1031 Exchange in Johnstown MSA
The Johnstown MSA presents significant challenges for 1031 exchange investors with extremely high effective property tax rates (10.13%), declining property values, and economic distress in this post-industrial Pennsylvania market.
Population
133,472
Key Industries
Healthcare (Conemaugh), Government, Manufacturing (declining)
Table of Contents
Information is for educational purposes only. Consult qualified professionals for specific advice. This market presents significant investment risks.
Local Tax Considerations
Property taxes, transfer taxes, and local incentives
Property Tax Rates
Average Rate
10.0% - 10.5%
Assessment Method
Assessed Value (Pennsylvania Property Tax Code)
MSA rate (10.13%) vs State average (1.26%)
+703% above state average
Transfer Taxes & Fees
Transfer Tax Rate
1% state transfer tax
Pennsylvania real estate transfer tax of 1% plus local recording fees and title insurance costs
Local Tax Incentives
Pennsylvania Economic Development Incentives
Various state incentives for business development and job creation
Eligibility: Qualifying commercial and industrial developments
Johnstown Economic Development
Limited local incentives for business expansion
Eligibility: Companies creating jobs and investing in the area
Opportunity Zones
Number of Zones
3
Key Locations
- Downtown Johnstown
- East Johnstown
- South Johnstown
Opportunity Zones offer significant tax benefits for long-term investments, including deferral and potential elimination of capital gains taxes.
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Market Profile Dashboard
Economic indicators and market trends
Population
133,472
Growth: -2.8% annually
Median Income
$33,863
Unemployment
6.8%
Job Growth
-1.5% annually
Economic Drivers
Market Trends
Median Home Price
$44,000 - $109,000
Average Rent
$701/mo
Cap Rates
Negative due to taxes
Demographics
Median Age
45.4 years
Bachelor's Degree+
14.9%
Owner Occupied
52.8%
Property Type Analysis
Investment opportunities by asset class
Multifamily
Extremely challenging due to 10.13% effective property tax rate destroying cash flow despite low acquisition costs.
Market Metrics
- Cap Rates: Negative
- Vacancy Trends: High vacancy due to population decline and economic distress
- Demand Forecast: Declining demand due to population out-migration
Risk Factors
- Extreme property tax burden (10.13%)
- Population decline reducing demand
- Economic distress limiting tenant income
- High vacancy rates
Opportunities
- Opportunity zone benefits in select areas
- Extremely low acquisition costs
Single-Family Rental
Not viable for investment due to extreme property tax burden exceeding potential rental income.
Market Metrics
- Cap Rates: Negative
- Vacancy Trends: High vacancy due to economic out-migration
- Demand Forecast: Declining demand as population continues to leave
Risk Factors
- Property taxes often exceed rental income
- Population decline reducing tenant pool
- Low rental rates due to economic distress
- High maintenance costs on older housing stock
Opportunities
- Opportunity zones may provide some tax relief
- Potential for land banking if economic recovery occurs
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Downtown Johnstown
Historic downtown core with opportunity zone designation but significant challenges
Investment Thesis
Opportunity zone benefits may offset some tax burden, but extreme property taxes and economic decline create substantial risks.
Median Price
$83,000
Price Growth
-17% YoY
Rental Yield
Negative after taxes
Days on Market
25 days
Key Highlights
Development Pipeline
Limited development activity due to economic challenges
West End
Residential area with slightly higher property values but same tax burden
Investment Thesis
Marginally better property values but still subject to extreme property tax burden making investment returns challenging.
Median Price
$124,900
Price Growth
-36.7% YoY
Rental Yield
Negative after taxes
Days on Market
30 days
Key Highlights
Development Pipeline
Minimal new development
East Johnstown
Mixed residential and commercial area with opportunity zone benefits
Investment Thesis
Opportunity zone designation provides some tax benefits, but fundamental economic challenges remain significant.
Median Price
$98,857
Price Growth
+2.8% YoY
Rental Yield
Negative after taxes
Days on Market
28 days
Key Highlights
Development Pipeline
Limited opportunity zone development
Suburban Areas
Outlying residential areas with marginally better conditions
Investment Thesis
Lower density areas may have slightly better rental demand but still face extreme tax burden and economic challenges.
Median Price
$106,205
Price Growth
+4.1% YoY
Rental Yield
Negative after taxes
Days on Market
32 days
Key Highlights
Development Pipeline
Minimal suburban development
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Compare Markets
See how this MSA stacks up against others
Compare Markets
| Metric | Johnstown (Current) | Youngstown | Wheeling | Altoona |
|---|---|---|---|---|
| Population | 4.0M | 4.0M | 4.0M | 4.0M |
| Median Property Price | $750K | $750K | $750K | $750K |
| Average Cap Rate | 5.2% | 5.2% | 5.2% | 5.2% |
| Job Growth Rate | 2.1% | 2.1% | 2.1% | 2.1% |
| Rental Yield | 4.8% | 4.8% | 4.8% | 4.8% |
| Days on Market | 25 | 25 | 25 | 25 |
Frequently Asked Questions
Common questions about Johnstown 1031 exchanges
Johnstown has extremely high effective property tax rates (10.13%) due to very low property values ($44K-$109K median) combined with municipal tax rates of 52.48 mills plus county rates of 33.50 mills. The tax burden often exceeds potential rental income.
Investment opportunities are extremely limited due to the 10.13% effective property tax rate. Opportunity zones may provide some tax benefits, but the fundamental economics remain challenging. Consider this market only for specialized strategies or land banking.
Primary risks include extreme property tax burden (10.13%), ongoing population decline (-2.8% annually), high poverty rate (31.24%), limited economic growth prospects, and property taxes that often exceed rental income potential.
The economic distress significantly reduces rental demand. With 31.24% poverty rate, $33,863 median household income, and ongoing population decline, the tenant pool is limited and rental rates remain very low relative to carrying costs.
Johnstown presents extreme challenges for 1031 exchange investors due to property tax rates that often exceed rental income. Only consider for specialized strategies like opportunity zone investments or long-term land banking with full understanding of the risks involved.