Central PA (Central Susquhanna Valley) Market

Central PA (Central Susquhanna Valley) Market

Involved In Real Estate · Denver, CO · Member since 2014 · 3 posts · 1 vote

Hey all -- wifey and I love the site -- thanks for all the awesome information!

So, I'm currently an agent in Denver (where the market is ridiculous, and inventory is at a historic low), but my wife and I are contemplating a move back to central Pennsylvania where I grew up, and where my family still lives.   This would happen at the end of summer.

We would be looking at the Central Susquehanna Valley Region:  Lewisburg, Mifflinburg, Milton, Selinsgrove, Sunbury, etc.  I've been in the real estate world since 2010 (in CO) being a somewhat traditional agent, but now we are looking at potentially rehabbing and flipping, and doing the traditional "agent stuff" on the side.  I also have buy and hold experience here in Denver (we just sold a duplex we bought 2 1/2 years ago for $120k profit...and I mean, real profit, after paying the rest of the mortgage off and all closing costs), so that is another strategy we may employ as well.  I'm actually one of those guys that LIKE being a landlord, as I've done leasing for a long time.  Anyway, we're looking at doing a mix of both, depending on what makes sense.  I've lucked out in life and have a father who's built homes from scratch, and have a grandfather who is a master carpenter, so I know I will have a support team in PA.  I've also read and reread J. Scott's flipping books (and if you haven't read his books yet, I highly recommend them!), but I know I have a LOT to learn.

From the somewhat limited research I've done, and from my trips back there, I know it's a huge buyer's market. Houses sit for months, most of the time they expire and are taken off the market. Even without MLS access, I know there are some deals to be had there.

I wanted to put my feelers out there first:  does anyone else have a feel for the market out there?  Are there specific strategies that work well in that area?  Even any tips/things to look out for would be great.    Like I said, I grew up in the area and know it well, but I've been in Colorado since 2009.  

Any thoughts/comments/questions would be greatly appreciated.  Thanks!

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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
11y

Hi! I live in Denver but have a cousin in Lewisburg. It's beautiful there, but certainly a much different RE environment than Denver. I don't have a lot to offer except encouragement- I've looked at listings in the area and I can tell that it would really take a lot of local knowledge to know what areas were strong and which weren't, so I didn't pursue it any further. I'd guess there are some good rental markets near the universities (Bucknell, etc). If I were moving there I'd be on the watch for economic drivers like new hospitals and the like and look for opportunities near them. I have also read that PA has some different tax laws for investment (doesn't recognize 1031 exchange for state taxes, I think?) Anyway- something else for you to look into, perhaps

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  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    11y

    @Kevin Walter I can't comment on living in PA but I will say that living and working in an appreciating market makes everyone look smart. It's hard to go wrong with Denver IMO.

  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Hi! I live in Denver but have a cousin in Lewisburg. It's beautiful there, but certainly a much different RE environment than Denver. I don't have a lot to offer except encouragement- I've looked at listings in the area and I can tell that it would really take a lot of local knowledge to know what areas were strong and which weren't, so I didn't pursue it any further. I'd guess there are some good rental markets near the universities (Bucknell, etc). If I were moving there I'd be on the watch for economic drivers like new hospitals and the like and look for opportunities near them. I have also read that PA has some different tax laws for investment (doesn't recognize 1031 exchange for state taxes, I think?) Anyway- something else for you to look into, perhaps

  • Involved In Real Estate · Denver, CO · Member since 2014 · 3 posts · 1 vote
    11y

    Thanks for for both of your thoughts -- yes, it'll be hard to leave this market, but family comes first, you know?  We may look into Bucknell rentals (I worked there over the summer way back), actually!

  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Well, I'm thinking you may be better off in the long run out in PA if landlording is your thing. Hard to build a portfolio in Denver these days, that's for sure. I just think you need to be careful about population trends out in PA is all- some of those towns may just be dwindling away. Some of them are bound to stay steady or grow though, and it could be a perfect time to buy. Good luck!

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    HI @Kevin Walter welcome to PA.

    Been doing investing in central PA for quite awhile, FIL went to Bucknell.   Welcome to PA investing, you will find it quite different from CO.  Besides the colleges and Universities there's also Allenwood.

    PA does not recognized 1031, but the current PA state income tax is only 3.07% fixed.  So a 1031 would be recognized for Federal but not state income tax.  There are also few deductions on state income tax.  Real estate taxes are typical 2% or less;  and transfer tax is also 2% most places outside of Philly and Pittsburgh. 

  • Bill ExeterBusiness Member
    1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
    11y

    @Jean Bolgerand @David Krulac are both right on the money.  The state of PA does not recognize 1031 Exchange transactions.  However, as David pointed out, the state tax rate is very low, so you would defer the Federal tax but pay a low state tax if you structure a 1031 Exchange on the sale of PA property.

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  • Munhall, PA · Member since 2013 · 68 posts · 20 votes
    11y

    The western PA area is a great market to invest in right now. Honestly its been pretty steady for the last several years as we were one of the few markets that weren't hit "that hard" back in the late 00's. Single family and multi-unit rentals are all the craze out here right now and the fix n flip market is starting to heat back up (so long as you get in at the right price point obviously). 

  • Danville, PA · Member since 2015 · 48 posts · 10 votes
    10y

    Did you ever happen to move back to Central PA? I am currently located in Danville. I'm currently primarily looking in the Berwick area for multi-families because of the high cash flow.

  • Investor · Woodland Hills, CA · Member since 2014 · 10 posts · 2 votes
    10y

    I have family in Sunbury and Lewisburg. Also wondering if you happened to make it back out there or at least continued your investigation of the market. I'm curious as well to the strength of the student housing markets around the universities there and if mulitfamilies in those areas are viable investment plays.

  • Investor · Milton, PA · Member since 2013 · 110 posts · 20 votes
    10y

    Most of the universities are transferring all student housing to on campus over the next few years.  Good news is that leaves a gap to be able to get ex student houses for cheaper and make them better for small families or young professionals.  

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