A 'seismic shift' in region's housing market
Jul. 17—WILKES-BARRE — Jill Avery-Stoss, Director of Operations at The Institute for Public Policy and Economic Development, this week said the time since the beginning of the pandemic has marked a seismic shift in the regional and nationwide housing market.
While for-sale inventory was already declining in 2019, indicating a tightening housing market (a seller's market), Avery-Stoss said the onset of COVID-19 accelerated the trend.
"Home values in the region saw more growth from 2020 to 2021 than the entire previous decade," Avery-Stoss said. "Lackawanna and Luzerne Counties saw year-over-year increases of 18% and 26%, respectively. Pennsylvania as a whole saw a 20% increase in home values from 2020 to 2021, equating the previous decade's growth in just one year."
Market prices have also increased for rental units, Avery-Stoss said. Within the Scranton/Wilkes-Barre/Hazleton metropolitan area, typical market rents for units in the 40th to 60th percentile reached $1,017 in 2021 — up 11.6% from the prior year.
Nationwide, market rents increased by 8% during the same time. By comparison, from 2017 to 2021, year-over-year market rents increased an average of about 3% regionally and nationwide.
Affordable housing: the bigger picture
Historically, Avery-Stoss said housing has been fairly affordable in Northeastern Pennsylvania. According to the latest available data, the median monthly ownership costs — including mortgage payment, property taxes, and other costs of home-ownership — as a percentage of median household income for owner-occupied households decreased, and were notably lower than 2010 proportions.
However, Avery-Stoss said the above noted trends in the real estate market are revealing significant implications on the need for new efforts to ensure access to affordable housing.
"Affordable housing should not be construed as low-income housing only," Avery-Stoss said. "There are many people working full-time jobs in a variety of occupations — such as education, health care, manufacturing, etc. — who cannot afford some of the market prices."
Housing affordability does not end at mortgage or rental rates, either. There are real estate taxes, various insurances, utilities, fuels, and more to consider.
According to Avery-Stoss, a household is considered cost-burdened when housing-related spending exceeds 30% of its income, meaning that it may struggle to afford other necessities.
Lackawanna County's housing costs to income ratio normally falls between 22.9% and 25% for homeowners. These numbers have been lower over the last several years than the comparison year of 2010, indicating that on average, homeowners have become somewhat less burdened by housing costs over time.
Luzerne County's rate was 21% in 2019. This percentage represents a small decrease from the prior year, and the lowest of the past five years.
Pennsylvania's ratio had decreased to 22.5%, continuing a downward trend.
The median rent as a percentage of median renter household income for all three geographic areas has fluctuated for the past several years, usually staying close to or under 30%. Most recently, the ratio increased marginally to 28.5% in Lackawanna County and decreased to 29.1% in Luzerne County.
The statewide ratio fell to 30.2%. Avery-Stoss said the two counties have generally had median rents and rent-to-income ratios that were comparable to or slightly lower than Pennsylvania's overall.
Reach Bill O'Boyle at 570-991-6118 or on Twitter @TLBillOBoyle.
