When newcomers to the Morgantown area begin looking for a home, they ask a lot of questions.
And one question that never fails to come up is why is this house so expensive?
“People do get sticker shock,” admitted Barbara Phillips of Snider Realty Group.
Phillips is referring to the Morgantown Bump, a unique peculiarity of the local housing market where single-family detached and attached homes tend to fetch much higher prices than they would in different — and larger — markets in the state and even in the Greater Pittsburgh area.
Why? There is no definitive answer, real estate professionals said. It is kind of a glass half full or half empty scenario.
The Morgantown region is home to the National Institute of Occupational Safety and Health, two large hospital systems, as well as Mylan Pharmaceuticals and West Virginia University, but has a population — albeit growing — of approximately 31,000-plus. These institutions calling Morgantown home tend to pay higher wages and have an ever-changing workforce that is either moving to or from the area. As a result, realtors said sellers are able to command higher prices for their homes.
“There are a lot of advantages here,” said Melissa Berube, an associate broker with Howard Hanna Real Estate Services in Cheat Lake and president of the Morgantown Board of Realtors.
Indeed. Phillips said local sellers are usually able to get — on average — 96% to 97% of their home’s list price. Higher-end homes in the area, $400,000 and above, however, tend to sit on the market longer, she added.
“But, it depends on how long it has been on the market and the seller’s situation,’’ she said. “It’s like the stock market, a commodity.”
The Morgantown Bump is readily apparent if you look at the statistics from the U.S. Census Bureau, too. During the four-year span of 2013-17, the average median value of an owner-occupied housing unit in Morgantown was $182,500. For that same timeframe, the median annual household income was $37,900. Also, between 2000 and 2010, when most of West Virginia was seeing a population loss, Morgantown’s population grew 10%, making it the third most-populated city in the state behind Charleston and Huntington, leaving Wheeling and Parkersburg behind.
By comparison, the median value of a home in Charleston was $149,800 and $95,200 in Huntington. The average value of a home in Martinsburg, considered a Washington, D.C., suburb, was also $149,800, the U.S. Census said. But the median household income in Charleston was $45,797 and $30,359 in Huntington, while the median household income in Martinsburg was $40,450 during those same years.
In the much-larger Pittsburgh market, the median value of an owner-occupied house was $108,500 and the median household income was $44,092.
There are bidding wars sometimes for a house, Phillips said.
“Usually in the Suncrest area,” she said.
Looks can be deceiving
Even though median home values in Morgantown are higher than the rest of the state, the U.S. Census placed the local poverty level at 35.5%, higher than most of the state. The poverty rate in Charleston was 20.7%; Huntington, 32.5%; Martinsburg, 27.4%; Wheeling, 15.5%, and Pittsburgh, 22%. Roughly 12%, or 40 million U.S. residents live in poverty, the Census Bureau said.
One statistic possibly contributing to the higher poverty rate in the local area is the age of its residents. In the Morgantown area, less than 10% —
9.4% — are 65 or older. The city with the next lowest amount of people 65 and older is Pittsburgh with 14.2%, followed by Martinsburg, 14.4%; Huntington, 15.3%; Charleston, 17.4%, and Wheeling, 22.5%.
Only 43.3% of the housing stock in the Morgantown area is occupied by the owner. This statistic suggests many single-family homes are occupied by renters. That statistic is much higher than other West Virginia cities including Charleston, 56.7%; Huntington, 50.1%; Wheeling, 63.2%; Martinsburg, 48.1% and Pittsburgh also at 48.1%.
The fact that Morgantown has high home prices but lower owner-occupied percentages suggests the region’s largest employers — including WVU — have an impact on what sellers can ask. Also, when WVU is in session, the population of Morgantown doubles in size.
“The ability to use student loans to finance living expenses as well as classes means developers can ask higher rents and get them,” said Karen Kunz, a WVU associate professor of public administration. “I know students who are paying $1,000 a month to share an apartment with three other people in Morgantown. The irony is that it will hinder their ability to buy homes after graduation. Having to pay off student debt translates to delayed saving rates and lower home ownership rates or later-in-life home ownership.”
These are the same reasons development continues despite so many unoccupied units, Kunz added.
Also, the market for resale and new homes appears to be slowing down, said Barbara Phillips.
“I think it is because of Trump,” Phillips said. “People are looking at a lot of houses but are not moving forward. I don’t think they are as eager to buy.”
