This is some research I did a while back about the ‘Burgh. I have learned many new things about the market – most of which are very good!
- Pittsburgh ranks #5 on Marcus & Millichap’s list of high-yield multifamily markets.
- Pittsburgh’s unemployment rate (4.7%) has dropped by 17.5% over the past 5 years.
- Pittsburgh is experiencing a demographic shift. Their millennial population has seen a 25% increase over the last 5 years and the baby boomer population has grown by 13%. These two demographics are projected to be long term renters which will help keep vacancy rates low for years to come.
- In recent years, Pittsburgh has become a tech hub in its own right, attempting to create a dynamic job market similar to Silicon Valley.
- Pittsburgh is home to many major universities, including the rapidly growing Carnegie Mellon University which is “at least partially responsible for Pittsburgh’s growth, from revitalized neighborhoods to a vibrant and booming restaurant scene.” Carnegie Mellon creates “$2.7 billion in economic impact each year”. Marcus & Millichap’s report also mentions the importance of universities to Pittsburgh’s rental market, “The considerable number of universities in Pittsburgh will provide a diverse hiring pool for the area’s growing tech sector in 2017 and beyond. The metro’s unique road system has attracted companies, including Uber, to test new automated car technology, bringing many high-paying jobs to the area.”
- Marcus & Millichap bullishly forecasts continued increase in rents due to stronger demand and higher incomes. The analysis also reports that new multifamily development will “remain near the average recorded over the past five years.”
- Integra Realty Resources’ 2017 Commercial Real Estate Trends Report ranks Pittsburgh #2 on its Top Markets by Multifamily Transaction Volume Based on YoY Change.
- Pittsburgh’s rental vacancy rate has declined by 25% over the last five years.
- Pittsburgh is booming with developments (see reference #6), “there is no better place to be a developer right now than in Pittsburgh. If you look at the demographics of the city, we’re not growing but we’re rapidly changing.”
- Large institutional money has not found the Pittsburgh market yet. Most owners are local and therefore “hot” money or out of area players are not yet chasing Pittsburgh assets, thus keeping prices favorable.
- United States Census Bureau
- Marcus & Millichap 2017 Multifamily Investment Forecast
- 2017 Commercial Real Estate Trends Report by Integra Realty Resources