Scranton is the textbook post-industrial Pennsylvania metro — historically the center of US anthracite coal mining, now a healthcare-and-education economy that's rebuilt around Geisinger and the University of Scranton (with a cultural footprint enhanced by being the setting of NBC's "The Office"). The 4.37% cap rate at a $220,000 median price keeps the 0.59% rent-to-price ratio above the 1% rule in many submarkets. Population growth at -0.2%/yr is essentially flat.
Employment is anchored by Geisinger (the dominant regional medical system serving Northeastern Pennsylvania — Geisinger Community Medical Center plus the broader Geisinger network is one of the larger US integrated health systems), the broader Moses Taylor Hospital and Regional Hospital of Scranton, the University of Scranton (private Jesuit university), Marywood University and Lackawanna College, the broader Lackawanna County government, Tobyhanna Army Depot nearby (the Army's major communications-electronics depot — a meaningful federal-contractor employer in nearby Tobyhanna), the broader logistics economy tied to the I-81 / I-380 / I-84 intersection (Scranton is well-positioned for distribution to NYC, Philadelphia, and the broader Mid-Atlantic), and a meaningful manufacturing base. Joe Biden was born in Scranton, which has driven some federal-attention and modest tourism. Submarkets stratify cleanly: the Hill Section and Green Ridge are walkable urban-historic with strong appreciation; the broader Dunmore and Clarks Summit areas are premium suburban-school zones; the West Scranton and Minooka areas are family-school suburban; the South Side and parts of central Scranton offer deeper-value workforce inventory with significant operational complexity tied to older coal-era housing stock.
Pennsylvania property tax at 1.44% is moderate at the state level. Lackawanna County and Scranton city historically had elevated tax structures tied to the city's past fiscal distress. PA state income tax is flat ~3.07% plus local Earned Income Tax. Insurance is reasonable but verify winter / freeze deductible structure. The structural advantages: Geisinger employment is genuinely durable; the I-81 logistics corridor employment is structurally growing; PA tax structure is favorable; cost basis is among the lowest in the East Coast. The structural risks: population trajectory has been declining for decades; older housing stock from the coal-mining era requires honest capex assumptions (Scranton has a particularly high concentration of pre-1940 housing); subsidence issues from historical underground mining can affect specific properties — verify mining maps before purchasing in some neighborhoods. Operate Scranton with local relationships and conservative reserves; for cash-flow operators willing to do the work, the math genuinely works.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Scranton's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $220,000, the $1,300/mo rent produces only $801/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($44K at 7%) would result in approximately $-369/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
Property taxes consume 20% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Scranton a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
All figures below are computed from Scranton's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 1.44% effective rate on the $220,000 median price, the annual tax bill is $3,168 — that's above national average (+36% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If Scranton continues appreciating at 1.9%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $220K | $1,300 | 4.4% |
| Year 1 | $224K | $1,339 | 4.4% |
| Year 2 | $228K | $1,379 | 4.5% |
| Year 3 | $233K | $1,421 | 4.5% |
| Year 4 | $237K | $1,463 | 4.6% |
| Year 5 | $242K | $1,507 | 4.6% |
Same median-priced Scranton property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $220K | $801 | $9,611 | 4.4% |
| 20% down conventional @ 7% | $51K | $-369 | $-4,434 | -8.8% |
| 25% down DSCR @ 8.5% | $64K | $-468 | $-5,615 | -8.8% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $165K | $1,105 | $7,201 | 4.4% | $600 |
| At median | $220K | $1,300 | $7,995 | 3.6% | $666 |
| Above median (~125% price) | $275K | $1,495 | $8,790 | 3.2% | $732 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Scranton's historical appreciation rate of 1.9%:
On a $44K down payment, that's a 29.0% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Scranton, not generic boilerplate:
Pre-filled with Scranton medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Scranton.
Scranton, PA has a population of 76,089 and has been growing at -0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $220,000 paired with median rents of $1,300/mo produces an estimated cap rate of 4.37%.
Property taxes at 1.44% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 6.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.5x, homes cost about 5.5 times the local median income of $40,200. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 1.9% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Scranton presents moderate opportunities. Cap rates near 4.37% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.