Pushed by the federal government's tax credit for first time buyers and a growing pool of investors, Pennsylvania housing markets are projected to pull out of the national downturn earlier than many other places in the U.S.
A growing number of retirees moving to the state are also adding to the early turn around in housing, which isn't yet a full-fledged recovery in Pennsylvania. However, the state's residential markets are strengthening. As home sales inch upward, the prices on homes and condos should follow suit.
The key driving force behind Pennsylvania's come back is affordable housing. Home prices inflated during the national real estate boom, but not at double digit rates of appreciation, which at least to a large degree will protect housing values from falling much more.
Pittsburgh's elderly population, composed of a large number of retirees provides stability for the marketplace. The state has the lowest percentage of under-water mortgages in the country. Home sales in Pittsburg rose as a result of the first time buyers' tax credit, and should be aided in the first half of the year as a result of the program. Average housing values are forecast to rise a minor 2.3% for the year.
| City |
Forecast |
| Philadelphia |
2.7% |
| Pittsburgh |
2.3% |
| Allentown |
1.6% |
| Erie |
1.8% |
The eight counties that make up the Philadelphia metro region boomed during the national upturn with new housing developments and a wide addition of new commercial buildings. In the aftermath, sluggish home sales were boosted by the federal tax credit to over come a late downturn in the market.
The fallout from the financial crisis should just about be over in the City of Brotherly Love as the expansion of the federal government stimulus package begins to push the market forward with a new provision to provide the tax credit to move-up buyers. Philadelphia is forecast to see average housing appreciation of 2.7% by year's end.
Allentown rode the wave of prosperity that was ushered in by the real estate boom. But a growing number of foreclosures are beginning to weigh on the market, and are expected to have a negative impact in the first half of the year as unemployment rises. Jobs are the most important single factor when it comes to housing markets and with increasing employment losses Allentown will have a rough patch. But the expansion of the federal tax credit should help in the city's recovery. Allentown housing is forecast to inflate a slight 1.6% in 2010 as home sales increase.
Upstate in Erie, the government tax credit hasn't yet propelled home sales much. But the weakened state of Erie's economy, which depends highly on its manufacturing base of jobs, is likely to be boosted by the expansion of the tax incentive to move-up buyers. Home sales are projected to rise as a result in the first half of the year and forecast to see average housing prices up 1.8% in 2010.
