PITTSBURGH (KDKA) — Nearly one out of five Americans live in apartments and what they pay for their rental units varies widely.
A recent study found commercial rents in Pittsburgh jumped quite a bit in 2019.
But does this hold true for residential apartments?
Most commercial office building construction is occurring in the city.
“It’s centered in that urban fringe area that we identify — the Strip District, the Lawrenceville area, Oakland, East End, Northside, South Side, with a very limited amount taking place in the suburbs,” says Paul Griffith, an appraiser with Newmark Knight Frank.
Griffith, whose company provides market studies for developers, says outside the city industrial growth like the Amazon warehouse in Findlay is more common.
Transwestern, a Houston company that does research for commercial real estate owners, says rents for office space in this region rose eight percent in 2019.
“That kind of spike is usually just that, a spike, might occur once in a particular area based on a particular change in the market, but it usually reverts back,” Griffith told KDKA money editor Jon Delano on Monday.
The normal hike is about two percent each year.
So what’s the impact on residential rental rates?
Griffith says the average Pittsburgh city rental rate is $1,345 dollars a month, while the suburban rental rate is $1,004 a month.
“All our apartments are full. People love living in the city,” says Todd Reidbord with Walnut Capital.
Walnut Capital leases 2,500 apartments in many of the hot neighborhoods in the city.
“The rates haven’t gone up exponentially as you’ve seen in the commercial area, but it’s been very strong and steady.”
Residential rate hikes of about one to three percent are typical.
Now no one can predict with certainty how high rental rates will go up in Pittsburgh in 2020.
The one thing we know for sure: they won’t be going down.