"5 Markets Sure to Grow in 2012" (Pittsburgh, Washington: real estate market, rent)

[Goodjules]

I work for a home remodeling company. The latest issue of Professional Builder magazine says that Pittsburgh is #5 on Veros' list of appreciation expected in US real estate markets for 2012. Here's the website where PB got the data: Market Forecast - Veros Real Estate Solutions

[BrianTH]

Hard to argue with that conclusion in light of recent trends.

By the way, they identified Pittsburgh, Washington, and Boston as the strongest large city markets, which is a familiar list from our discussions of educational attainment among younger people. That may not be entirely coincidental.

[Aqua Teen Carl]

So long most livable city status.

[Goodjules]

Originally Posted by Aqua Teen Carl

So long most livable city status.

They're predicting 1.9% apprciation. I think that's a good rate of growth. It's not so large that it will make things unaffordable or create a bubble.

[UKyank]

I think Washington's status on all such lists will be wholly dependent on which way the election winds blow in the coming years.

[BrianTH]

Originally Posted by Aqua Teen Carl

So long most livable city status.

These trends are grinding down our biggest single advantage, but it is still going to take a long time for that advantage to disappear entirely.

[BrianTH]

Originally Posted by UKyank

I think Washington's status on all such lists will be wholly dependent on which way the election winds blow in the coming years.

A cynical person might point out we've had a lot of different election results over recent years with the same basic outcome.

[gg]

Originally Posted by juliegt

They're predicting 1.9% apprciation. I think that's a good rate of growth. It's not so large that it will make things unaffordable or create a bubble.

Not even close to the rate of true inflation. Also, considering the massive taxes required to hold a property here, there is actually a negative appreciation situation. In other words, you pay more to own than what you will ever get back. Those silly studies don't consider property tax that eats away at any profits that might be had. There won't be any.

[SteelCityRising]

Originally Posted by UKyank

I think Washington's status on all such lists will be wholly dependent on which way the election winds blow in the coming years.

Ask just about any Northern Virginian (with the exception of one or two who may come into this thread proclaiming I'm wrong, as usual, because they moved to NoVA simply because it's super rad awesome) why they moved to the area, and you're likely to hear a cacophony of "Career opportunity"; "Job"; "Work"; "Advancing in my profession"; etc. I don't really believe an area which prides itself on "Work" as its #1 appeal has true "staying power". Surely there has to be more than life than working 70 hours per week to make lots of money to acquire more stuff than the Jones's next-door, right? Pittsburgh, on the other hand, attracts many people who are looking to find some semblance of "coziness" or "quirkiness". Pittsburgh's neighborhoods are extremely unique. Our people are one-of-a-kind. I've been living here over a year, happily, even though I'm drastically underemployed. I was gainfully-employed in NoVA, but even so I was unable to afford a comfortable standard of living. In Pittsburgh I'm earning about 1/3 what I was earning in NoVA, but I'm living more respectably.

If nothing else I'm worrying that all of the "hype" we're starting to get is going to drive housing values upwards in the next 5-10 years to the point where "housing affordability" becomes a negative rather than a positive in our rankings. Just look at alleghenyangel as a prime example. He moved here only a few years ago and easily found a liveable $10,000 rowhome. Every time I find that rare liveable home for $25,000-$30,000 in this area it seems to sell quickly. A 1-BR home behind me that needed work, had a tiny lot, and was on a busy road a few doors down from a heavily-blighted building sold for $45,000. That home in Hazelwood my partner and I dreamt of making our own sold. Other homes I'm interested in are being listed as "Contingent" online daily.

I don't want a castle. I want a house that needs work (nothing too extreme to the point where the foundation is collapsing or anything) and that is affordable to someone like me who is considered "low-income" (I net just under $2,000/month but have $1,500/month in obligations---including my $550/month rent payment). One of the primary reasons I moved to Pittsburgh is because I'd NEVER be able to afford a home of my own in NoVA on my lone salary, and after nearly two years I struck out in the dating pool. In Pittsburgh not only did I have two guys vying for me but I also saw the success that people like alleghenyangel had had with bonding with their decaying (yet safe) neighborhoods by purchasing their own homes for decent pricing, and I, too, was drawn here. I have nearly $3,000 saved for a down payment on a home. That would have been a laughable amount for ANY property in NoVA. In Pittsburgh $3,000 down on a $20,000 home that's liveable and structurally-sound but in dire need of updating/TLC isn't quite so far-fetched (yet). I fear that in just a couple more years, though, ALL of the "bargains" here will have been snatched up by investors looking to create a Pittsburgh-specific housing bubble, driving up housing prices so those of us seeking to enter the market as first-time home-buyers will be unsuccessful and will once again have to relocate to cheaper pastures (dare I say Youngstown?)

[BrianTH]

Originally Posted by h_curtis

Not even close to the rate of true inflation.

That's actually extremely close to expected inflation (just a little over--which is normal):

Cleveland Fed Estimates of Inflation Expectations :: Federal Reserve Bank of Cleveland

In other words, you pay more to own than what you will ever get back.

I don't want to repeat the whole other thread, but of course your primary return is the rent you don't have to pay, and the relevant question is thus whether owning would cost more or less than renting.

Generally, the idea that you would get a real return on residential property without considering the value of living there (whether internalized or through renting it out) is really quite strange.