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Old 07-14-2012, 09:52 AM
 
Location: 15206
1,860 posts, read 2,564,172 times
Reputation: 1301

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With all of this said and with prices in Pgh rising, they are still below the national average (especially compared to other urban areas). This creates more stability than anything. If prices are too low, then it becomes an investors market with lots of cash buyers and rentals. If it is too high, then it prices people out. I think that the increase in prices over the past decade is reflective of Pittsburgh's stable and slowly growing economy, not a lot of turnover as well as the low interest rates. It took a while, but we hit rock bottom after the steel industry collapsed and we've finally hit what most would call a recovery point.

I do predict that some areas (post-war suburban style) are going to stay stagnant or decline in value over the next decade and it has more to do with an aging population than anything. I can see areas with average to below average housing stock and a high percentage of senior citizen homeowners becoming increasingly higher rental areas. This has a lot to do with what the elderly or their children do with the houses when that time comes. Hopefully that doesn't happen and the houses turn over to younger people who can make personal modifications to them.
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Old 07-14-2012, 10:16 AM
 
Location: United States
12,390 posts, read 7,047,532 times
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Quote:
Originally Posted by selltheburgh View Post
I do predict that some areas (post-war suburban style) are going to stay stagnant or decline in value over the next decade and it has more to do with an aging population than anything. I can see areas with average to below average housing stock and a high percentage of senior citizen homeowners becoming increasingly higher rental areas. This has a lot to do with what the elderly or their children do with the houses when that time comes. Hopefully that doesn't happen and the houses turn over to younger people who can make personal modifications to them.
Yes, the Pittsburgh area has a lot of that, and the post-war suburbs are going to see more of it.

My reference about row housing and duplexes being a good deal, would only apply to the pre-war, more urban suburbs. Parts of Wilkinsburg and Swissvale come to mind, were prices are beginning to rise, and the nearby rental markets are undersupplied.
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Old 07-14-2012, 11:13 AM
 
Location: Crafton via San Francisco
3,463 posts, read 4,622,067 times
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Quote:
Originally Posted by selltheburgh View Post
With all of this said and with prices in Pgh rising, they are still below the national average (especially compared to other urban areas). This creates more stability than anything. If prices are too low, then it becomes an investors market with lots of cash buyers and rentals. If it is too high, then it prices people out. I think that the increase in prices over the past decade is reflective of Pittsburgh's stable and slowly growing economy, not a lot of turnover as well as the low interest rates. It took a while, but we hit rock bottom after the steel industry collapsed and we've finally hit what most would call a recovery point.

I do predict that some areas (post-war suburban style) are going to stay stagnant or decline in value over the next decade and it has more to do with an aging population than anything. I can see areas with average to below average housing stock and a high percentage of senior citizen homeowners becoming increasingly higher rental areas. This has a lot to do with what the elderly or their children do with the houses when that time comes. Hopefully that doesn't happen and the houses turn over to younger people who can make personal modifications to them.
Well said.
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Old 07-14-2012, 12:02 PM
 
20,273 posts, read 32,871,363 times
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I'd just reiterate that I think incomes are the most appropriate benchmark for housing prices. If housing prices, regionally or in a particular location, are just tracking income trends, then that is probably not a problem for the greater economy. Conversely, if people are starting to spend higher and higher percentages of their income on housing, then that could be indicative of a growing problem.

Of course there can be some short term fluctuations by this measure, and I understand there may be some room for a broader bounce-back/normalization from the depths of the post-steel-bust era. Still, I would hope that would ultimately not amount to all that much of a change in aggregate price-to-income levels, even if it results in relatively rapid appreciation in certain redeveloping localities.
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Old 07-14-2012, 12:39 PM
 
Location: 15206
1,860 posts, read 2,564,172 times
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Quote:
Originally Posted by BrianTH View Post
I'd just reiterate that I think incomes are the most appropriate benchmark for housing prices. If housing prices, regionally or in a particular location, are just tracking income trends, then that is probably not a problem for the greater economy. Conversely, if people are starting to spend higher and higher percentages of their income on housing, then that could be indicative of a growing problem.

Of course there can be some short term fluctuations by this measure, and I understand there may be some room for a broader bounce-back/normalization from the depths of the post-steel-bust era. Still, I would hope that would ultimately not amount to all that much of a change in aggregate price-to-income levels, even if it results in relatively rapid appreciation in certain redeveloping localities.

Isn't it true that basic needs (housing, food, medical treatments and gas) have increased in price nationally over the past 30 years at a rate much higher than incomes?
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Old 07-14-2012, 12:49 PM
 
Location: United States
12,390 posts, read 7,047,532 times
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Quote:
Originally Posted by BrianTH View Post
I'd just reiterate that I think incomes are the most appropriate benchmark for housing prices. If housing prices, regionally or in a particular location, are just tracking income trends, then that is probably not a problem for the greater economy. Conversely, if people are starting to spend higher and higher percentages of their income on housing, then that could be indicative of a growing problem.

Of course there can be some short term fluctuations by this measure, and I understand there may be some room for a broader bounce-back/normalization from the depths of the post-steel-bust era. Still, I would hope that would ultimately not amount to all that much of a change in aggregate price-to-income levels, even if it results in relatively rapid appreciation in certain redeveloping localities.
I agree, and don't think we're likely to see any real problems anytime soon. One just needs to look around the county, and they can see that there's only been above average appreciation in few areas. These prime areas with above average appreciation, were priced well below prime locations in other metros, so there is still room for them to go up, and not cause any real problems. If you look at just how low prices are in many good, but not prime locations, we could see prices climb quite a bit, and still be within a reasonable percentage of incomes.

Quote:
Originally Posted by selltheburgh View Post
Isn't it true that basic needs (housing, food, medical treatments and gas) have increased in price nationally over the past 30 years at a rate much higher than incomes?
I guess that depends on who's incomes we're talking about. If we're talking about the working class, then yes. If it's the people buying in the areas that are seeing above average appreciation, I would say their incomes are much more likely to be keeping pace with these rising costs.
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Old 07-14-2012, 01:09 PM
 
6,596 posts, read 8,914,401 times
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Quote:
Originally Posted by selltheburgh View Post
almost all were highest and best. That's the most fair way to handle it and how I did it every time I was the listing agent.
I disagree that it's the most fair way to handle it. But I can't blame you for doing it that way as the listing agent, It's a smart tactic from that side of the transaction. From the buyer's side, it can result in unnecessarily over paying and unnecessary stress by asking people for a higher bid when they are already way out of the picture (already outbid by 10s of thousands, or up against a cash - no contingency buyer).
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Old 07-14-2012, 02:09 PM
 
Location: 15206
1,860 posts, read 2,564,172 times
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Quote:
Originally Posted by ferrarisnowday View Post
I disagree that it's the most fair way to handle it. But I can't blame you for doing it that way as the listing agent, It's a smart tactic from that side of the transaction. From the buyer's side, it can result in unnecessarily over paying and unnecessary stress by asking people for a higher bid when they are already way out of the picture (already outbid by 10s of thousands, or up against a cash - no contingency buyer).
If you do it any other way, then one of the buyers will cry foul saying that you didn't give them a fair chance. No matter how it is done, people are upset and somebody loses.

Of all of those situations, I was on the buyer's side at least 60% of the time. I've had some buyers get outbid 3 or 4 times already this year. They've been above and below the list price and it just hasn't worked out yet. We're in the same situation again this weekend on a 700k house. It is surely a crazy market.

My advice to buyers is to bid the most that they are really willing to pay and know that if it doesn't appraise, they may not be able to get financing. This is all with having comps available to know whether they are in line with the current market.

On the listing side, it isn't fun either because you have frantic agents dealing with frantic buyers and they pass their stress off to me.
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Old 07-14-2012, 03:35 PM
 
11,086 posts, read 8,498,033 times
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Quote:
I do predict that some areas (post-war suburban style) are going to stay stagnant or decline in value over the next decade and it has more to do with an aging population than anything.
This isn't what happens to areas like you describe during a housing boom. What happens is this: those areas with good proximity to downtown or to public transportation (like the T) see the property bought for the land value, which at a certain phase of the boom becomes much more valuable than anything built atop it. Then the crappy houses get torn down and get replaced with big homes or townhomes.

I watched it happen from 1995-2005 in my Tampa neighborhood that used to be filled with smallish 1950's era ranches. The neighborhood was 5 miles from downtown and a short distance to 2 bridges that connected to Clearwater and St. Petersburg. The location was great. The land became worth much more than the homes.

The same thing will happen in areas with 50's era housing relatively close to the city in Pittsburgh should a boom get going. It will be a way for a homeowner to have a large modern house very close to the city.
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Old 07-14-2012, 03:45 PM
gg
 
Location: Pittsburgh
26,137 posts, read 25,777,749 times
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I did a real estate search via the MLS and it has been a little while. I was surprised to see how low the inventory was in the lower price ranges. The higher end market of $250+ is still about the same with a lot of homes, but below that it was really low inventory. In Sharpsburg for example, there were 9 homes on the market. I never saw that before. The lower end stuff has picked up. I don't feel the higher end housing has done much. The tax burden is too high for there ever to be a bull market in the more expensive homes. Even people with money have limits on how they want to spend their money. Not many want to burn a grand a month. Sure some and many can afford it, but that doesn't mean they will want to burn that money. We get VERY little in return for our tax dollars. Too much waste. Our schools are not better than anywhere else, yet we pay the most of anywhere if you consider true costs in our region. What are you going to compare teacher's salaries to, San Francisco? We pay what they pay. Go figure. Anyway, taxes are what kills this region for true growth. I don't know why people can't see that. We are in some odd funk. State liquor, huge taxes and beer distributors. Goodness. Really an odd state and region.

How would you like to be a young graduate from Pitt with that $100K loan, and you are dreaming about a home. Sure you landed that job, but forget about it. I really feel for our young folks. They have no chance. Best to have really rich parents.
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