We all watched in amazement as the real estate market embarked on a wild ride post-pandemic across the country. Things went a bit haywire in Pittsburgh, too, with realtors seeing 10 bids or more for properties that were well over listing price. If you were selling a home, the pot of gold at the end of the rainbow might have come your way. Buyers, however, had to spend more than anticipated to be competitive in the whirlwind market.
Although things have settled down a bit, the real estate market remains complicated. “After record sales in 2021, record prices and historically low interest rates (2.25 percent at the end of 2020), this year none of it makes sense,“ said Julie Snider of Achieve Realty.
Despite 2022’s strong start for sellers, as interest rates began to creep up, the market slowed down. “Perception is that the interest rates are so high now that no buyer is going to buy,” said Snider. “But that’s not correct. There are still potential buyers out there needing to purchase homes. Perhaps they’re moving from one location to another or just need a bigger space. Whatever the reason, they’re looking.”
Award-winning realtor Zita Billmann agrees. “I think the market has shifted and changed a bit, yet that’s typical of this time of year going into fall,” she said. “There are still potential buyers like empty nesters looking to downsize, first-time home buyers and couples getting married next year.”
Low inventory, however, remains a concern. To sellers reluctant to place their homes on the market right now, Billmann offers the following advice. “It’s still a good time to sell because buyers still very much want to buy and would love to buy in a more normalized market where there aren’t 10 bids on one property; they want to buy smart. The past market hasn’t afforded these buyers the opportunity to do that. Now, we’re getting back to a normalized market and that’s not bad.”
Buyers were perhaps the most affected by the recent real estate roller coaster. “Some buyers made five or six offers on houses and never won the bid; they’re frustrated and exhausted,” said Billmann, noting that now buyers aren’t buying at the same frantic pace.
“For the first time in a long time, I had clients—first-time home buyers—that bought a little house on the Northside and were able to negotiate a $10,000 price reduction from the list price,” said Snider. “The buyers were also able to negotiate a home inspection to resolve some pretty serious issues that needed to be fixed right away. It’s nice to see buyers having the ability to purchase and negotiate now.”
Many see rising interest rates as a problem for the market, but both Billmann and Snider believe that the rates are normalizing. “Interests rates are higher, but they’re still low compared to rates in the ‘80s or ‘90s where the rates were often 10 percent or higher,” said Snider.
“These are normal rates leading to a normalized market,” said Billmann. “Don’t be afraid of it; rates will drop down again, and everyone will refinance for adjusted rates.”
Snider believes that one of her friends has the right idea. “She always says, ‘Marry the house, date the rate,’ and I think that’s excellent advice,” she laughed.
Although both realtors realize the increase in rates is sometimes off-putting, they still believe it’s a good time to buy and sell. “Mortgage lenders will get creative offering different programs and incentives to buyers,” explained Snider. “Smaller local banks are always coming out with ways to help buyers in this type of market.”
Rates will fluctuate, but what about those higher real estate prices? Many believe that in some parts of the country, the real estate prices have risen to such a high level that a bust is inevitable. But Pittsburgh’s market is different.
“Pittsburgh has desperately needed this increase in value for every homeowner out there for years,” said Billmann. “Previously, it would take 15 years to grow your value, requiring homeowners to stay in their homes for a long time to realize a profit. Now, people are making as much money in two years.”
Both realtors agree that now is a good time for both sellers and buyers in the Pittsburgh market. “With the continued shortage of homes on the market, prices aren’t likely to drop substantially,” said Snider. “But Pittsburgh is still a very affordable place to live.”