Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've said this before, and of course it's only one person's anecdotal experience, but...
We're making about 20K more here now than we did in Colorado Springs (supposedly one of the hot cities that really exploded in the last decade), and our house costs about half as much as it would have in the Springs. Once I finally get out of school, I think it's likely that we will be making 6 figures combined, which will buy us a mansion in the 'Burgh.
Then I hear people on here complain that they can't find jobs in this city and I read endless posts about how Pittsburgh has no jobs. And yet my husband comes home from work this week and complains about the fact that he still has two open IT positions that he's been trying to fill for 6 months. He can't find takers, even at a salary of $35K, which is more than enough to buy a small house here. Who should I believe - my husband the IT manager at a large company here in Pittsburgh or complainers on an internet forum?
Lots of other people I know have managed to find jobs also, jobs which more than pay enough for them to buy a house. I also know no less than three Pittsburgh homeowner couples in which only one person works, because frankly, they don't need to have two salaries to afford to live here. How is that such a bad thing? Our whole economy used to be like that, and I personally think many people's quality of life was better then - people didn't work themselves to death, someone was home when the kids came home from school, people had cleaner houses and more nutritious meals, spent more time with family, etc.
I dunno. This economy isn't booming here like it is in other places, that's for sure. But it seems perfectly fine to me. Stable and a bit boring is a good thing in my book.
I've also read at least two different articles in the last 6 months that claimed that Pittsburgh was the least likely city in the U.S. to see a drop in housing prices due to current economic problems. This is, of course, because Pittsburgh never had a huge jump in home prices to start with, a fact often criticized here at City-Data. But again, I'm not convinced that bubbles are such a good thing for anyone who isn't flipping a house or selling to move to a cheaper city. For me personally, I'd rather see a modest 2-5% increase and not have to wonder when the rug was going to be pulled out from underneath me. And I love being able to have a nice house and still be *undermortgaged* for my income (and how many people can say that anymore these days!?)
Meanwhile, my friends in LA make twice what we do, and STILL can't afford a house, despite the fact that housing prices have dropped there in the last year or so.
I know of no major CA cities where you can get a home for $210,000. You can find those prices for condos in the outlying burbs, or in some of the mid-sized cities, or in rural areas. I live in a lower-end neighborhood in an older suburb of Silicon Valley and my house has had a huge decrease in value since 2005 when it appraised for $650,000. I am going through a divorce and I had to have my house appraised. It is valued (optimistically according to the appraiser) at $481,000. It is a 2 br, 1 ba home less than 1,000 sq ft in need of many major repairs. But the trend is downward and I hope to sell my home soon before it is worth less than what we owe on it! Plus, gas is hovering at $3.90 a gallon for regular unleaded at the cheap stations in my town. And, to top it off, today's paper said that my area has been designated as a flood zone by FEMA due to deteriorating levees. They say we will be forced to buy flood insurance to the tune of $1500 to $3000+ a year. I hope the article I read is wrong!
Even though pay is lower in Pittsburgh compared to the Bay Area (which was recently rated as having one of the highest pay scales in the nation), it still doesn't make up for the huge difference in housing costs, even when you factor in higher property taxes. I know that there are variances when you look at individual situations, but overall Pittsburgh does seem to have a lower cost of living.
But there's more to living than buying a house.
When I was home last (september 2007), I was looking at food prices and frankly -- I didn't see much difference in prices. Now -- I cook. If you are a stick a Stouffers in the microwave and open a bag of salad and call it dinner, those prices might be different, but since I don't do that I don't look at those. Milk prices very similar, egg prices were better than Safeway but not better than Trader Joes, fresh veg similar, and cat food similar. (9 cats -- big part of our budget).
No sales tax on clothing is a good thing, but honestly -- I'm not much of a shopper. (Right now I've got on a ratty old pair of Land End leggings that are too big, with holes the size of Cleveland). So I wouldn't save much there.
The household budget recommendations I have seen usually put housing at about 35% of total spendable money (meaning net of taxes and savings), give or take a few percent. Note that is higher than the recommended 28% for the purposes of mortgage calculations, but that 28% is of gross monthly income (not spendable money).
That typically makes housing the largest single category in the recommended budget, but it is also true that in theory everything else combined should be more important than housing alone (up to around twice as important, in fact). However, what has happened in some places due to the recent appreciation is that if people stick with those budget recommendations, they are finding the housing they can afford to be pretty disappointing. Indeed, some people in those places have been spending considerably more than the recommended budget amount on housing, which is one of the factors that have led to a high foreclosure rate (in addition to a lot of other things).
The upshot is that many people in these areas with good incomes (solidly middle or professional class) are finding it difficult to stay within their budgets and get the housing they were expecting their jobs to allow them to have, with the people most seriously affected being those looking for their first home in the region (e.g., young people just starting out, or newcomers to these expensive regions). And I do think unless that changes, those people will start putting a lot of pressure on employers to relocate to places where housing is less expensive.
When I was home last (september 2007), I was looking at food prices and frankly -- I didn't see much difference in prices. Now -- I cook. If you are a stick a Stouffers in the microwave and open a bag of salad and call it dinner, those prices might be different, but since I don't do that I don't look at those. Milk prices very similar, egg prices were better than Safeway but not better than Trader Joes, fresh veg similar, and cat food similar. (9 cats -- big part of our budget).
No sales tax on clothing is a good thing, but honestly -- I'm not much of a shopper. (Right now I've got on a ratty old pair of Land End leggings that are too big, with holes the size of Cleveland). So I wouldn't save much there.
So cost of living is a relative thing...
I agree! It's just that for me, my cost of housing is really high right now. I was talking specifically about housing costs. Other than gas (higher in CA), home heating/cooling (higher in Pgh due to real weather) and housing (cheaper in Pgh), I don't see huge differences in the cost of living between Pgh & the SF Bay Area. At least not in areas that matter to my budget!
I wouldn't be considering Pgh solely based on housing costs. Most of the US is cheaper than where i live now when it comes to housing. I like the city. I like the hills. I like the availability of older homes for reasonable prices and I like the art scene. Those are a few of the reasons I've narrowed my search to Pgh.
I wouldn't be considering Pgh solely based on housing costs. Most of the US is cheaper than where i live now when it comes to housing. I like the city. I like the hills. I like the availability of older homes for reasonable prices and I like the art scene. Those are a few of the reasons I've narrowed my search to Pgh.
One obvious point is that housing in most rural areas and small towns (not including the ones in the "exurb" region of big cities) is much cheaper than it is in cities, including Pittsburgh. Pittsburgh, though, has inexpensive housing as far as comparable cities is concerned, and the housing is indeed particularly inexpensive if you like historic neighborhoods near city centers.
In that sense, I do think the city is often the most attractive to people who would also like living near the center of historic cities like Boston, New York, Philly, DC, San Francisco, and so on, but who have found the prices in those areas prohibitive.
One obvious point is that housing in most rural areas and small towns (not including the ones in the "exurb" region of big cities) is much cheaper than it is in cities, including Pittsburgh. Pittsburgh, though, has inexpensive housing as far as comparable cities is concerned, and the housing is indeed particularly inexpensive if you like historic neighborhoods near city centers.
In that sense, I do think the city is often the most attractive to people who would also like living near the center of historic cities like Boston, New York, Philly, DC, San Francisco, and so on, but who have found the prices in those areas prohibitive.
Are you saying that Pittsburgh's comparable cities are Boston, New York, Philly, DC, and SFO?
Are you saying that Pittsburgh's comparable cities are Boston, New York, Philly, DC, and SFO?
Not exactly, and indeed if it was identical to those cities it would presumably be just as expensive.
Rather, the more complicated situation is that Pittsburgh during its long boom period accumulated a substantial legacy in terms of things like historic neighborhoods, cultural institutions, and so on. Then when the manufacturing sector dramatically contracted, so did the local population. But, that actually created a situation in which the local supply of those things (homes in historic neighborhoods, access to cultural institutions, and so on) is relatively large compared to local demand.
Meanwhile, those coastal cities did not go through the same dramatic boom-and-bust history as Pittsburgh, and various factors have operated to further increase the demand for, and limit the supply of, the relevant goods in those cities. And so all that is why the prices of such things are much lower in Pittsburgh. Another way to put the same point is that buying equivalent shares of this historical and cultural legacy in Pittsburgh can be done at a very large discount, thanks in fact to the bust part of its boom-and-bust cycle.
Of course Pittsburgh is not completely alone in having such a history: many other post-industrial cities in the interior of the country have followed a similar boom-and-bust track, and thus also offer similar goods for relatively low prices--but usually not quite as low as Pittsburgh. And that is because Pittsburgh is pretty far toward the end of the relevant spectrum, thanks in part to things like a relatively long boom history for an interior city (leading to a relatively large boom-era legacy) and a economy that was subject to a particularly sharp contraction in a relatively short time thanks to its heavy reliance on a particular industry (leading to a relatively sharp drop in demand for shares of this legacy).
It is, indeed, the attrativeness of being able to live in a cool old house near downtown that drew my hunny and I to the area.
I can vivdly remember the Sat morning that I was awoken, entirely too early, to my husband exclaiming, "Baby, I found where we need to move. Its Pittsburgh!" I remember thinking, groggily, "Is he on crack?". I mean I ,like so many others, perceived Pittsburgh as the town right outta Flashdance. Industrial and rough with no round edges and Yinzers running around, covered in soot, hitting on jumpsiut clad steelworker gals with dancers in the souls. As it once so colloquially called, I pictured Pittsburgh as "hell with the lid off".
We spent that whole mornng looking at houses and pictures of Pittsburgh and we were intrigued and astounded. It was like New Orleans with all of its culture and history but you could afford to live in the Garden District and you might even not be shot! Wow.
I tell you, if young Mr Ravenstal (sp?) had a brain in his head he would allot some of his meager budget to an ad campaign to help clear up the misconceptions ( that all the smoogier than La headlines don't help) about this beautiful city. I have been spreading the word in my little area of the world but i am only one person!
Yes you did, yet most were not even true during the bubble. So maybe I'm missing something? We're left with regulations, which won't explain away the bubble (since most areas had no supply problems).
Quote:
Humanoid I'm glad you aren't an economist because your economy would be very unsound.
My predictions of the markets have been completely correct, so I have no idea what you're talking about. I will say it here I predict Southern California is going to be off approximately 40% in NOMINAL terms from peak when all is said and done. Where as in real terms it will be around 60% off from peak. But let me ask how much have you made in the financial markets?
Quote:
Pittsburgh did not participate in much of the "bubble": real appreciation in the area as measured by the OFHEO's HPI (which uses the same sort of price-matching methodology as Case-Shiller) was barely over the long term historic average.
The two indexes are rather different and considering the bubble didn't register well with the OFHEO its not surprising that the downturn is not either. The Case-Shiller has predicted things much better and why I'm using it. Also, just because prices did not increase much does not mean Pittsburgh did not participate in the bubble. Namely, without the credit bubble Pittsburgh house prices could've actually gone down.
Quote:
So, I don't see much reason to believe the unwinding of the "bubble" will have more than a moderate effect on Pittsburgh prices.
Right moderate compared to other areas, my naive prediction for the area is a decrease in nominal terms of 10%~20% from peak maybe more in the order of 30% in real terms. That is moderate. But I most say again, just because Pittsburgh did not see huge price increases does not mean its not going to see huge price declines. In my mind there are three (main) factors that will bring down housing in Pittsburgh: 1.) Reduced demand due to problems in the credit markets. These problems effect the country as a whole. 2.) People (like juliegt) will stop considering a move to Pittsburgh when their local markets become more affordable (i.e., go back to historic norms) thus furthering reducing demand.
3.) Downward population growth effecting supply.
Regardless, more than likely housing in Pittsburgh is going to remain cheap. In fact about the only thing that will change that is improvements in Pittsburgh's economy. But as the bubble continues to crash in other areas the prices in Pittsburgh are going to become less desirable (Assuming of course Pittsburgh sees only a modest downturn in real estate).
Quote:
prices only moderated slightly, and remained WAY higher than prices in Pittsburgh.
Just to note this is the behavior you see in most areas. Currently we are moving through the subprime resets, but soon (in 2009) we are going to be working through the prime resets. In particular prime option-ARM. Also, the low ends of the market tend to crash first in general (Look at the crash in early 90s). Anyhow, look at the reset schedule:
If you can't find takers then the salary is two low, that is simple supply and demand. There are plenty of people in the area that can do the job, but at $35k a year? I got paid about that for PART-TIME work in the Pittsburgh area!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
