Millennials buying more homes

When Matt Stephens graduated from Pitt last year, he knew he wanted to stay. Now, almost a year later, he’s looking to buy a house.

“I decided to stay because a lot of my friends are still out here, and it’s a wonderful place to live,” Stephens, originally from Annapolis, Maryland and who now lives in the South Side, said.

As a millennial, Stephens belongs to a group — especially in the United States — that fears commitment and often chooses to rent houses, rather than buy.

But Stephens is one of about 12 percent of millennials buying and considering buying homes in the Pittsburgh region — a number below the national average of one-third, but one that, according to a December 2015 National Association of Realtors prediction, is set to rise. This, in part, is because more young people are staying in the city and home prices have stayed relatively low compared to national averages.

NAR’s assessment, based on a combination of millennial population, employment growth and housing affordability, pegs Pittsburgh as a growing hot spot for millennial homebuyers.

In a separate NAR report about generational home buying trends, millennials made up the largest group of homebuyers in 2015 at 32 percent.

“We’ve seen an influx in Wilkinsburg and of course you’re seeing it in central Lawrenceville,” Greg Whitted, board of directors chair for Pittsburgh Housing Development Association, said. “But in our neighborhood of Wilkinsburg, we’re seeing a resurgence of interest in that area.”

For Stephens, a stable job market and an already-established group of friends convinced him to stay in Pittsburgh after graduation.

“I’m not from a city, so I think there’s just more opportunity here,” Stephens said. He now works for Carnegie Mellon University’s admissions office, pre-reading prospective student applications.

The rise in young people choosing to buy homes in Pittsburgh is due, in part, to the number of college graduates who stay in the city. According to Laura Glover, data coordinator with Pitt’s career development center, 49 percent of graduates from the class of 2014 remained in the city following graduation. For those graduates, the top three workplaces included UPMC, the University of Pittsburgh and BNY Mellon.

“The city of Pittsburgh and the surrounding region is experiencing an economic rebirth, and there is a lot of opportunity in a variety of industries in Pittsburgh,” Glover said in an email.

Lynne Bingham, a real estate agent with Howard Hanna, said she has noticed a similar trend in young people buying homes, even in a higher price range. Bingham said high-profile companies like Google, Uber and PNC Bank have offered young people jobs, causing them to stay.

“I’ve noticed that [more millennials are buying homes], with a lot of the high-tech companies that have come in town, and PNC has done a lot of hiring,” Bingham said. “Those kind of anchors that we have in Pittsburgh are actually bringing the millennials back in.”

Pittsburgh’s low cost of living attracts millennials into the city, Bingham said.

“The good and the bad: Our cost of living is very low in Pittsburgh, our taxes are very high,” Bingham said. “But as far as the properties — the value of properties — our properties are extremely low comparatively speaking.”

The current national median cost of a house is $281,500, a value that’s increased by 37 percent since 2010. Pittsburgh, however, has a median price of $145,000, according to the real estate website Trulia. The National Realtor assessment expects this price to increase as more millennials buy homes.

Chelsea Strub, a 2013 graduate who is looking to buy a house with her boyfriend in Mount. Washington, said Pittsburgh’s lower costs a draw toward buying.

“But also it was just the cost of living,” Strub said. “I could live on my own pretty easily. My first apartment, that was on my own outside of Oakland, was in South Side. I paid, it was like $500 a month.”

Although many graduates might not be able to afford a home initially, it’s easier in Pittsburgh where the cost is far lower than in large cities like New York City or Washington, D.C., Strub said.

In Pittsburgh, the average cost of living is about 20 percent less than New York City, according to Numbeo, a website that, in part, calculates cost of living and property values in the United States.

Although Strub and her boyfriend’s Mount Washington rental is in a convenient location, a house is more suited to their current needs.

“I mean we’re still trying to build a credit score to be able to afford a mortgage, or things like that, but we are looking for a house that’s more like a project house,” Strub said.

The PDHA works specifically with first-time homebuyers in the Wilkinsburg area. Over the past five years the group has seen an increase in the number of millennials purchasing homes.

Although real estate groups cannot share specific data on the ages of homebuyers because of privacy concerns, both the PHDA and Bingham have noticed a trend of more young, first-time homebuyers.

South Side and Lawrenceville have become magnets for first-time homebuyers, Bingham said. She’s also noticed growth Downtown as more housing options have become available.

Whitted said the PHDA has seen growth in the number of millennials they’re working with and the number of houses the young generation is buying.

“Our real estate market is one of the soundest in the country, and it’s also one of the most fair values in the country,” Whitted said.