Wednesday, January 19, 2011

Allegheny County Home Price Paradox

As home prices fell across the nation, Allegheny County saw a 23% increase in both median and average prices from December 2008 to December 2010. On the other hand, prices were down in Butler and Westmoreland counties; stagnant in Beaver; and up just 6% in Washington.

The first-time homebuyer tax credit is NOT the reason for the significant increase—it hadn’t started in December 2008 and was over by December 2010. Daniel Murrer, Vice President of RealSTATS, says the reasons for the rise and why it’s confined to Allegheny County are not yet fully understood. He notes that density is higher—60% of the five-county market—and rising gas prices may push buyers to Allegheny County, increasing demand and prices.

Murrer says sales over the next few months will be down compared to 2010 figures when the tax credit was in effect, so it will be fairer to compare to prices two years ago.

Murrer says, theoretically, property reassessment in Allegheny County should have zero impact because taxing authorities will adjust their rates to keep taxes from going up.

Meanwhile, housing starts across the country for December were fewer than expected

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