Is Pittsburgh the best real estate investment market in the US?

This is a difficult question due to the many factors that can affect any market. But let’s look at a few of the reasons I personally love this real estate market.

First off, the average home price in Pittsburgh is lower than the national average. According to the National Association of Realtors latest report, the US national average median sale price of existing homes is $200,500. Pittsburgh’s median sale price is only $122,700. These figures are from the 2008 third quarter data from the NAR. What does this mean to investors? While first off it shows that since prices are more affordable in Pittsburgh that not only is it easy home buyers to afford to buy properties, it also reduces the barriers to entry (namely cash) for the average investor. Additionally, it’s much easier for investors who are interested in rental properties to find cash flow positive units, due to the lower than average costs when buying.

Home valuations are also less volatile in the greater Pittsburgh area. Looking at a Home Value Index provided by Zillow.com, a site that tracks regional sales figures, you see that although Pittsburgh’s home values have not grown at the same rate as the rest of the country during the most recent housing boom, we also have not had the same degree of down turn most of the country is feeling also. This information helps investors feel more comfortable about the long term growth prospects of the region and perhaps eases the fears of steep and drastic valuation decline in the short term. Of course historical data is simply that, historical, but looking at this chart and seeing less volatility in Pittsburgh's home values makes me feel more confident in my investments.

Pittsburgh Real Estate

Another point to consider is that Pittsburgh also has a lower than average unemployment rate. While unemployment is continuing to rise nationally and here at home, Pittsburgh still enjoys a slightly healthier job marker than most. According to Jan 2009 data recently released by the Pennsylvania Department of Labor and Industry, the seasonally-adjusted unemployment rate of 6.3 percent for the seven-county Pittsburgh area was still below both the state's rate of 6.7 percent, and the national rate of 7.2 percent. Most surprisingly was that Allegheny county had one of the lowest rates in the state at 5.9 percent. Obviously lower unemployment rates suggest that the area’s economy has not been hit as hard as the rest of the country during this economic down turn. Additionally, it’s easier to sell or rent property to people with good jobs and sustainable incomes.

With Pittsburgh's lower than average home prices, lower unemployment rate and historically less volatile home prices is this the best real estate market in the Nation? Perhaps... I personally think that when looking for a perfect place to invest my money, I really don't need to look far beyond my own back yard.

Thanks.

Chuck Conto