Central PA Housing Market
News on the housing market is something we are hearing about each and every day. Over the last couple of years we have again begun to see some improvements in the housing market, with some positive signs that things are finally getting back on track since the recession began in 2008. So, here we are nearly 7 years later. How is Central Pennsylvania's housing market now compared to 5 years ago and what are the predictions for the next 5 years?
number of housing units
In the nine counties that make up the Central Pennsylvania region (Adams, Berks, Cumberland, Dauphin, Franklin, Lancaster, Lebanon, Perry, and York) there are roughly 974,000 housing units. Between 2000 and 2010, the area witnessed a 12.3% growth in the number of housing units. Out of the nine Central Pennsylvania counties, six of them had increases over 12% in the number of units.
That growth slowed between 2010 and 2015. In this time period, the region saw an increase of approximately 2.9% in the number of housing units. Cumberland County had the highest percentage change in the number of housing units at about 4.7%.
Projections for the next 5 years continue to show modest growth in the region's housing units. Between 2015 and 2020, the market is expected to add an additional 26,000 units (approximately 5,200 units per year) which would increase Central Pennsylvania's total housing market to over 1 million units.
The chart above displays the number of housing units in Central Pennsylvania in 2000, 2010, 2015, and the projected number of units in 2020. At the projected growth rate of 2.7% between 2015 and 2020, Central Pennsylvania will have over 1 million housing units. It is important to note that these projections are based on regular market conditions and do not take into consideration any major social or economic events that may positively or negatively impact the area's housing market in any significant manner.
owner occupied vs. renter occupied units
Part of the housing market conversation that we hear has been focused on the growing demand for rental housing. Theories behind this growth in demand include the tightening credit standards for new mortgages, the aging Baby Boomer population that want to down size and no longer own homes, and the up-and-coming Millennial generation that are not yet ready to purchase their first homes, just to name a few. How has Central Pennsylvania's housing market been affected? Lets look at the numbers and see.
In 2015, there were 623,000 owner occupied housing units in Central Pennsylvania (approximately a 63.9% home ownership rate). This number represents a 1.7% decrease in owner occupied units from 2010 to 2015. In that same time period, the region saw a 10.4% increase in the number of renter occupied housing units, going from approximately 254,000 in 2010 to 280,000 in 2015. The number of renter occupied units in 2015 represents about a 28.7% renter rate. Both the owner occupied and renter occupied markets are expected to see modest growth increases over the next 5 years.
The chart above displays the change in the number of owner occupied units (blue) and renter occupied units (red) from 2000 to 2020 in Central Pennsylvania. The projected numbers for 2020 are based on normal market conditions and do not take into consideration any significant changes that could occur due to any major economic or social events.
additional market highlights
According to the research, here are some additional highlights on Central Pennsylvania's housing market:
- The current residential vacancy rate is an estimated 6.4% in Central Pennsylvania and is projected to increase to 6.6% by the year 2020.
- The median home value in Central PA is approximately $188,000 and could increase to $221,000 over the next five years.
- The average contract rent in 2015 for the region is $688
- 88.7% of renters in Central Pennsylvania pay extra for their utilities
- 37,000 renters in Central Pennsylvania moved into their units after 2009 (14.5% of the total renter market)