Johnstown housing market remains steady

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September 14, 2008

By SHAWN PIATEK The Tribune-Democrat Sun Sep 14, 2008, 11:41 PM EDT

It isn’t unusual to hear that Johnstown is heading in a different direction than the rest of the state when it comes to matters of the economy.

Cambria County typically posts the highest unemployment rate among the state’s 16 metropolitan areas. And when the housing market was booming across the state and nation, the local market remained largely unchanged.

According to a study released last week by the Keystone Research Center, Johnstown is once again moving in the opposite direction of the rest of the commonwealth’s metropolitan areas. But this time, that stark contrast is a positive for the region.

Keystone’s study showed that the Johnstown metro area is the only one in the state in which home values appreciated between the second quarter of last year and the same period of this year. Overall, home values across the state were down by an average of almost 7 percent, while Johnstown homes increased in value by more than 4 percent.

Mark Price, labor economist for Keystone Research who is responsible for the study, said he sees a number of factors responsible for the region’s real estate strength.

No boom, no bust

One of the major contributing factors was that the Johnstown region missed the housing boom earlier this decade. While housing prices rose by an average of 39 percent across the commonwealth between the second quarter of 2001 and the same period of 2007, local housing prices increased by only 11 percent.

Price said that, historically, home prices rise at the rate of inflation. He said corrections are most likely in markets in which such uncharacteristic price increases have taken place.

“Johnstown has never been a market that goes up or down to extremes,” said Jay Maruhnich, broker/owner of Coldwell Banker Prestige Realty in Richland Township.

“Other markets are more volatile. When they go sour, they go sour at a bigger percentage – and when they boom, they boom at very high levels. We’re just not going to see those types of great fluctuations.”

Price said that when a market shows stronger growth than the average, it usually is due to an influx of population or job growth. While the region is not dealing with an overwhelming immigration of new residents, job numbers have been strong in Cambria County during the past year, twice reaching record levels.

‘Gradual increases’

Gary Green, owner/broker of Century 21 All Service in Richland Township, said the continued steady appreciation of home values locally likely isn’t a commentary on the strength of the local economy.

“Johnstown isn’t doing anything differently; we’re just a unique area,” Green said. “I’m sure there are other areas across the country that have seen the same thing.”

Price said that while some may view the lack of a retrenchment in home prices in the region to be a negative when considering buying, they should see it is a positive. He said it serves as an indicator that the local market serves as a safe place to invest in real estate.

“That’s what makes this a better market to buy into, because you know you’re going to see gradual increases in home value,” Green said.

“Historically, we’re at a 3 to 4 percent increase each year. You’re not going to get those big leaps, but it’s a good and safe place to buy a house.”

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