Will you become a victim of Pittsburgh's housing boom? (Washington: foreclosures, rent)

[selltheburgh]

Originally Posted by 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.

I'm not investing in those areas, but I'm saying that if people get priced out of everywhere else, then those areas will eventually see spillover. There's enough abandoned or under utilized property in this city that we could have a population boom and probably still not see all of it full.

[Hopes]

Originally Posted by eccotecc

Hope,

Please help us to understand your logic.

I don't believe the natural gas exploration will cause an outright housing boom in Pittsburgh similar to booms experienced in other regions that were caused by people escaping high cost of living because Pittsburgh is already an energy headquarters for the region. Any increases in jobs will merely replace population lost after the collapse of the steel industry, but the new population will be spread throughout the region, not centralized in Allegheny County because people working in energy can and will be living throughout the region since most of the area's oil and gas companies have offices in the outlying areas, not downtown.

Gulf Oil was a big deal. It was one of the top seven oil companies, and one of the largest manufacturing companies in the nation. It had 58k employees throughout the world. When Gulf was bought by Chevron, an entire skyscraper was emptied within just a couple of years. This was at the same time the steel industry crashed. Yet Pittsburgh is still a "capital" for what steel industry remains in the US, and many of those service companies still remain in this region. The same goes for the oil and gas industry too. I know because I have worked in both the oil and gas industry and the steel industry here. I'm aware of where suppliers are located throughout the country for both industries.

Originally Posted by 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.

Totally agree. If there were a true housing boom, Pittsburgh would experience significant suburban sprawl, and some urban neighborhoods wouldn't be gentrified.

[eccotecc]

Hopes,

Thanks for your reply. The Marcellus shale is only one facet of a multi-faceted incentive for motivating people to move into the Pittsburgh area.

Pittsburgh is highly desirable for its quality of life. This alone is enough to interest some to move to the area. Cities such as LA, NYC, and DC, are expensive and a hassle to live in. Retirees don't want this hassle so they are looking to relocate. They'll bring with them the equity from the sale of their homes. Retirees want to live close to services and entertainment. That would mean they would probably be looking at the core area of the city. These are the quality of life issues that are being promoted in the print media.

I can list many other examples but natural gas production is only one area that'll promote growth but not the only one.

[gg]

I think it is highly unlikely that people in the gas industry would live in the city limits. Why would they subject themselves to the extra taxes and much of the time they will be driving out of the area anyway.

[eschaton]

I'm not sure being priced out of the market makes someone "a victim." Yes, it means you can't buy houses in a given area perhaps, but the true victims are those who pay more than a house is worth, and then are underwater when real estate prices collapse.

Nevertheless, the dynamic you talk about has already happened in many places. Manchester is one of the clearest examples. The older housing stock has some of the best Victorians in the city (much larger than the Mexican War Streets on the whole), and everyone seems to believe that in another 20 years time it's going to be a mixed-race, upper-middle class neighborhood. As a result, real-estate speculators have screwed up the local market, and made it a difficult neighborhood for "ghetto conquistadors" to enter into. So you have the strange juxtaposition of beautiful fixed-up houses sitting empty waiting to be flipped, and blighted houses with great potential priced too high for those looking for a Victorian project home.

[eccotecc]

h_curtis,

The gas employees I'd see living in the city would be more administrative in nature. I'm referring to engineers, accountants, lawyers, and administrative support staff. There are a large number of players in the industry. I've been studying the Marcellus shale players looking for potential investment opportunities. BTW...Consol isn't on my radar.

[Hopes]

Originally Posted by eccotecc

Hopes,

Thanks for your reply. The Marcellus shale is only one facet of a multi-faceted incentive for motivating people to move into the Pittsburgh area.

I'm well aware. I was merely responding to your specific post speculating on gas exploration's impact.

Originally Posted by eccotecc

Pittsburgh is highly desirable for its quality of life. This alone is enough to interest some to move to the area. Cities such as LA, NYC, and DC, are expensive and a hassle to live in. Retirees don't want this hassle so they are looking to relocate. They'll bring with them the equity from the sale of their homes. Retirees want to live close to services and entertainment. That would mean they would probably be looking at the core area of the city. These are the quality of life issues that are being promoted in the print media.

I've already shared my thoughts on this. I think Pittsburgh's undesirable geographic location will prevent an all out boom that will significantly influence the cost of living here. That's a good thing too because too many retirees will be a drain on our economy. Our city already has a aged population. Pittsburgh is labeled a dying city because the death rates hinder the growth rates. The last thing we need are more retirees.

[gg]

Originally Posted by eccotecc

h_curtis,

The gas employees I'd see living in the city would be more administrative in nature. I'm referring to engineers, accountants, lawyers, and administrative support staff. There are a large number of players in the industry. I've been studying the Marcellus shale players looking for potential investment opportunities. BTW...Consol isn't on my radar.

I know Range Resources isn't in the city they are way down in Scottsdale, so that is one that is highly unlikely to have people living in Pittsburgh and commuting outward. Most of that industry wouldn't be in the city proper.

[Hopes]

Originally Posted by eccotecc

The gas employees I'd see living in the city would be more administrative in nature. I'm referring to engineers, accountants, lawyers, and administrative support staff. There are a large number of players in the industry. I've been studying the Marcellus shale players looking for potential investment opportunities. BTW...Consol isn't on my radar.

Most of the gas companies are located in the outlying areas where office space is cheaper and more convenient to where they do business in the fields.

[Hopes]

Originally Posted by h_curtis

I know Range Resources isn't in the city they are way down in Scottsdale, so that is one that is highly unlikely to have people living in Pittsburgh and commuting outward. Most of that industry wouldn't be in the city proper.

Their regional office is in Canonsburg, PA. I consider that an outlying area. I agree that few of employees will live in the city proper. While some might chose to live in Allegheny County, most employees are likely to live in surrounding counties, especially with Peters being a great school district.