -hmoiuds e-
Washington health services sector. hold growth since 2000, led to softer
Ohio
Marshall Greene PenFnasyyeltvteania Somerset Sales Market cdoenmdaintido nins. tDheu rHinMg Ath eis f eoxrepceacstet dp etori od,
Wetzel Monongalia Garrett
West Virginia Preston Maryland total approximately 2,050 new rental
Sales market conditions in the HMA
The Pittsburgh Housing Market Area units, part of which will be met by the
are currently soft. During the 12 months
(HMA), located in southwestern 950 rental units under construction
ending June 2011, new and existing
Pennsylvania, is coterminous with the (see Table 1).
home sales declined by 20 percent, to
Pittsburgh Metropolitan Statistical Area.
22,700 homes. Demand during the
For purposes of this analysis, the HMA
is divided into three submarkets: the
Central Pittsburgh submarket, compris-
ing Allegheny County, including the
principal city of Pittsburgh; the Southern
Pittsburgh submarket, comprising Fay-
ette, Washington, and Westmoreland Market Details
Counties; and the Northern Pittsburgh
Economic Conditions .....................................................................2
submarket, comprising Armstrong,
Beaver, and Butler Counties. Population and Households ...........................................................5
Housing Market Trends ..................................................................7
Data Profiles .................................................................................15
Summary Continued
2
Table 1. Housing Demand in the Pittsburgh HMA, 3-Year Forecast, August 1, 2011 to
August 1, 2014
Pittsburgh Central Pittsburgh Southern Pittsburgh Northern Pittsburgh
HMA Submarket Submarket Submarket
Sales Rental Sales Rental Sales Rental Sales Rental
Units Units Units Units Units Units Units Units
Total Demand 8,950 2,050 3,850 1,500 2,800 0 2,300 550
Under
S Construction 850 950 300 700 300 50 250 200
I
S Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast
Y
L period. Units under construction as of August 1, 2011. A portion of the estimated 60,400 other vacant units in the HMA will
A likely satisfy some of the forecast demand.
N
A Source: Estimates by analyst

T
E
K
R
A
M Economic Conditions

G
N
I
S
U
O T
H
he Pittsburgh HMA is the jobs, with nearly 80 percent of
E
V economic anchor of northern those losses concentrated in the
I
S Appalachia and the Ohio River manufacturing, wholesale and retail
N
E
Valley. During the 12 months ending trade, and professional and business
H
E July 2011, the economy of the HMA services sectors. Declines in nonfarm
R
P
strengthened, adding 15,000 nonfarm payrolls abated when the economy
M
O payroll jobs, an increase of 1.4 percent, added a total of 3,000 jobs during
C
to 1,133,000 jobs (see Table 2). This 2010, and the wholesale and retail
•

A gain is a significant improvement from trade and professional and business
P
the economic decline that occurred services sectors improved. During
,
h during 2009, when the HMA lost the 12 months ending July 2011, the
g
r more than 28,000 nonfarm payroll average unemployment rate declined
u
b to 7.4 percent from the 8-percent rate
s
t Table 2. 12-Month Average Nonfarm Payroll Jobs in the Pittsburgh HMA,
t recorded for the previous 12 months.
i by Sector
P See Figure 1 for trends in the labor
12 Months 12 Months
Ending Ending Percent force, resident employment, and
Change
July 2010 July 2011 average unemployment rate in the
Total Nonfarm Payroll Jobs 1,118,000 1,133,000 1.4 HMA from 2000 through 2010.
Goods Producing 142,800 145,900 2.1
Mining, Logging, & Construction 55,800 57,200 2.5 Despite the improvement in the
Manufacturing 87,000 88,650 1.9
economy of the HMA during the
Service Providing 975,100 987,400 1.3
Wholesale & Retail Trade 171,300 173,500 1.3 12 months ending July 2011, the
Transportation & Utilities 41,500 42,300 1.9 information and government sectors
Information 18,950 18,050 – 4.8
had nonfarm payroll losses of 4.8 and
Financial Activities 68,000 68,850 1.2
Professional & Business Services 154,700 158,800 2.6 0.9 percent, or 900 and 1,200 jobs,
Education & Health Services 234,600 238,500 1.7 respectively. The closure of the DISH
Leisure & Hospitality 106,500 109,100 2.5
Network Corporation call center in
Other Services 51,300 51,150 – 0.2
Government 128,300 127,100 – 0.9 McKeesport resulted in 600 layoffs
Notes: Based on 12-month averages through July 2010 and July 2011. Numbers may not and contributed to declines in the
add to totals because of rounding.
information sector, and budget cuts
Source: U.S. Bureau of Labor Statistics
Economic Conditions Continued
3
caused decreases in state and federal shifted away from manufacturing.
jobs, contributing to reductions in the Today, the area is the education
government sector. Growth in the and healthcare center for western
remaining sectors more than offset Pennsylvania, parts of Ohio, and
those losses, with notable expansions northern West Virginia. Since 2000,
occurring in three sectors: education the share of nonfarm payroll jobs in
and health services; logging, mining, the manufacturing sector has declined
and construction; and professional from 11 to 8 percent, and the share
S and business services sectors, which of jobs in the education and health
I
S
Y increased by a combined total of services sector has increased from
L
A 9,375 jobs during the 12 months 17 to 21 percent. Figure 2 shows the
N
A ending July 2011. share of total nonfarm payroll jobs

T in the HMA by sector, and Figure 3
E
At one time, the HMA manufactured
K
illustrates sector growth in the HMA
R
one-half of the nation’s steel supply,
A
from 2000 to the current date. During
M
but, as manufacturing declined during
G the 12 months ending July 2011, the
the 1990s, the area evolved into a so-
N
education and health services sector
I
S called “rust belt.” During this transi-
U expanded by 3,900 nonfarm payroll
O tion, the economic base of the HMA
H jobs, or 1.7 percent, a slight increase

E Figure 1. T rends in Labor Force, Resident Employment, and Unemploy- from the 3,000-job, or 1.3-percent,
V
I ment Rate in the Pittsburgh HMA, 2000 Through 2010 growth during the previous 12-month
S
N
period. Leading employers in the HMA
E 1,320,000 10.0
H
include the University of Pittsburgh
A • COMPRE Labor Force & Resident Employment 11111,,,,,221107272700000,,,,,000000000000000 8642....0000 Unemployment Rate MebWmueerpgdslthio cP,ya weel neCitnshe; A nt1htl1eel,er 3 Ug(0Uhn0eiP nveMmeyr HsCpilt)eoy,a y wloetfhei ts PhS;i yat3tsn6st-d,e7m 00,
P with 10,600 employees (see Table 3).
1,020,000 0.0
h, 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Nonfarm payroll jobs in the education
g and health services sector are expected
r Labor Force Resident Employment Unemployment Rate
u to grow at the same pace during the
b Source: U.S. Bureau of Labor Statistics
s forecast period as during the past year.
t
t
Pi Figure 2. Current Nonfarm Payroll Jobs in the Pittsburgh HMA, By the end of 2011, UPMC is planning
by Sector to add 1,300 jobs and West Penn
Allegheny Health System will start
Mining, Logging, & Construction 5.0%
Government 11.2%
a new medical school. Although the
Manufacturing 7.8%
Other Services 4.5% number of jobs West Penn Allegheny
Health System will add is uncertain,
Leisure & Hospitality 9.6% Wholesale & Retail Trade 15.3%
the school expects to graduate approx -
imately 5,000 physicians a year. In
Transportation & Utilities 3.7% addition, UPMC is currently con-
Information 1.6%
structing UPMC East, a $258 million,
Education & Financial Activities 6.1%
Health Services 21.0% full-service hospital that will add 400
Professional & Business Services 14.0% jobs when it is completed in 2012,
and UPMC Health Plan expects to
Note: Based on 12-month averages through July 2011.
add 300 jobs during 2012 and 2013.
Source: U.S. Bureau of Labor Statistics
Economic Conditions Continued
4
Figure 3. Sector Growth in the Pittsburgh HMA, Percentage Change, 2000 to Current
Total Nonfarm Payroll Jobs
Goods Producing
Mining, Logging, & Construction
Manufacturing
Service Providing
Wholesale & Retail Trade
S Transportation & Utilities
I
S
Y Information
L
A Financial Activities
N
A Professional & Business Services

T
E Education & Health Services
K
R Leisure & Hospitality
A
M Other Services

G Government
N
I – 40 – 30 – 20 – 10 0 10 20
S
U
Note: Current is based on 12-month averages through July 2011. During this period, government jobs showed no net change.
O
H Source: U.S. Bureau of Labor Statistics

E
V
I During the past year, the HMA 12-month period. Growth in logging
S
N became an emerging area for natural and mining is expected to continue;
E
H gas extraction along the Marcellus 16 companies involved in natural gas
E
R Shale, a sedimentary rock formation extraction have announced plans to
P
M that extends from southern New add more than 1,200 jobs in the
O
C York, through western Pennsylvania HMA during the next 4 years. Range

• and eastern Ohio, and into western Resources, a natural gas producer,

A
Virginia. As a result, nonfarm payrolls is currently constructing a regional
P
, in the mining and logging subsector facility and will add 250 jobs by
h
g increased by 25 percent, or 1,600 jobs, November 2011. Chevron undertook
r
u during the 12 months ending July 2011 a $3 million expansion in 2010 and
b
s compared with an increase of 11 per- is expecting to hire 140 employees by
t
t
i cent, or 600 jobs, during the previous the end of 2011.
P
Table 3. Major Employers in the Pittsburgh HMA The professional and business services
sector increased by 4,100 jobs, or 2.6
Name of Nonfarm Payroll Number of
Employer Sector Employees percent, during the 12 months ending
July 2011, up from the 2,700-job,
University of Pittsburgh Medical Center Education & Health Services 36,700
University of Pittsburgh Education & Health Services 11,300 or 1.8-percent, increase during the
West Penn Allegheny Health System Education & Health Services 10,600
previous 12-month period. Of those
Giant Eagle, Inc. Wholesale & Retail Trade 10,400
jobs added, approximately 30 percent
Wal-Mart Stores, Inc. Wholesale & Retail Trade 10,000
The PNC Financial Services Group, Inc. Financial Activities 9,150 were in the professional, scientific,
Westinghouse Electric Corporation Transporation & Utilities 8,000
and technical services subsector, with
The Bank of New York Mellon Financial Activities 7,025
growth attributed in part to natural
Corporation
Highmark Inc. Financial Activities 5,450 gas extraction on the Marcellus
United States Steel Corporation Manufacturing 4,600
Shale. Total nonfarm payrolls in the
Note: Excludes local school districts. professional, scientific, and technical
Source: Pittsburgh Business Times, Book of Lists, 2011
services subsector increased by 1,350
Economic Conditions Continued
5
jobs, or 2 percent, during the 12 During the 3-year forecast period,
months ending July 2011 comp ared nonfarm payrolls are estimated to
with a decline of 1,375 jobs, or increase by approximately 45,300
2 percent, during the same period a jobs. Payrolls are expected to grow by
year earlier. Developments include 1.2 percent during the first year and
Gas Technology Institute’s (GTI’s) increase by an average of 1.5 percent
new Pittsburgh field office, to be annually during the second and third
completed in August 2011. GTI is years of the forecast period.
S a research and development orga-
I
S
Y nization that specializes in energy
L
A production, delivery, and use.
N
A

T
E
K
Population and Households
R
A
M

G
N
I T
S
U he population of the Pittsburgh Approximately 50 percent of the
O
H HMA was estimated at HMA population resides in the

VE 2,357,000 as of August 1, 2011, a Central Pittsburgh submarket, 30
SI decline of approximately 0.3 percent, percent in the Southern Pittsburgh
N
E or 6,475, annually since 2000. The submarket, and 20 percent in the
H
E population decrease resulted from net Northern Pittsburgh submarket as of
R
P out-migration that began during the August 1, 2011. Since 2010, the popu-
M
O 1990s and continued through 2005 lation of the Central and Northern
C
at an increasing rate, from approxi- Pittsburgh submarkets has increased
•
A mately 0.2 to 0.6 percent a year, as by 0.1 percent each, or by an average
P households moved out in response to annual number of 1,250 and 420,

h, the failing manufacturing economic respectively, while the population
g
r base of the HMA. As the contraction decreased by 0.1 percent, or 970, in
u
b in manufacturing slowed and overall the Southern Pittsburgh submarket.
s
t job growth improved, population Net in-migration accounted for all
t
i
P growth gradually moved from annual the population growth in both the
declines of 11,100 people, or 0.5 per- Central and Northern Pittsburgh
cent, from 2000 through 2005 to an- submarkets. Despite the economic
nual increases of 2,075 people, or 0.1 growth resulting from oil extraction
percent, from 2006 through April 1, on the Marcellus Shale, the Southern
2010, the date of the decennial census. Pittsburgh submarket population
Growth since 2006 is attributed to net declined because of net out-migration
in-migration. According to data from and net natural decline (resident
the Internal Revenue Service, approxi- births minus deaths). See Figure 4
mately 70 percent of the in-migration for population and household growth
since 2006 was from adjacent counties in the HMA and Figure 5 for the
outside the HMA, but within Penn- components of population change
sylvania, and another 10 percent from in the HMA from 2000 through the
adjacent counties within Ohio and forecast period.
West Virginia.
Population and Households Continued
6
Figure 4. Population and Household Growth in the Pittsburgh Since 2010, household growth in
HMA, 2000 to Forecast the HMA has remained relatively
2,000 unchanged. On an annualized basis,
1,000 the number of households has declined
0 by 470 since 2010, despite the slight
e
ng – 1,000 increase in the population. In contrast,
a
h
al C – 2,000 from 2000 through 2010, the number
nnu – 3,000 of households increased by 610, or
A
e – 4,000
S ag 0.1 percent, a year, but the population
YSI Aver – 5,000 declined because larger households
L – 6,000
A moved out of the area during the
N – 7,000
A beginning-to-middle part of the decade
– 8,000
T 2000 to 2010 2010 to Current Current to Forecast and younger professionals with smaller
E
K Population Households
households moved in toward the end
R
A Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast— of the decade. See Table DP-1 at
M
estimates by analyst
G the end of this report for household
N
I Figure 5. Components of Population Change in the Pittsburgh growth in the HMA by tenure from
S
U HMA, 2000 to Forecast 2000 through the current date. See
O
H 4,000 Figures 6, 7, and 8 for households by

E 3,000 tenure in each submarket since 2000.
V
NSI nge 2,000 During the forecast period, popula-
E ha 1,000
C tion and household growth rates are
H al 0
E nu expected to improve slightly, both
R An – 1,000
MP age – 2,000 increasing by 0.1 percent, or 1,325,
CO Aver – 3,000 annually as strong economic conditions
• – 4,000 continue during the forecast period.

A – 5,000 The population is expected to reach
P 2000 to 2010 2010 to Current Current to Forecast
2,361,000 and the number of house-
, Net Natural Change Net Migration
h holds is expected to total 1,005,000
g
Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—
r by the end of the forecast period.
u estimates by analyst
b
s
tt Figure 6. Number of Households by Tenure in the Central
i
P Pittsburgh Submarket, 2000 to Current
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2000 2010 Current
Renter Owner
Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by
analyst
Population and Households Continued
7
Figure 7. Number of Households by Tenure in the Southern
Pittsburgh Submarket, 2000 to Current
250,000
200,000
150,000
100,000
50,000
0
2000 2010 Current
S Renter Owner
I
S
Y
L Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analyst
A
N
A Figure 8. Number of Households by Tenure in the Northern Pittsburgh

T Submarket, 2000 to Current
E
K
R 140,000
A
M 120,000
G 100,000
N
80,000
I
S
U 60,000
O
40,000
H
20,000
E
V 0
I 2000 2010 Current
S
N Renter Owner
E
H
E Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analyst
R
P
M
O
C
Housing Market Trends

•

A
P

,
h
g
r
u Sales Market—Central Pittsburgh Submarket
b
s
t
t The sales housing market in the Central conditions remained weak through
i
P
Pittsburgh submarket is currently July 2011. During the 12 months
soft, with a vacancy rate of 2 percent ending June 2011, the most recent
(see Table DP-2 at the end of the data available, existing home sales
report), because the construction of decreased by 17 percent, to 12,600,
single-family homes has exceeded from the 15,100 homes sold during
demand by an estimated 800 units a the previous 12-month period and by
year since 2000. The current weak- 35 percent from the 19,500 homes
ness in the sales market began during sold during the same period in 2006,
2009 as a result of weak economic when sales were strong.
conditions in the HMA and stringent
The average sales price of existing
lending practices. According to data
homes increased by 5 percent, to
from Hanley Wood, LLC, sales of
$158,400, during the 12 months
existing homes during 2009 declined
ending June 2011 compared with
by 28 percent, or 6,000 homes, to a
$150,600 in the previous year. This
total of 15,700 homes sold. Market
Housing Market Trends
8
Sales Market—Central Pittsburgh Submarket Continued
increase was partly the result of a 2010 averaged 1,175 homes permit-
decline in the volume of REO (Real ted annually, down from the 1,775
Estate Owned) and foreclosed homes, homes permitted annually from 2000
which are priced, on average, approxi- through 2007. Based on preliminary
mately $70,000 below other existing data, construction activity remained
homes for sale in the submarket, stable during the 12 months ending
according to data from Hanley Wood, July 2011, with a total of 1,175 single-
LLC. From July 2010 to July 2011, family homes permitted.
S the percentage of home loans that
SI In the city of Pittsburgh, developments
Y were 90 or more days delinquent, in
L under construction include Edgewater
A foreclosure, or in REO declined from
N at Oakmont and the second phase of
A 5.1 to 4.9, according to LPS Applied
Summerset at Frick Park. Each devel -
T Analytics.
E
opment will transform a brownfield
K
R
Approximately 40 percent of single- site into a residential community
A
M
family construction in the HMA is consisting of detached homes, town -

G
concentrated in the Central Pittsburgh homes, condominiums, and apartments.
N
I
S submarket. Single-family home With a total development cost estimated
U
O construction activity, as measured by at $100 million, the single-family por-
H
the number of single-family building tion of Edgewater at Oakmont will
E
V permits issued, slowed during the late consist of 63 detached homes and
I
S
2000s after a period of strong growth 88 townhomes. Construction has
N
E
during the early-to-mid 2000s (see already started and 25 homes already
H
E
Figure 9). Single-family home con- sold. The second phase of Summerset
R
P
struction activity from 2008 through at Frick Park will consist of 200 single-
M
O family homes, both attached and
C Figure 9. Single-Family Building Permits Issued in the Central
detached, with plans to build approx-
• Pittsburgh Submarket, 2000 to 2011

A imately 30 homes a year starting
P 2,000
in August 2011. New single-family
, 1,500
h home prices in both Edgewater and
g 1,000
r Summerset start at $200,000.
u 500
b
tts 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 During the next 3 years, demand is
i estimated for 3,850 new market-rate
P
Notes: Includes only single-family units. Includes data through July 2011.
sales units in the Central Pittsburgh
Sources: U.S. Census Bureau, Building Permits Survey; estimates by analyst
submarket (see Table 1). The 300
Table 4. Estimated Demand for New Market-Rate Sales Housing homes currently under construction
in the Central Pittsburgh Submarket, August 1, 2011 to
will meet a portion of this demand.
August 1, 2014
In addition, some of the estimated
Price Range ($) Units of Percent 32,500 other vacant units in the
From To Demand of Total subm arket may return to the sales
170,000 219,999 390 10.0 housing market and satisfy a portion
220,000 269,999 770 20.0
of the demand. Demand is expected
270,000 319,999 960 25.0
to be stronger during the second and
320,000 369,999 770 20.0
370,000 419,999 580 15.0 third years of the forecast period and
420,000 and higher 390 10.0
greatest in the $270,000-to-$319,999
Note: A portion of the estimated 32,500 other vacant units in the submarket,
price range (see Table 4).
as well as the 300 units currently under construction, will likely satisfy some
of the forecast demand.
Source: Estimates by analyst
Housing Market Trends
9
Central Pittsburgh Submarket Continued
Rental Market—Central Pittsburgh Submarket
The Central Pittsburgh submarket From 2000 through 2006, in the
rental housing market is slightly soft, Central Pittsburgh submarket,
but improving. The overall rental multifamily construction activity, as
vacancy rate is currently estimated measured by the number of multifam-
at 7 percent, down from 8.9 percent ily permits issued, averaged 1,025
in 2010 (see Figure 10), because the units annually, before declining to
S renter household growth within the an average of 370 units permitted
I
S
Y submarket exceeded the development a year from 2007 through 2010 as
L
A of rental properties. The apartment a result of more stringent lending
N
A market is tighter than the overall standards that limited development

T
rental housing market. According (see Figure 11). During the past
E
K
R to data from Reis, Inc., during the sec- year, multifamily development has
A
M ond quarter of 2011, the apartment increased slightly despite tight lending
G vacancy rate averaged 3.9 percent, practices. According to preliminary
N
decreasing from 5.6 percent during estimates from the U.S. Census
I
S
U the second quarter of 2010. Average Bureau and data from the Downtown
O
H rents for all apartments increased by Partnership of Pittsburgh and the

E 2 percent, to $850, during the second Urban Redevelopment Authority
V
I quarter of 2011, and rents for Class A of Pittsburgh, approximately 430
S
N
E units increased by nearly 5 percent, to multifamily units were permitted
H
$1,075, compared with rents during during the 12 months ending Ju1y
E
R
P the second quarter of 2010. 2011, up from the 350 units permitted
M
during same period in 2010. Since
O
C Figure 10. Rental Vacancy Rates in the Central Pittsburgh 2000, approximately 90 percent of
• Submarket, 2000 to Current
the multifamily development in the
A
P 10.0 8.9 8.9 submarket has consisted of apart-
, 8.0 7.0 ments. During the past 5 years, the
h
g 6.0 submarket underwent approximately
r
u 4.0
$400 million in redevelopment,
b
2.0
s
t transforming industrial manufactur-
t 0
i 2000 2010 Current ing areas into residential communities
P
Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by for young professionals. Recent
analyst
apartment developments within the
Figure 11. Multifamily Building Permits Issued in the Central city include conversions from existing
Pittsburgh Submarket, 2000 to 2011 manufacturing and commercial
1,400 structures, which added more than
1,200 900 new rental units to the market.
1,000 Since 2010, commercial-to-apartment
800 conversions have included Market
600 Square Place, a 46-unit complex
400
completed in 2010, and River Vue
200
Apartments, with 218 units currently
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 under construction. In addition, the
second phase of The Cork Factory,
Notes: Includes all multifamily units in structures with two or more units.
Includes data through July 2011. with 96 units, and Locomotive Lofts,
Sources: U.S. Census Bureau, Building Permits Survey; estimates by analyst with 32 units, will total $8 million in
Housing Market Trends
10
Rental Market—Central Pittsburgh Submarket Continued
redevelopment in the submarket. Both construction, along with the existing
projects are expected to break ground inventory of units available for rent,
in September 2011. Average asking is sufficient to satisfy rental housing
rents for newly constructed efficiency, demand in the submarket during
one-bedroom, and two-bedroom the first year of the forecast period.
apartments start at $900, $1,100, and Demand is expected to be stronger
$1,300, respectively. during the second and third years of
the forecast period. Table 5 shows
During the forecast period, demand
S estimated demand by rent level for
SI is expected for 1,500 new rental units
Y new market-rate rental housing in the
L in the Central Pittsburgh submarket.
A submarket during the forecast period.
N The 700 rental units currently under
A

T
E Table 5. Estimated Demand for New Market-Rate Rental Housing in the Central Pittsburgh Submarket,
K
August 1, 2011 to August 1, 2014
R
A
M Zero Bedrooms One Bedroom Two Bedrooms Three or More Bedrooms

G Monthly Gross Units of Monthly Gross Units of Monthly Gross Units of Monthly Gross Units of
N
Rent ($) Demand Rent ($) Demand Rent ($) Demand Rent ($) Demand
I
S
U 900 to 1,099 55 1,100 to 1,299 300 1,300 to 1,499 570 1,600 to 1,799 140
O
H 1,100 to 1,299 20 1,300 to 1,499 110 1,500 to 1,699 200 1,800 to 1,999 50
1,300 to 1,499 5 1,500 to 1,699 20 1,700 to 1,899 40 2,000 to 2,199 10
E
V Total 80 Total 430 Total 810 Total 200
I
S Note: A portion of the 700 units currently under construction may satisfy some of the forecast demand.
N
E Source: Estimates by analyst
H
E
R
P Sales Market—Southern Pittsburgh Submarket
M
O
C The sales housing market in the in 2006, when the sales market was

• Southern Pittsburgh submarket is soft. strong. Although the number of sales
A
P The current estimated vacancy rate for existing homes was restricted,

, is 1.7 percent, down from 1.9 percent the average price was greater than
h
g during 2010, because the decline in it was the previous year. During the
r
u single-family construction activity 12 months ending June 2011, the
b
s and the reduction in existing inven- average price of an existing home
t
t
i tory, resulting from homes shifting to increased by 6 percent, to $152,700,
P
the rental market, offset the decline in from $144,600 during the previous
owner households (see Table DP-3 at 12-month period. From July 2010 to
the end of the report). The reduction July 2011, the percentage of home
in the number of owner households loans 90 or more days delinquent, in
by an annualized 0.8 percent, or foreclosure, or in REO was nearly
1,875 households, since 2010, along unchanged, declining from 5.5 to 5.4
with tight lending practices, has led percent, according to LPS Applied
to a decline in existing single-family Analytics.
home sales. According to data from
Single-family home construction
Hanley Wood, LLC, 410 existing
activity, as measured by the number
single-family homes sold during the
of single-family building permits
12 months ending June 2011, down
issued, began to slow in 2005, with
from 1,370 homes sold a year ago
1,725 homes permitted that year
and well below the 2,150 homes sold