For Ryan and Candace Hipple, selling their South Side home in May for more than the asking price in a single day was the easy part of their plan to relocate from one neighborhood to another in the Pittsburgh region’s hot real estate market.
Things aren’t going as smoothly on the buying side.
The family of three is still living in temporary housing five months later — longer than they thought it would take to buy a home in the Mt. Lebanon School District. They’ve lost one bidding war after another for about a half-dozen homes, even after offering up to $75,000 over asking prices.
“It doesn’t get easier when we lose,” said Candace Hipple, a 36-year-old nurse anesthetist at Children’s Hospital. “At this point, we go into every house thinking we are not going to get it, so that it’s a little easier to accept when you get the letdown and have to start all over again.”
Only one winner can emerge from the bidding wars that have become common here and nationwide due to the inventory of houses for sale being too low to meet the demand.
Yet the feeding frenzy around real estate that broke out during the peak selling season this spring has calmed down a bit, real estate professionals report.
That’s only because more people are giving up, they say.
The single most significant change in the Pittsburgh region’s housing market in the last six months is the fact that there are fewer buyers now.
Some got fed up with the stress and either stopped looking or decided they aren’t willing to pay inflated prices. There’s less competition now. But the market itself is showing no other signs of slowing down.
Home prices in the most desirable school districts and neighborhoods are higher than they were in the spring, and in most cases homes are selling even faster.
The housing boom has pumped up prices across the region. All of the counties around Allegheny County, including Butler, Beaver, Washington and Westmoreland, have seen an average 6.75% increase since April, and listings are selling 54.55% faster than in April, according to Trendgraphix, a Sacramento, Calif.-based company that analyzes real estate data.
“Where the slowdown, or the feeling of a slowing, is happening is the fatigue in the market that began to set in around June or July this year,” said Howard “Hoby” Hanna IV, president of Howard Hanna Real Estate Services.
He said real estate agents got frustrated after making multiple offers for their buyers and not getting the offers accepted. And buyers began pulling themselves out of the market.
“So, today we don’t have 20 people making an offer on a house. We have five people making an offer,” Mr. Hanna said. “It’s still like no market time I have ever been in in my 30 years in the business.”
Mike Netzel, a team leader at Keller Williams Realty in Pine, knows some buyers who have moved to the sidelines for now. But they’re not out of the game for good.
“A home is a very emotional purchase, and the disappointment in losing a home can cut deep,” Mr. Netzel said. “Usually more than one person agreed on this house where life would begin together. And maybe it’s in the school district they want for their children to attend — children they may not even have yet.
“Maybe it’s where someone’s life will begin after it’s been torn apart,” he said. “A home is not just a transaction for the person buying it. There are dreams attached to that.”
Creative offers
Cash buyers in this fast-moving market have the edge on house hunters who need a mortgage to make the purchase.
After losing a few bids to cash buyers, the Hipples asked their mortgage officer at Victorian Finance based in Upper St. Clair to do a videotaped testimonial that they now provide to sellers. In the video, their banker states that Ms. Hipple and her husband, Ryan, a 36-year-old software engineer at Schell Games, are strong mortgage applicants and will be approved quickly.
“The loan officer is speaking on camera directly to the sellers. It’s very personal. But even that doesn’t trump cash,” said Lynne Bingham, an agent in Howard Hanna’s Upper St. Clair office who represents the Hipples.
She said the south suburbs continue to be highly competitive and multiple offers and fast sales are the norm. The package she sends to sellers for the Hipples includes a personal letter from them along with a family photo with their 2-year-old daughter.
“We want sellers to get acquainted with the buyer and make them put a real face to the seller, and not just Offer No. 3,” Ms. Bingham said.
“You used to be able to write an offer and say, ‘Give me a call.’ But that day is over,” she said.
John Petrack, executive vice president of the Realtors Association of Metropolitan Pittsburgh, said he has never heard of so many creative offers before.
“Buyers are saying, ‘I’m going $10,000 over the asking price, and I’ll include six game tickets for the Steelers or season tickets for the Penguins. I heard of someone who offered to buy a wine club subscription for a seller who had a wine cellar.”
Hard on first-timers
This is definitely not the slow-but-steady housing market Pittsburghers are used to. First-time buyers are finding out that getting approved for a mortgage is no longer the hardest part.
When 23-year-old Chase Thiel graduated from Penn State Behrend in 2020, he could hardly wait to buy a house, but he wasn’t prepared for how stressful it would be to win a contract.
“I went for a house in McCandless, and the sellers took a cash offer that was lower than my bid,” said Mr. Thiel, a software test developer at Smith Micro Software in McCandless.
Mr. Thiel had worked three jobs to pay rent in college. He lived with his parents in Ross for a year while he saved for a 5% down payment. That one big letdown made him realize he couldn’t take anything for granted.
“I was honestly pretty distraught. I’m wondering how will I ever buy a house if everyone is throwing cash offers everywhere,” he said. “But it honestly made me more determined.”
He eventually found a 1,600-square-foot home in Hampton. There were no other bidders for the house on a corner lot off a relatively busy road with 14 oak trees on the property.
‘Where will you go?’
Sellers are likely to make more money on their homes now than they could have at any other time. But those sellers may not have another place to live.
Mr. Hanna, president of the region’s largest real estate brokerage, said the number of houses coming onto the market for sale is rising slightly, but there‘s an inventory of “shadow housing” that hasn’t hit the market yet. That is made up of homeowners planning to put their homes on the market, but they need to buy a new home first.
“They don’t want to be homeless or renting or living with family members,” Mr. Hanna said.
Charlene Haislip, a Re/Max real estate agent in the Squirrel Hill office, said she has two homeowners — in Swissvale and O’Hara — who want to list their homes. She is trying to find new homes for them before they sell.
“I told them they’ll get tons of money, and they will sell it pretty quick — even this time of year. But where will you go?” she said.
She said temporary housing is the most expensive type to rent.
“Historically, Pittsburgh landlords want renters to sign one-year leases,” Ms. Haislip said. “Temporary housing is either going to be an AirBnB or corporate housing, and you’ll pay through the nose for that.”
‘It got really quiet’
Nancy Dorn and her husband, Doug Sprague, both real estate agents at Re/Max in Squirrel Hill, recently decided to sell their townhouse in Ross and move into a house in Allegheny West they had previously used for rental income.
They weren’t surprised to get three offers the first weekend they held the open house, but something about the experience felt different.
“There was an initial rush, and then it got really quiet. The showings slowed considerably,” Ms. Dorn said. “Six months ago, we would have had way more total showing appointments.
“The truth is, in a normal market, it would have taken longer to sell,” she said.
“It’s an excellent market, but it’s not what it was six months ago. So, we got three offers instead of 10. Am I disappointed in that? No. There’s just fewer sharks in the water.”
Suburban neighborhoods gaining ground
Demand for housing in city neighborhoods remains high in communities like Point Breeze, Squirrel Hill, Lawrenceville, Bloomfield, Regent Square and other East End neighborhoods.
But the pandemic spurred many families to seek larger homes with more yard space outside of the city. That has caused an explosion in demand for suburban communities in the South Hills and North Hills, as well as in Penn Hills despite its reputation for high rates of mortgage foreclosure and less-than-stellar home price appreciation.
Real estate agent Staci Rullo said the east suburban community that once topped the list in Allegheny County as the place where the most families lost their homes to the bank made a dramatic turnaround in 2020.
“It’s all because of the supply and demand situation,” said Ms. Rullo, a Berkshire Hathaway real estate agent.
She pointed out that it’s still possible to buy property in Penn Hills in the low five figures. But one home there recently went under contract for $800,000.
“We had houses here with 17 offers on them at one time,” Ms. Rullo said. “That’s unheard of for Penn Hills.”
There may soon be more buying opportunities in the region, especially since inventory is rising and fewer buyers are bidding. But the Hipples admit they are picky and are determined to live in Mt. Lebanon.
“We only intended to stay in an apartment for three months, and now we’re pushing five months,” Ms. Hipple said. “If this doesn’t resolve in the next couple of months, we will have to consider what comes next and that could mean renting for a while to ride everything out.
“This is holding our life back now,” she said. “It’s become a long-term situation where you feel like you’re losing time.”
Tim Grant: tgrant@post-gazette.com or 412-263-1591.
First Published: October 17, 2021, 4:00 a.m.