Plan on a strong year for the local real estate market in Western Pennsylvania, even though the first quarter was slightly slow. At Northwood Realty Services, we are constantly assessing conditions that indicate what we can expect to happen in the market. In April, I provided an analysis of the first quarter and took a look ahead for the rest of 2016. Here are highlights:
- While real estate sales in Western PA were down slightly in the first quarter 2016 over last year, we believe mortgage rates will continue to stay relatively low. We see that as a positive factor for the rest of the year.
- We estimate two .25% rate increases by the Federal Reserve this year, most likely coming in June and late fall. Slight rate increases often motivate people to buy more quickly, as they don’t want to lose an opportunity for a good rate.
- We also see indicators of positive wage growth, which is a huge component of real estate sales. Combining higher wages with a reduction in gas prices means people have more income to spend on housing.
- Home prices in the market continue to remain stable and are very affordable, based on ratio of price to local income.
- Higher priced homes saw a decline in sales during the first quarter of 2016, but we expect more demand in the luxury home market by the second quarter.
- Given all these factors, we project that the region’s overall home sales will be up about 5% over last year in the second quarter.
Read the full press release here.