Scranton-Wilkes Barre – 4th Best Place to Buy or Invest in Real Estate in the US
It’s official! There are only a few better places than Scranton / Wilkes Barre to buy real estate. Many of us knew it from the beginning.
Local industry professionals such as real estate agents and mortgage professionals have seen it come in the form of increased investment activity from the neighboring states of New York, New Jersey and Connecticut. We have seen residential and commercial property investors from these states come in and buy properties by the block! These are smart investors who are making big returns on their investment.
Now, this movement comes to light thanks to a study by the National Association of Home Builders and Wells Fargo. This study was highlighted in an article in The Scranton Times.
The Scranton Times article study used an interesting index to measure for this study. They used logic. The study looked at median income for residents and home prices. The idea was to see what percentage of homes were selling at prices that residents earning the area’s median income could afford. According to the article, 81.5% of the homes sold were affordable to residents earning at least the median income. Clearly, most of the real estate inventory is affordable for people in the area.
In NEPA (Northeast Pennsylvania), we had a few things going for this study. Average income is not bad. If you live here, you will hear many complaints about our income. It has been difficult to attract large companies from out of town to come here and stay. However, we have been able to make it happen with companies like Bank of America and Prudential. These companies love our strong work ethic.
From my own observations, I would say that, as in any area, there are sectors of the poor and sectors of the rich. I think our wealthy segments of the area are abundant. Areas like Clarks Summit and Dallas are full of big houses and big purses. There is a segment of the poor, but I don’t think they are as abundant as in other areas. I guess I’m trying to say that our highs are very high, but our lows are not very low. That allows us to maintain a relatively comfortable median income.
At the same time, our property values and sales prices are not as high as those in our neighboring states and regions. For many years, New York and New Jersey property values skyrocketed much faster than income. They used creative financing like Option ARM to get a mortgage payment they could afford. Now values are crashing because those loans are no longer available to help stretch buyers’ dollars.
Here in NEPA, the values never took that initial increase. Scranton / Wilkes Barre was seen as an economically depressed area. The jobs weren’t here to allow for high home values and prices. We just couldn’t afford them and Option ARM sellers were busy making loans in high-value areas where they could see substantial profits. Now things have changed and this looks like a great area to be. Since house prices never had that sharp rise as in other areas, we don’t have a “bubble” to burst. Housing costs continue to be in line with local income.
This presents great opportunities for real estate buyers. There are families migrating from NJ / NY and even from southeast PA. They are discovering that they can buy a home similar to yours in NEPA at a fraction of the cost they are used to.
The other interested party has been real estate investors. They buy houses in foreclosure or otherwise for a pocket change compared to what they are used to paying. They can afford to make major improvements to the property. They use local property managers to place qualified people in these rental units. They use local investment property mortgage brokers [http://www.nepamortgagetips.com] who know the area and have access to more creative financing. Investors will continue to rent until an exit strategy is presented.
Investors are happy because they are buying properties “cheaply”, but they are also happy for another reason. Your rental pool is perfect! Many, if not most, people in this rental group can no longer qualify for a mortgage as all lenders tightened their guidelines. These people must rent rather than have the option to buy. We have talked about average income. Investors are finding that their rental applicants have sufficient income to pay the rents. This translates into an increase in market rents.
It’s a double whammy for these investors who have been lucky enough to find our little section of the world. It presents an ideal money-making opportunity for people who want to use residential and commercial real estate investments to build their wealth. It also presents an excellent opportunity for a family who would like to live in an area where they do not worry about having an unbearable mortgage payment. They can feel free to let their tastes and values determine what type of home they live in. They no longer have to be slaves to their income and settle for a small house to pay for it.