Why is Pittsburgh so cheap? (California: middle-class, rental, mortgage broker)

[user_id]

Originally Posted by pittsteelerfan

It is a problem in Pittsburgh, cause you don't draw outside realestate investers. Whether it's private or commericial. People want to see a profit on their investments. And people who stick their neck out, they want more than a 3 to 5 % return on it!

Not surprisingly, you got this wrong too. Pittsburgh's problem is not that it lacks speculative real estate investors. This is not the only way to make money in real estate, in fact its really just glorified gambling. Prudent real estate investors on the other hand will look for buildings, land etc that they can improve and rent out and/or sell once they improve. They are doing actual work, namely improving and or building something. Lets say investor X buys some old buildings in Pittsburgh for $500k and spends an additional $500k fixing them. Total investment of 1 million. Lets say they can rent these out for $160k and have costs of around $60k a year (property taxes, vacancy rate etc). The investor's return is 10% a year, but over time the return should grow as inflation increases rents. Even if the property does not appreciate the investor still makes money.

The potentially for profit in Pittsburgh is actually rather high, contrary to what you believe, because property can be purchased so cheap. Pittsburgh real problem is that there are not enough businesses that want to rent out the space in the first place. Do you think that some big wig investor building a building magically creates depend for that building? If an investor is only building something because they think they can flip it in 2 years for a profit to an even stupider investor that is a recipe for a disaster. Of course, this is exactly what happened in a number of "international cities" and precisely why the economy is collapsing.

[pittsteelerfan]

Originally Posted by user_id

Not surprisingly, you got this wrong too. Pittsburgh's problem is not that it lacks speculative real estate investors. This is not the only way to make money in real estate, in fact its really just glorified gambling. Prudent real estate investors on the other hand will look for buildings, land etc that they can improve and rent out and/or sell once they improve. They are doing actual work, namely improving and or building something. Lets say investor X buys some old buildings in Pittsburgh for $500k and spends an additional $500k fixing them. Total investment of 1 million. Lets say they can rent these out for $160k and have costs of around $60k a year (property taxes, vacancy rate etc). The investor's return is 10% a year, but over time the return should grow as inflation increases rents. Even if the property does not appreciate the investor still makes money.

The potentially for profit in Pittsburgh is actually rather high, contrary to what you believe, because property can be purchased so cheap. Pittsburgh real problem is that there are not enough businesses that want to rent out the space in the first place. Do you think that some big wig investor building a building magically creates depend for that building? If an investor is only building something because they think they can flip it in 2 years for a profit to an even stupider investor that is a recipe for a disaster. Of course, this is exactly what happened in a number of "international cities" and precisely why the economy is collapsing.

Ya, "potential" and "reality", I guess too you, mean the same thing?....... Keep on living that Pittsburgh "dream". Before you know it, Trump and crowd with be in the Burgh ............

[creepsinc]

All I know is that the majority of the people that used to come around here and crow about how great the economy was in their states (AZ,CA, SC, NC, ETC) are strangely quiet these days about Pittsburgh's 7.5% unemployment rate and still-steady housing market. A week doesn't go by that a respected business journal doesn't proclaim Pittsburgh a rare bright spot in these troubled times. And yet, the deniers continue to deny.

[pittsteelerfan]

Originally Posted by creepsinc

All I know is that the majority of the people that used to come around here and crow about how great the economy was in their states (AZ,CA, SC, NC, ETC) are strangely quiet these days about Pittsburgh's 7.5% unemployment rate and still-steady housing market. A week doesn't go by that a respected business journal doesn't proclaim Pittsburgh a rare bright spot in these troubled times. And yet, the deniers continue to deny.

AZ, SC, NC? You couldn't pay me to live in one those states. CA, of course I'd live there. I rather be broke in another city, than to live in Pittsburgh. That's just me though, not saying everyone. Unlike most those states you just listed, I like real cities, not sunbelt sprawl.

[creepsinc]

Of course, Pittsburgh's not for everybody. Notice how I don't make idiotic blanket statements.

It's funny how so many people that moved away and appear to have no use for Pittsburgh at all can't seem to leave it alone on the forums.

I feel the same way about Richmond, VA, but you don't see me over there in their forums obsessing over how much I dislike my hometown.

[user_id]

Originally Posted by pittsteelerfan

Ya, "potential" and "reality", I guess too you, mean the same thing?....... Keep on living that Pittsburgh "dream". Before you know it, Trump and crowd with be in the Burgh ............

Anything in the investment world is "potential", even if you're prudent things may not work out. Trump as an investor is a failure, so lets hope he sticks to making infomercials and TV shows. I mean, have you ever wondered why an successful real estate investor would need to make infomercials and TV shows?

But you are missing the point. The reason why real estate investors are not jumping on Pittsburgh real estate is because the economy is not growing fast in the region, it has nothing to do with appreciation. Real estate as a whole should appreciation with inflation whenever it does not its unstable. But also Pittsburgh does attract some investors, over the last decade there have been a number of new developments even to the point of being over developed a bit in relation to the economic growth.

[creepsinc]

Originally Posted by user_id

Anything in the investment world is "potential", even if you're prudent things may not work out. Trump as an investor is a failure, so lets hope he sticks to making infomercials and TV shows. I mean, have you ever wondered why an successful real estate investor would need to make infomercials and TV shows?

But you are missing the point. The reason why real estate investors are not jumping on Pittsburgh real estate is because the economy is not growing fast in the region, it has nothing to do with appreciation. Real estate as a whole should appreciation with inflation whenever it does not its unstable. But also Pittsburgh does attract some investors, over the last decade there have been a number of new developments even to the point of being over developed a bit in relation to the economic growth.

Moody's recently rated Pittsburgh #1 in the nation for business real estate markets, but I'm sure the deniers will deny that too. Tell them the sky is blue over Pittsburgh even part of the year and they'll deny that. I've seen threads about it.

[pittsteelerfan]

Originally Posted by creepsinc

Of course, Pittsburgh's not for everybody. Notice how I don't make idiotic blanket statements.

It's funny how so many people that moved away and appear to have no use for Pittsburgh at all can't seem to leave it alone on the forums.

I feel the same way about Richmond, VA, but you don't see me over there in their forums obsessing over how much I dislike my hometown.

I guess that "ignore" list didn't last too long?..........

Pointing out Pittsburgh's faults doesn't mean I dislike it. And just cause I could never live there again, doesn't mean I hate it either. See, I don't prescribe to 'false' pride like you and many others do. All someone has to do is travel, and travel alot and they can see what me or others are talking about. I could never live in Pittsburgh again cause of the lack of diversity to begin with. The lists goes on from there........

Pittsburgh is "cheap" for a reason..............

[pittsteelerfan]

Originally Posted by creepsinc

Moody's recently rated Pittsburgh #1 in the nation for business real estate markets, but I'm sure the deniers will deny that too. Tell them the sky is blue over Pittsburgh even part of the year and they'll deny that. I've seen threads about it.

Did "Moody's" say that Pittsburgh realestate was #1 a few years ago?... I'm sure the "deniers would say they did.......

[pittsteelerfan]

Originally Posted by user_id

Anything in the investment world is "potential", even if you're prudent things may not work out. Trump as an investor is a failure, so lets hope he sticks to making infomercials and TV shows. I mean, have you ever wondered why an successful real estate investor would need to make infomercials and TV shows?

But you are missing the point. The reason why real estate investors are not jumping on Pittsburgh real estate is because the economy is not growing fast in the region, it has nothing to do with appreciation. Real estate as a whole should appreciation with inflation whenever it does not its unstable. But also Pittsburgh does attract some investors, over the last decade there have been a number of new developments even to the point of being over developed a bit in relation to the economic growth.

Well all that "potential", earned a lot of people, a lot money, for a decade!...

And what did Pittsburgh see? More people moved out (as usual)!