For more than twenty years a half-dozen or so northern suburbs have been among the fastest growing in the entire region, and now, with Westinghouse planting its new corporate flag in Cranberry Woods, the North Hills is poised to be the housing growth engine of Pittsburgh again.
During one of the toughest years for new home construction in a generation, in 2009, North Hills communities remained attractive. According to the Pittsburgh Metropolitan Homebuilding report, five of the top ten municipalities for new construction of single-family detached homes were in the north, and three of the top five for single-family attached homes were also in the north.
“The North Hills has the highest concentration of growth catalysts,” says John R. Deklewa, president of Deklewa Home Inc. “It has a combination of good school districts, infrastructure, reasonable terrain, attractive commercial development and stable or rising home values.”
The growth engine of the North Hills shifted into high gear in 1989 when the completion of the Parkway North, or I-279, opened the urban commute to workers who could live well north of Downtown Pittsburgh. In the post-World War II boom, the ease of commuting from the north had made suburbs like Shaler and Ross Township hot areas for raising the babies that would become the Boomers. The shopping district of McKnight Road followed this growth, and shopping centers like North Hills Village and Northway Mall became some of the first modern malls.
Upscale neighborhoods developed in the 1960’s and 1970’s in communities like McCandless, Franklin Park, and Marshall Township, but these neighborhoods were at the far end of a reasonable Pittsburgh commute until the limited access Parkway opened up. Now, you can live most anywhere south of Zelienople and be roughly a half hour from work. The new construction rush was on.
Even though the central business district had begun to wane as the center of employment in Pittsburgh by the time I-279 opened, the Parkway’s easy access to points where new jobs were popping up (like Oakland or South Side) gave even more impetus to the push north. In the 1990’s there was rapid growth in areas like Franklin Park and McCandless, but the real stars were the communities that had previously been rural, like Pine Township, Adams Township, Seven Fields, and of course, Cranberry Township. Because there was more new construction in the north, realtors began to shift their focus to the north as a market for relocation buyers, who have historically purchased a big share of the new construction product. This self-fulfilling growth engine made the far North Hills a hot spot for the region’s newest residents.
... Westinghouse now
occupies MORE THAN 1.2 MILLION square feet
IN THE NORTH.
The motivating force behind the popularity of the North Hills was the easy access to jobs from those communities. The driving force today is often the easy access to jobs in those communities.
“There is a lot of new business in the north,” observes Deklewa, who is building in three different neighborhoods in southern Butler County. “Westinghouse gets the attention because of its size, but I see a lot of jobs in other energy businesses. The RIDC [Thorn Hill] park is virtually full and more is being built there. There are a lot of jobs being created.”
Veteran North Hills developer and builder Michael Kamon agrees with Deklewa, and believes one particular highway project made a big difference.
“Improving the 79 corridor and combining it with I-279 and 76 made that intersection attractive to warehouses and industrial companies,” he explains. “I see Cranberry in two ways: one is a place to live; but the other is that it is location, location, location as a place to work. It is now a much better location for putting a warehouse, industrial building or an office. The North Hills are becoming a bedroom for Cranberry’s industrial parks.”
All builders and real estate professionals have been anxiously pointing to the completion of the new Westinghouse headquarters campus, which began moving employees in last summer. The deal, announced in late 2006, was a high-profile win for the economic development community in Western PA. At the time, Westinghouse expected to add 1,000 jobs to the 2,000 employees that would be moving with the company from Monroeville. That was before the oil crisis that drove prices to near $150 per barrel in mid-2008. High prices for oil and rapid growth in China and India led to much higher-than-expected sales of nuclear reactors for the company, and the plans for its new campus grew while it was still being designed.
In fact, while its campus was still under construction, Westinghouse executed more than 300,000 square feet in leases in Cranberry and Marshall Townships, making it one of the biggest companies in the North Hills, before it opened its permanent doors. With a fourth building under construction on its campus, Westinghouse now occupies more than 1.2 million square feet in the north. The global recession may have taken some of the starch out of the market for a while, but Westinghouse still sees the need for adding 3,000 jobs to its original plans, with long-term estimates of as many as 10,000 employees here.
Westinghouse’s decision to locate in Cranberry Woods was thought to have been a boon for Butler County, with its lower tax structure. Westinghouse employees have certainly been making their presence known in the new subdivisions in Cranberry and Adams Township (virtually every builder sold houses in their new neighborhoods as soon as last winter), but the distribution of the homes that have been purchased by Westinghouse employees has shed some light how buyers view the different strengths of North Hills communities.
Just as many of the earliest sales tracked to Westinghouse employees were on the Allegheny side of the map as were on the Butler side.
THE BENEFITS of the increased employment from Westinghouse and others WILL BE SPREAD THROUGHOUT...
It seems that the buyers placed high value on the school districts in the area, and the reputations of Pine-Richland, North Allegheny and even Hampton Township schools helped attract as many homeowners as were drawn to Seneca Valley or Mars. And feedback from buyers who bought in Allegheny County indicates that many didn’t view the higher taxes as prohibitive in comparison to being closer to Downtown, or in a particular neighborhood.
The buying patterns don’t indicate that the Butler County communities are lacking in comparison, but rather that the benefits of the increased employment from Westinghouse and others will be spread throughout the entire North Hills area.
While there are plenty of current Pittsburgh residents who can respond to the growth in jobs at Westinghouse or its many vendors, the reality is that the new jobs will create many more relocations to Western PA, a fact that favors the North Hills again.
The fastest-growing builder in the region in the past half decade has been Heartland Homes, which built its business in the South Hills, but had products that were appealing to the relocating buyer and, therefore, looked to the north when it wanted to expand. “We chose the North Hills because of the relocation buyers, who are good prospects for the type of home we build,” says Heartland’s marketing director Kevin Oakley. “Realtors tend to take relo buyers north because the area looks more like where they are coming from. It has less hilly terrain, newer homes, attached garages versus integral garages and new commercial developments.”
Since opening Northridge in Ohio Township, Heartland Homes has started, and in some cases completed, neighborhoods in Cranberry Township, Pine Township, Hampton Township, Marshall Township, and Richland Township in the north, and Oakley expects the trend to continue. “We know that a large number of our future homes will be in the North Hills. I expect that our homes will be about 50% in the north and 50% in all the other areas combined.”
“Everything is new out here, which people really like when they are coming to an area,” says Christopher Kaclik, of Kaclik Builders. Kaclik has been part of developing about a dozen neighborhoods along the Route 228 corridor in Adams Township and recently opened Taylor Ridge, a 50-lot subdivision just off Route 228. He acknowledges that this seems to be a challenging time to develop another neighborhood, but is unconcerned about the project. “This area still has the small town, country feel to it even though it’s very close to jobs. There are new restaurants, banks, and the shopping in Adams is all new. We still need an improvement to the main highway, but once you’re here a while you learn the local routes to get around 228.”
The still semi-rural nature of the areas immediately on either side of the Allegheny-Butler border has advantages other than appealing to the ‘Green Acres” buyer. Available land that isn’t tied to surrounding architecture allow for builders to try newer styles of homes and communities.
Fifteen years ago one of the hot trends in residential construction was the development of continuing care communities, where aging residents could move from independent living to acute care all in one place. As the Baby Boomers moved into the retirement years, that model morphed into a better concept of aging in place. Because the wealth accumulation of the Boomers had fed the growth of the ‘McMansion,’ another concurring trend was for empty nesters to shed a lot of that excess square footage when their children moved out. The result was a brisk demand for a new style of living space.
“The hottest product for me right now is the maintenance-free home like we’re building in the Fields of Nicholson,” says Michael Kamon. “The designs of the home have changed to have first floor master suites and garages that walk out into the kitchen. The association dues cover the snow shoveling or landscaping or building upkeep. It costs the buyer money but it gives them time in exchange.”
“The new construction lets us use new ideas that fit the new needs of the buyers,” Kamon explains. “We’re putting more communications in the house, more green construction, and as many no-maintenance features as possible.”
Trends in development that draw from sustainable lifestyle issues are also showing up in the new North Hills communities. Projects are being designed with higher density and sidewalks on tree-lined streets. Parklets are designed into the communities. Some of the new communities are true work/live/play neighborhoods, located adjacent to established office parks and with neighborhood retail or service space built into the community.
Cranberry Township’s Park Place will be the site for the first large-scale Traditional Neighborhood Development (TND) in suburban Pittsburgh. The concept of a TND is a hot development trend in other regions (Celebrations in Florida is an example), and is favored by communities because of the blend of housing and neighborhood retail businesses, and the more human scale of the architecture. Summerset at Frick Park is the largest of these TND’s in Greater Pittsburgh (although it may not be labeled as such). New homes began appearing in Park Place at the beginning of 2009. The bunker mentality that gripped the consumer slowed the startup of construction last spring, but a year later more than two dozen homes have been built.
Developer Don Rodgers of Creative Real Estate has plans for townhouses on a portion of the project, cluster homes for empty nesters and several small commercial buildings. At the eastern end of Park Place the streets terminate into the new Graham Park, with its Dick’s Sports Complex of soccer and ball fields.
The planning/zoning in Park Place was an example of the kind of municipal thinking that is spawning other planned developments in communities like Pine, Adams, McCandless and Marshall Township.
John Deklewa’s company has taken full advantage of the carried new planned communities that have been approved in the North Hills, and is building homes in three very different kinds of neighborhoods across southern Butler County. “Adams Crossing is more of an empty nester community, with no maintenance but without a pool and with low homeowner’s association dues,” he says. “Foxmoor in Cranberry offers higher amenities. It has a nice pool and is one of the only gated townhouse communities in the North Hills. Then there’s Park Place, which has everything in it. That’s the crown jewel of our portfolio.”
As the business climate in the North Hills continues to accelerate you can actually hear talk of concern about availability in the coming years, especially if we are seeing the beginning of another North Hills boom.
One by-product of the economic slowdown is that most of the desirable communities still have an inventory of approved lots, although new developments are limited. In Franklin Park, for example, more than 300 lots remain
in the approved subdivisions. More than 900 lots are still available in Adams Township. In Pine Township, 240 single-family units have been approved, and Cranberry Township still has hundreds of approved lots in inventory. But, other than in Cranberry, the tighter financing conditions have limited the pace of development for new neighborhoods.
“We continue to have great results in the North Hills,” says Coldwell Banker’s Bill Dietrich. “I think the builders who have products in the $200,000 and $300,000 range will continue to do well. Single-family homes of $400,000 to $600,000 are still a great market, and the market for homes that are $750,000 and up, which was slow, is doing better of late.”
Dietrich’s firm markets the Lake MacLeod neighborhood in Pine Township, which boasts homes mostly over $1,000,000. He noted that a similar neighborhood, called Woods of Sewickley Hills, was kicking off along Red Mud Hollow Road in 2010; but he lamented the lack of other new development coming into the marketplace.
“Other than Woods of Sewickley Hills, what piece of ground is being developed right now?” he asked. “In two years we may find ourselves without inventory to meet demand.”
Bill Dietrich’s scenario might be a nightmare for realtors (more buyers than homes!), but it’s a dream come true for North Hills residents. Unlike buyers in other parts of the country, prospects looking at new construction in the North Hills can be assured that they aren’t buying into a glut, or that the area will suddenly dry up.
Northwood Realty Services’ president, Tom Hosack, feels that the past performance of the North Hills housing market generates its own momentum. “Today’s buyer is so much better informed than in the past,” he notes. “When we meet someone new, they have done research on the Internet on school districts and resale values. An area like Cranberry, which buyers find out has a lot of transient activity, is popular because the buyer feels his house will appreciate if he has to sell in a few years.”
On the heels of two years of regular media stories about the housing bubble pops and foreclosures it may seem slightly crazy to think about a insufficient supply in the North Hills. Yet, with millions of square feet of new office and industrial space, and vacancy rates that are well below 10% in the north, it’s clear that more jobs are on the way. Without corresponding new construction, the North Hills market is tilting towards more buyers than sellers this year. That’s a market that should make homeowners smile. NH