Pittsburgh Housing is Healing, Commercial Contracting Declining

Single family detached housing starts rose more than 16% compared to last year during the first half of 2010, according to the Pittsburgh Homebuilding Report. The pickup in new home permits in May and June is the first positive sign in almost three years, and it obviously was happening without aid from the tax credit. More than just the volume increase – which was fairly small – the better sign was seeing builders who had largely disappeared for a year or more get some new business.

During the January through June period 810 permits were issued for single-family detached units, up from 697 during the same period last year. Attached units declined more steeply, with 325 units started compared to 614 during the first half of 2009.  The overall housing construction market was down 13.4%.  

Tempering the optimistic side of the data is the surprising drop-off in attached housing. The numbers last year included the permits for a large market-rate Hope VI project so that may have skewed the 2009 numbers; however, the demographics really favor this kind of product so you might expect to see a recovery in villas and quad homes first.

Non-residential construction was down 13% compared to the same period last year, but contracting volume was up over 200% from the first quarter of 2010.  Contracting during January-June was $1.13 billion, down from $1.3 billion in 2009.  Most of the larger projects started were publicly funded so far this year. During the past 45 days or so there has been an improvement in the amount of private sector projects being bid but the market remains hypercompetitive and there are fewer opportunities for the larger firms in the region.

 The improved global economic picture has helped manufacturers pull the trigger on some of the large industrial projects that have been pending. AK Steel has contracted its $140 million upgrade and USS Clairton Works is preparing to start roughly $450 of the $1 billion it has planned to invest in its coke batteries. Allegheny Ludlum selected an engineer for its mill equipment, which should signal the renewal of their plans for a new $1.2 billion plant in Brackenridge. Even with the industrial projects included the volume for 2010 should remain below $3 billion.

The top municipalities for new permits:

Municipality #SFD #SFA Total
Single-Family Detached      
Jefferson Hills 41 8 49
Peters Township 38 0 38
South Fayette Township 37 7 44
Adams Township 36 24 60
Cranberry Township 36 22 58
Moon Township 34 6 40
North Huntingdon Township 29 4 33
Franklin Park 27 4 31
Pittsburgh 26 37 63
Robinson Township 26 0 26
Single-Family Attached      
Pittsburgh 26 37 63
Chippewa Township 3 28 31
Adams Township 36 24 31
Ohio Township 24 23 47
Cranberry Township 36 22 58
Total Pittsburgh MSA 2010:2 810 325 1,135
Total Pittsburgh MSA 2009:2 697 614 1,311
% Change 16.2% -47.1% -13.4%
By County SFD SFA Total
Allegheny 385 175 560
Beaver 61 40 101
Butler 117 58 175
Fayette 21 0 21
Washington 112 30 142
Westmoreland 114 22 136

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