Will you become a victim of Pittsburgh's housing boom? (Canonsburg: sale, lawyers)

[Goodjules]

Originally Posted by eccotecc

Hopes,

I hope you're right for the sake of those who are or will be getting into the housing market. I've lived through three of these housing cycles here in California, and I'm saying Pittsburgh is in the eye of a perfect housing storm.

Hopes, and since you've brought up the natural gas exploration, I foresee Pittsburgh becoming a regional headquarters site for the industry and those industries that support it.

Eccotecc, I have to agree with you. It is very reminiscent of previous booms in CA. Especially with the natural gas industry bringing in both white collar and blue collar jobs and the infrastructure needed to support the industry. Not to mention the health care and education sectors that are already strong in the area. While the cost of housing there is low enough for me to semi-retire, I plan to keep working for as long as I can when I relocate. I'm only 55. I am feeling like I need to act quickly to get in on the ground floor of what could be a booming market in the not too distant future.

[onwardandupward]

So this is just one person's opinion, but I have to agree also with eccotecc. I have a rental property in East Liberty, and I have had no problems finding tenants, even though many natives are still afraid of the area. I rent to graduate and medical fellows/residents, generally, so they often only stay a year or two. In-between tenants, I've been able to raise my rents to match market prices and to cover the prospective increase in taxes due to the re-assessment with no problems whatsoever.

I also was in graduate school with a number of students who wanted to stay in Pittsburgh after experiencing the high rents of D.C., Boston, NYC and other major cities. Most who have stayed have bought properties as well, as they see the handwriting on the wall.

[Hopes]

Originally Posted by eccotecc

Hopes, and since you've brought up the natural gas exploration, I foresee Pittsburgh becoming a regional headquarters site for the industry and those industries that support it.

Originally Posted by juliegt

Eccotecc, I have to agree with you. It is very reminiscent of previous booms in CA. Especially with the natural gas industry bringing in both white collar and blue collar jobs and the infrastructure needed to support the industry. Not to mention the health care and education sectors that are already strong in the area. While the cost of housing there is low enough for me to semi-retire, I plan to keep working for as long as I can when I relocate. I'm only 55. I am feeling like I need to act quickly to get in on the ground floor of what could be a booming market in the not too distant future.

It may surprise you to learn that Pittsburgh has always been a regional headquarters for many oil and gas businesses. It has also been the actual headquarters too. Never heard of Gulf Oil? What do you think Consol is? You might not even know of some regional offices because their regional divisions are often separate entities under a different name or via acquisition of smaller firms. Pennsylvania has a rich oil and gas history. How do you think the Mellons made their fortune? Granted "natural" gas hasn't been in the forefront for quite some time, but most companies were already well established in this region due to the rich resources here, not just in oil but natural gas too. The business of energy isn't new to Pittsburgh.

Originally Posted by BrianTH

Pittsburgh is about the same distance from the NYC area as Medford, Oregon is from the Bay Area. It is even closer to Philly and Baltimore/Washington.

It isn't really the distance that has mattered, as the conventional wisdom that moving off the coast and into the "Rust Belt" would be a move to a backwards, stagnant area. If that conventional wisdom changes, things could get interesting.

I purposely avoided mentioning that Pittsburgh isn't geographically desirable because I figured some people wouldn't be able to handle the truth.

[eccotecc]

Hope,

Please help us to understand your logic.

[Tirade]

With this type of economic advantage, through no fault of their own, they will be driving up the price of desirable housing to a height never experienced in the history of Pittsburgh.

Sorry to nitpick, but I don't think this is true when you consider the number of very wealthy industrialists who lived in the city prior to WWII. Adjusted for inflation, the mansions they built and lived in were far more expensive than all of the other homes on the market now.

[selltheburgh]

I don't think it'll happen, but it is possible. I've been buying up property as a future nest egg. If it happens, I'll be able to payoff a mountain of mortgage debt just from the appreciation equity.

People won't be priced out because there are still soooo many incredibly under valued areas. Good or bad areas, they should still be more expensive than they are: Sheradan, Elliott, other west end areas, mt Oliver, carrick, Knoxville, Allentown, mckees rocks, perry hilltop, Troy hill, Garfield, hazelwood, Lincoln, Swissvale, beechview, Brookline, homewood, Brentwood, sharpsburg, shaler, etna, millvale, penn hills, Baldwin.

[PeterRabbit]

Real estate anything has always been about location. The values in the areas you mention have kept going down during the past 30-40 years - yet maintained the same high taxes.

The highest and best quality reaps the most magnificent rewards. Nobody is killing each other to get their hands on a property where you are building your nest egg. In the best of areas, taxes outpace the property appreciation. Yet there is a desire to pay over market to get that ideal location.

[eccotecc]

selltheburgh,

If properties in the metro area were to increase by 50%, I assure you the less desirable areas would also increase by the same percentage. This is fine if a person is already in a property and they can roll their equity out of one home and into another. For a first time homeowner this isn't the case. Another concern is wages. First time buyers' wages aren't at their peak, usually, so a larger percent of disposable income goes to paying for the principle, interest, taxes, and insurance. This then becomes a more dire issue because wages never increase as fast as the cost of homeownership. So what does this mean, first time homeowners are priced out of the market. What should a person do? I suggest a person start building up their equity as soon as possible and for a young homeowner that usually means sweat equity.
I further suggest a person buy in a marginal location that has potential for becoming desirable and put their heart and soul into their home. One thing I don't suggest to a new buyer and that is to be house poor. Never ever, ever spend more than 30% of net income on your PITI.

[sparrowmint]

Originally Posted by eccotecc

selltheburgh,

If properties in the metro area were to increase by 50%, I assure you the less desirable areas would also increase by the same percentage.

Yeah, this fact seems to be missed by some people. I don't think Pittsburgh is going to have a legit boom, but if it was to boom like Portland... there were some real pieces of crap in Portland that would go for well over $100-150-200K, in bad neighbourhoods (by Portland standards, and like most cities in this country, neighbourhoods were deemed to be bad based on the percentage of black residents, sadly). And some of these houses were falling apart and wouldn't go for much more than $20K here in equivalent neighbourhoods. Even down in Salem, I had a misguided acquaintance buy one hell of a fixer upper in an iffy neighbourhood for $150K, and that was at the low end of prices at that time. Anything less than that was a mobile home in a park (with lot fees), a 1 bedroom, or a shack that probably should have been condemned. I think prices have fallen slightly since that time, but still a very high percentage of homes under $100K are mobiles.

[BrianTH]

Just an idle note, but because our neighborhoods and municipalities are often quite small around here, a relatively long list of still-inexpensive places doesn't necessarily amount to a huge amount of area in total. I'm not saying it will happen overnight, but for that reason expanding zones of redevelopment and gentrification could sweep over quite a few places. All this is in addition to the point that even in places outside the redevelopment zones, prices will likely go up in response to a general demand-driven appreciation dynamic.