As Pittsburgh home sales dip, no agreement on why (rent, insurance)

[PreservationPioneer]

What strikes me is that many are willing to spend $800+ to rent an ugly house in a questionable location, but fewer are interested in buying said house for $300-400 a month (if that).

[Knepper3]

Oh they are interested, they likely just cant qualify. We have about 10 clients we are keeping in contact with as they try to get their scores up to qualify plus then they need to have some amount of savings for closing. Even with seller assist they usually need a few thousand saved.

[PreservationPioneer]

That is interesting. Most people I know in their 20s and early 30s have very little savings, thus do not have the emergency fund, down payment, and closing costs needed to buy a home. But I also feel like people are extremely picky about what they will consider buying vs. what they will consider renting. For instance, a lot of people have no issue living in a one bedroom apartment with a galley kitchen and no yard, but would not consider a house with the same amenities (for less money). Maybe I'm wrong, though. I do talk to a lot of younger people I work with about housing, as I have owned three houses and I am knowledgeable about the neighborhoods.

[corpgypsy]

Originally Posted by PreservationPioneer

That is interesting. Most people I know in their 20s and early 30s have very little savings, thus do not have the emergency fund, down payment, and closing costs needed to buy a home. But I also feel like people are extremely picky about what they will consider buying vs. what they will consider renting. For instance, a lot of people have no issue living in a one bedroom apartment with a galley kitchen and no yard, but would not consider a house with the same amenities (for less money). Maybe I'm wrong, though. I do talk to a lot of younger people I work with about housing, as I have owned three houses and I am knowledgeable about the neighborhoods.

It also could be that some people pay attention to resale potential when purchasing and do not desire to have an anchor around their neck when an opportunity presents itself that might require relocation.

[Paul2421]

Originally Posted by PreservationPioneer

That is interesting. Most people I know in their 20s and early 30s have very little savings, thus do not have the emergency fund, down payment, and closing costs needed to buy a home. But I also feel like people are extremely picky about what they will consider buying vs. what they will consider renting. For instance, a lot of people have no issue living in a one bedroom apartment with a galley kitchen and no yard, but would not consider a house with the same amenities (for less money). Maybe I'm wrong, though. I do talk to a lot of younger people I work with about housing, as I have owned three houses and I am knowledgeable about the neighborhoods.

you should have the bolded when you have a home, but you don't have to.

regardless, i think the biggest factor here is that if you buy a home with a $400 payment and the roof goes, you now blew several years of those "savings" compared to renting. people our age have heard so many horror stories that they pay extra for the piece of mind that this won't happen. there is a lack of trust in the whole process that is somewhat justified. it is easy to look at it as someone that has gutted three houses and built them back up but most don't have the time or connections to learn these things. plus "buying" a house means buying into the area, commute, etc. for years.

[corpgypsy]

Originally Posted by Knepper3

Agree, my wife is the FT agent and she has had about 10 people this year just stop looking because of the low inventory. Either tired of fighting multiple offers or just nothing close to what they want. No one has brought up taxes and really it's a small part of the overall. If someone wants to own that isnt going to deter them.

With all due respect, I totally disagree with you. Taxes are not trivial. The sample of people referenced in the following article would dispute your point, as well.

http://www.post-gazette.com/business...s/201807290022

[Knepper3]

It is trivial to the majority of buyers, most are focused on their monthly payment as someone else mentioned. That extra tax amounts to little difference. Most people are not willing to walk away from something that is what they want for maybe $10-20 more a month especially in this market. If you are talking investment property or something else maybe but for most home buyers they don't even ask (though we bring it up), if they are buying somewhere for the school they usually expect higher taxes and if they are looking somewhere else then there is usually a reason. Do people care? Yes but it's not a driving factor in the sales dip which is the topic of this thread.

[Knepper3]

Originally Posted by Paul2421

you should have the bolded when you have a home, but you don't have to.

regardless, i think the biggest factor here is that if you buy a home with a $400 payment and the roof goes, you now blew several years of those "savings" compared to renting. people our age have heard so many horror stories that they pay extra for the piece of mind that this won't happen. there is a lack of trust in the whole process that is somewhat justified. it is easy to look at it as someone that has gutted three houses and built them back up but most don't have the time or connections to learn these things. plus "buying" a house means buying into the area, commute, etc. for years.

To me it makes no sense but I understand, my brother had a house in Grove City then got divorced. He had a hell of a time trying to sell and hated upkeep and expenses that kept coming up. He's like most of us, not rich, and for him it was more important to know what his yearly expenses would be. He also hates working around the house so renting makes senses and he's said he will never buy again.



My mom is similar, she's older and had a stroke last year so not as able as she was. She is moving to a senior center and selling her townhouse because she doesnt want the stairs and cant deal with the upkeep. It' also less stress, if something breaks there is someone to call on staff who she doesnt feel like she is bothering and can (hopefully) respond right away.


I'm also not a roamer, some people like to have the flex to leave and with a house you are definately tied down at least until you have built up equity .

[PghYinzer]

Originally Posted by corpgypsy

With all due respect, I totally disagree with you. Taxes are not trivial. The sample of people referenced in the following article would dispute your point, as well.

Some new home buyers are getting a surprise tax bill in Allegheny County | Pittsburgh Post-Gazette

I am not sure why anyone is surprised by this, but a lot of people want to live in a $350k house but only pay taxes as if it was worth $150k. If you want to pay taxes on a $150k house, buy a $150k house. You pay taxes on the value of your house, so if you pay $350k for a house, isn’t it worth $350k? Or are you a sucker and overpaid?

[pittsburghaccuweather]

Originally Posted by pittsburghaccuweather

If the low inventory is the problem, why aren’t builders jumping on this opportunity to build new construction on the many vacant lots throughout the city? The Pittsburgh area has the least amount of newly constructed homes at anytime in recent memory. This was according to data complied by Pitt economic professor Chris Briem.

Is the demand really that great or is it just that everybody is looking in a handful of neighborhoods?

Originally Posted by kettlepot

The low inventory discussion piqued my interest, so I did some investigating, and offer a comparison of 5 cities: San Francisco, San Diego, Columbus, Charlotte and Pittsburgh.

San Francisco and San Diego are two obviously supply constricted cities (and I live in San Diego so I was interested in the comparison ). Charlotte and Columbus are two cities without the land supply constraints of California with Columbus being a geographic peer of Pittsburgh without Pittsburgh's issues with secular decline.

Using realtor.com, I compared the For Sale inventory of houses and condominiums within the city limits on 8/7/18 rounded to the nearest 100, and the 2017 population estimate from Wikipedia rounded to the nearest 1000.

San Francisco
Population: 884k
Inventory: 900
982 residents to each house/condo for sale

San Diego
Population: 1420k
Inventory: 2700
526 residents to each house/condo for sale

Columbus
Population: 879k
Inventory: 2500
352 residents to each house/condo for sale

Charlotte
Population: 859k
Inventory: 4400
195 residents to each house/condo for sale

Pittsburgh
Population: 302k
Inventory: 3300
92 residents to each house/condo for sale

The conclusion I have is that supply constraints aren't the issue driving down sales, but buyer pickiness could be. Perhaps, for so many years Pittsburgh buyers had the pick of the lot and now they don't. While that might feel like a supply constraint to buyers, objectively it really isn't. Still, I understand it's all a matter of perspective, but a supply constrained market looks more like San Francisco and San Diego which have 5x to 10x more people per house on the market.

Originally Posted by PreservationPioneer

Yes, buyer pickiness, and probably remembering a time not so long ago when you could buy a house in Lawrenceville or Bloomfield for $50k.

Originally Posted by _Buster

Pgh is one market where buyer pickiness is probably more serious concern than just the house style or exact location -- since there are still a lot of old remuddled/ugly houses with repair and maintenance concerns. To me it doesn't matter if the inventory is there on the market, if it's inventory that almost nobody is going to want to buy.

Originally Posted by PghYinzer

I don't even think its pickiness but general livability. Not everyone can handle a full gut remodel, so yes there are houses on the market but they are not really on most people's radar, neighborhood aside.

Originally Posted by Knepper3

I wouldn't say picky either, many simply have a price range with a certain general area and don't want to have to do work when they move in. I think it just depends on those general areas, some higher crime/lower school ranking areas sure there is inventory but that isn't where most are looking. Instead they end up sitting on the sidelines. My wife's clients that have taken a break the last 6 months were looking in pretty broad areas and when they found one in their price range that was livable would jump but so would several others and loosing multiple offers gets depressing

Originally Posted by corpgypsy

It also could be that some people pay attention to resale potential when purchasing and do not desire to have an anchor around their neck when an opportunity presents itself that might require relocation.

So here is what I take from all of these comments. There seems to be agreement among posters here.

1. Most homebuyers are only looking in certain neighborhoods. And they are only wanting a home in that area.
2. There is a lot of homes needing a lot of work. Pittsburgh lacks move in ready homes desirable to buyers.
3. People don’t have confidence to purchase or invest in the borderline neighborhoods or non trendy neighborhoods.
4. Prices are inflated due to the lack of move in ready condition homes.
5. The housing crisis has more to due with good condition move in ready homes than it does a population surge.
6. All of the cities compared to Pittsburgh above truly have a housing crisis. Those numbers of homes available with overall population is staggering. Cities three times the size and are constantly put down on this board for not having character. Boy it seems any of those cities would be a good investment if you were willing to buy now.


And finally this is telling about the true housing of Pittsburgh and answers the amazon question. We don’t have the housing. Maybe the tech geek was right.

https://triblive.com/local/allegheny...-in-pittsburgh