Region home sales drop sharply
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Home sales in the Pittsburgh metropolitan area fell 35 percent last month, marking the contrast to a sharp increase in first-time homebuyers seen rushing to get a special tax credit in November 2009.
Sales in the five-county area that includes Allegheny, Beaver, Butler, Washington and Westmoreland counties fell by 900 homes last month, dropping from 2,531 in November 2009 to 1,631 in 2010, according to RealSTATs, a local real estate information service.
"A lot of people were rushing to buy last November to get that [$8,000 first-time home buyer] federal tax credit," said Dan Murrer, vice president of RealSTATs. "It created an artificial high. November last year to November this year is not a level playing field."
He said a more realistic comparison would be between November 2008 and November 2010.
"Looking at it that way, home sales in the five counties are down only 10 percent."
Tighter lending guidelines combined with lower consumer confidence continue to make homebuying a harder decision for people who are on the fence.
Howard "Hoddy" Hanna III, chairman and CEO of O'Hara-based Howard Hanna Real Estate Services, the largest full-service real estate company in Pennsylvania and Ohio, said the lower November sales numbers should not cause too much concern.
"The No. 1 thing you have to realize was November 2009 was a huge closing month locally and nationally to qualify for the federal tax credit," Mr. Hanna said. "Originally, it had been the deadline month but Congress ended up extending the tax credit for seven more months."
Some counties fared better than others last month but all saw a significant decline in home sales.
Allegheny took the hardest hit, with a 41.4 percent year-over-year drop. Washington County held up better than all counties with a 15.6 percent drop in sales.
Home sales in Beaver County fell 31.8 percent, followed by Westmoreland at 29 percent and Butler County with a 28.2 percent decline.
While home values have been falling across the nation, prices for residential properties in the Pittsburgh market rose even as the number of homes sold here declined.
The region's median home price rose 4.3 percent, from $115,000 in each of the last two Novembers to $120,000 last month. Average home prices rose 3.7 percent, from $138,907 last year to $151,556 last month, according to RealSTATs.
A positive sign can be seen in the improving market for new residential construction.
The region's homebuilders managed to raise their year-over-year income in November 2010 by collecting $41.5 million in revenue, up 2 percent from the $40.7 million earned in November 2009.
The increase is partly due to a 13.3 percent increase in the median price of a new home to $275,000, despite an 8.4 percent drop in the number of units sold, from 154 in November 2009 to 141 sold last month.
"It appears new construction is faring better than the market overall," Mr. Murrer said. "With new construction, you hit a different demographic, which is a stronger demographic.
"People in that demographic are more immune to a bad economy," he said. "Their wallets are fatter."
First Published December 16, 2010 12:00 am