Pittsburgh has one of the most stable housing markets in the country, according to a new report.
The study, conducted by Zillow Real Estate on behalf of Bloomberg.com, listed Pittsburgh as having the second most stable housing market behind Buffalo. Louisville, Nashville and Raleigh rounded out the top five.
Analyzing housing prices from 1979 to the present, Zillow and Bloomberg used a five year rolling average to calculate changes in home prices to establish a risk of loss percentage.
According to the study, Pittsburgh and Buffalo have a 0 percent risk of loss, meaning a homebuyer isn’t likely to make much money from their investment, but they probably won’t lose their money either.
Pittsburgh’s worst year was a 7 percent drop in value in 1980-81, placing the city behind Buffalo, which only experienced a 4 percent drop in 1994-95.
Svenja Gudell, director of economic research for Zillow, said Pittsburgh’s housing market is “boring”—in a good way.
“If you picture a line of home values, they just kind of keep going up and up and up,” she said, “whereas if you look at Vegas or Phoenix, you’d see a bubble in there where home values climbed extremely high and then they collapsed again and you don’t have that in Pittsburgh.”
Pittsburgh is safe from housing bubbles because of its available space, according to Gudell. She said cities such as San Francisco struggle because of building constraints and an inability to grow outward.
“Pittsburgh has been an extremely steady market and we’ve noticed this all throughout the housing recession because Pittsburgh really didn’t have a housing recession,” she said. “It is one of those markets … where home values steadily keep on climbing.”
At the other end of the spectrum, Hartford, Conn. posted the highest risk of loss at 36.8 percent, followed by Providence, Rhode Island. Boston and Los Angeles also made it into the bottom five with a risk of loss of nearly 30 percent each.
But Gudell said these cities aren’t bad places to live, they just have unstable housing markets. She said if homebuyers are smart about their investments, they should be safe from the market’s unpredictable nature.
“Go in and try not to extend yourself,” Gudell said. “Be comfortable with your investment that you’re making when you’re buying a house and most of the time, you will not go through the type of housing bubble that we just experienced.”