Residential housing in the Pittsburgh region staged a strong rebound in 2012 from the low point following the nationwide housing crash. While the average sales price here did not drop significantly during the downturn, the total volume and number of home sales had been on a downward slide.
But in 2012, the number of homes sold in the five-county region that includes Allegheny, Beaver, Butler, Washington and Westmoreland counties jumped to 26,628, the highest number since the local market took a dive in 2009 and only 24,014 homes were sold, according to RealSTATs, a South Side-based real estate information company.
Last year, the average home price of $166,336 also was 12 percent higher than in 2009 when the average price fell to $147,744.
Howard "Hoddy" Hanna III -- in his role as chairman and CEO of Howard Hanna Real Estate Services, the largest full-service real estate company in Pennsylvania and Ohio -- watches the trends closely.
He believes there were three reason for the 2012 turnaround: interest rates that "are too good to be true"; a rebound in consumer confidence sparked by job stability and a vibrant stock market; and "the tremendous pent-up demand" from people who had taken themselves out of the housing market.
"We are in an interesting period right now because in most of the neighborhoods there is such a shortage of houses for sale that houses are selling very, very quickly," he said.
Mr. Hanna said inventory is down because new home construction, which typically makes up 10 percent to 15 percent of houses for sale, has dried up as a result of builders struggling to get financing.
"Traditionally a builder would build four or five houses a year. They would go to the local community bank they've been going to and the banker knew them and had no problem lending to them because they had a track record," he said.
"Well, now if they don't meet certain ratios of cash in the deal or certain ratios of income they have earned in the past and [cash] reserves, they can't get financing. A loan a bank could do five years ago ... they are prohibited from doing today."
Mr. Hanna credited the improved foreclosure climate for at least some of the rebound in the housing market.
He said the Obama administration's actions to halt a lot of the robo-signings, or automated approvals, that were being done by banks slowed the number of foreclosure properties coming into the marketplace, "which I think did more to stabilize the market than anything else that occurred."
What "was happening is, in all markets you had these foreclosures and short sales that were flooding the market, and so it would bring the prices down automatically in the neighborhood," he said. "If you have a foreclosure on your street and the foreclosure is priced at $125,000 and the house is worth $200,000, then your house value goes down. You look at comparables."
The 2,428 foreclosures recorded last year in the five-county area was 40 percent lower than the 3,991 foreclosures recorded here in 2008, according to RealSTATs.
Mr. Hanna expects the housing rebound will continue this year, first with sellers.
"My projection is that the listings will start to pick up when people start seeing what the houses are selling for in their neighborhoods. When they start to see that prices are going up, they will think it's a good time to sell."
In 2012, Howard Hanna Real Estate Services recorded 41,348 closed property transactions and $7 billion in sales volume compared to 34,292 transactions in 2011 on sales volume of $5.8 billion.
Mr. Hanna said last year roughly 35 percent of his buyers were first-time buyers and he is confident that number will spike to at least 45 percent this year.
"You've got empty-nesters, people transferred in. You've got people buying up in their housing. Then you've got first-time buyers. I think the first-time buyer market will be close to 50 percent this year."
He also said that while 30 percent to 40 percent of the population will always choose to rent rather than own, "Homeownership is still what people want in this country."
"There's enough first-time buyer types who are in a rental paying $1,500 a month. They've got one child and are looking at what they could get for a mortgage for that kind of money."
Tim Grant: firstname.lastname@example.org or 412-263-1591