3rd Quarter Downtown Housing Report is out

[tooluther]

The Downtown Living Initiative (with the help of Mellon, Integra Realty Resources and L Development/Consulting) have published their 3rd quarter market survey of downtown housing

3rd Quarter Market Survey

snap shot:

rents average $1.27/S.F.

Occupancy is at 97.7%

Over 2,000 new units comming online in the next 2 years (that does not even include projects announced since October!)

[blueblackcat]

Washington Plaza may still bill itself as up scale, but truth of the matter is once City Line closed, it was taken over by students.

That being said, Gateway Towers, 151 First Side, The Caryle, Encore on 7th (rentals), and future projects like Caryle II, 8th Street projects, and obviously Piatt Place are certianly not "laughable." We're talking 3 Million dollar penthouses in some of those projects!

as per rents...please see my new thread

This is a 1.2 million dollar luxury property in Las Vegas.

http://msnbc.msn.com/id/9870962/

The high price of the very few high-end residences Downtown has as much to do with high demand as with quality. If it was in fact the case that Pittsburgh had adequate high-end housing then this 2,000 unit boom thats not far from doubling Downtown population wouldn't have such a high rate of pre-sold units on the high-end. And with as many people who want to live Downtown as there are, it alarms me that a lot of the available spaces belong to much wealthier people from other cities who just want a fancy place to stay when they fly in to the city for a night or two.

All I'm saying is we won't find a real shortcut for younger college grads to start moving in just yet. They are being crowded out by wealthy folks whether the homes are luxury or not. Building "affordable" housing at this point would just create a big pricing mess by not allocating resources efficiently. I do really want to see this new development trend to continue next year and the year after, and by then hopefully start serving the college grads that Pittsburgh needs to serve better.

Btw rental rates aren't a good indicator of the overall housing stock.

[tooluther]

Btw rental rates aren't a good indicator of the overall housing stock.

how?

[mjcatl2]

how?

If rents head south, then there are too many units available, if they go up, then there is more demand.

[blueblackcat]

If rents head south, then there are too many units available, if they go up, then there is more demand.

Rentals are about half of the total units in the city. We have roughly 300 houses being condemned every year in Pittsburgh with a backlog of 1000 waiting to be demolished. Even more are abandoned, even more are just vacant. The way I see it a big problem is that a lot of the properties are just really old, and cost more to maintain than they are worth. A lot of those vacant properties are sitting there in disrepair and taking on damage until they finally get condemned. But none of this gets counted as part of the rentals market. Some of these properties would cost more to fix than anyone would ever pay to rent them out, even if they were rented out in the past.

The difference between rentals and owner-occupied housing is that landlords have an incentive to get out of the rental market if their property sits vacant for an extended amount of time, ensuring that the overall market has a high occupancy rate. Rental rates might actually be lower if the rental market is large and has a high turnover rate, where any individual property might not have to sit vacant for very long at all. Looking at the difference between average asking price for vacant apartments and average rents paid, I don't think that's the case in Pittsburgh. Rental rates can also be lower if a lot of development and rehab is going on, maybe with property managers trying to stay ahead of an anticipated growth in demand. Rental rates can also be lower if the owner-occupied side of the housing market is heating up because of low interest rates. On the other hand if just considering Downtown by itself, we do have lots of signs of high demand and an explanation for why rental occupancy rates are so high. But without seeing it in context of the trends in the entire housing market, rental rates by themselves don't say too much.

[tooluther]

Rents in this case are inportant because new developers will not launch new projects unless they are sure they can get 1.00/S.F. In a downtown setting the costs of development/redevelopment are so high that that's usualy the min. for a project to go forward. So high rents, in additional to high occupancy and low turn over, in this case is a good indication that the downtown market is capible of supporting more development.

[SouthJersey7]

Pittsburgh is one of my top priority places I'm thinking about moving to. although this wouldn't happen for about 3 or 4 years. But after reading this it sounds like I may want to look elsewhere than downtown. I'd like to find an area if not in downtown, then close by with easy access.

[blueblackcat]

Pittsburgh is one of my top priority places I'm thinking about moving to. although this wouldn't happen for about 3 or 4 years. But after reading this it sounds like I may want to look elsewhere than downtown. I'd like to find an area if not in downtown, then close by with easy access.

That's easy! You have plenty of options. I live on Mt Washington, which overlooks Downtown with amazing views and is within walking distance thanks to the inclines. I've walked to Downtown plenty of times. You also have the South Side, which is a more lively place than Downtown anyway, and Shadyside isn't but a couple minutes away either. It really depends on what you're looking for, the options are actually pretty varied and getting moreso. I think Downtown is moving in the right direction so if you're talking about 3 or 4 years then take a serious look at it then. By then, the new T tunnel under the river to the North Shore will be about finished, so you'll also have that area as an attractive option, 1 minute from Downtown. I've always wanted to live Downtown, but my needs are to have a car and plenty more storage space for military gear that the average single guy wouldn't have, plus a garage for my motorcycle, and I'm paying for college. So, Mt Washington is where I seem to be able to make ends meet. I also like it because it's secluded in the sense that it's more of a tourist scene than a college scene, so there aren't drunk frat boys to push over your motorcycle like what happened when I lived in Oakland.

[PghUSA]

Dead, in 3-4 years you will be dealing with (hopefully) a much more mature real estate market downtown . . . I could very easily see some of the few high end condos now coming down in price as newer, better and more technologically advanced condos come online by 2009, 2010.

Just compare downtown in 2005 to downtown in 2001, and think about the night and day difference.

[SouthJersey7]

Thanks for the responses. I hope to be visiting Pgh sometime this year, and will be checking out the mentioned areas. The more I hear about the 'Burgh the more I like!

[PghUSA]

Depending on how you want to visit, I'd watch out for the ASG week, then again you might love the crowds and out-of-towners all experiencing the magic of this town with you! Just watch the airfare, something tells me the carriers aren't looking for giving discounts with demand spiking to PIT.