Pittsburgh Housing: Cheaper to Own than Rent (Warren: sales, house)

[BrianTH]

Originally Posted by user_id

Yes on the national level its a "large share", but areas like Pittsburgh have a lesser share.

Oh, what is Pittsburgh's share? I couldn't find local-level data.

Not only am I talking about Pittsburgh, and not the Pittsburgh MSA

Since we have exclusively been looking at MSA data before now, you might want to have mentioned that before.

A general problem with looking only at central cities is that they are defined arbitrarily, and there isn't much data presented on just central cities. Which makes sense--an MSA is basically defined as a common commuting zone, and typically home buyers won't exclusively look at just the central city for buying opportunities. That is particularly true in Pittsburgh, where the central city is relatively small.

So frankly, I have no idea why you would insist on looking at just the City of Pittsburgh, since there isn't much relevant data presented that way, and meanwhile people considering buying a home here would only rarely insist on only looking in the City.

[BrianTH]

By the way, although I haven't found direct reporting on the percentage of housing units with conforming loans, I did find such data for the percentage with subprime loans. Pittsburgh is relatively low by that measure (see Figures 2-4 here, PDF):

http://www.federalreserve.gov/pubs/f.../200829pap.pdf

The other major category of non-conforming loans is jumbo loans, which exceed the amount limits of conforming loans. I'd be surprised if the percentage of jumbo loans was relatively high, or even average, here.

So I am quite surprised to learn the percentage of conforming loans is low here, and I'll be very interested to see that data.

[user_id]

Originally Posted by BrianTH

Since we have exclusively been looking at MSA data before now, you might want to have mentioned that before.

What you mean to say is that you revert to the MSA whenever it suits your needs..... I on the other hand have been talking about Pittsburgh the entire time. I mean, do you suggest I use a different word other than "Pittsburgh" to refer to Pittsburgh?

Also the Pittsburgh MSA is huge, it includes 6 counties, and its mostly small towns and rural communities. As a result its not surprising that what goes on in the MSA as a whole is much different than what goes on in Pittsburgh.

Originally Posted by BrianTH

Which makes sense--an MSA is basically defined as a common commuting zone, and typically home buyers won't exclusively look at just the central city for buying opportunities.

This would make sense if the Pittsburgh MSA was actually a "common commuting zone", but its no such thing. Someone looking for a home in Pittsburgh isn't going to end up buying one in Armstrong county. There are only a handful of communities, partly due to the geography of the area, that are easily commutable in and out of Pittsburgh. So the actual "common commuting zone" is significantly smaller than the MSA, I'd suggest its around 500k~600k in size...1/4 the size of the official MSA. Regardless, the MSA isn't intended to define a "common commuting zone"....

Originally Posted by BrianTH

So frankly, I have no idea why you would insist on looking at just the City of Pittsburgh, since there isn't much relevant data presented that way, and meanwhile people considering buying a home here would only rarely insist on only looking in the City.

Then, frankly, you aren't thinking very hard. Pittsburgh is a city on the other hand the areas outside of Pittsburgh are small towns, rural communities and suburban areas. Pittsburgh represents only around 13% of the MSA so there is no reason to believe that the data for the MSA tells you anything about Pittsburgh. The fact that you can't find much city level data (which is primarily due to Pittsburgh's small size) is immaterial...

Like so much you say here, your comment about home buyers is just more sophistry. Though there are some areas of Pittsburgh (e.g., east end) where there is no clear dividing line between "the city" and connecting communities...people that are interested in the city are largely going to focus on homes within the city and possibly a handful of connecting communities. They are no sense going to be looking at the MSA as a whole. Furthermore, I don't think people wanting a city lifestyle are at all rare...and these people are going to look almost exclusively in the city.

[user_id]

Originally Posted by BrianTH

The other major category of non-conforming loans is jumbo loans, which exceed the amount limits of conforming loans. I'd be surprised if the percentage of jumbo loans was relatively high, or even average, here.

Its hard to take you seriously when you focus on Subprime and Jumbo and ignore the two largest categories of non-conforming loans, namely, FHA and VA loans. THE FHFA index is only looking at homes that have had more than one mortgage sourced from Fannie or Freddie.

Anyhow, fine, you can convince yourself of whatever you want...I'll focus on reality.

[BrianTH]

Originally Posted by user_id

What you mean to say is that you revert to the MSA whenever it suits your needs.

I've always been talking about the MSA. I've been citing MSA data for days now. Before you announced it, I never suspected you were talking about the City instead of the MSA, because as I noted, that makes no practical sense to me.

I mean, do you suggest I use a different word other than "Pittsburgh" to refer to Pittsburgh?

The City of Pittsburgh or the City are common ways around here to note when you are talking specifically about . . . the City of Pittsburgh.

This would make sense if the Pittsburgh MSA was actually a "common commuting zone", but its no such thing.

Metropolitan and Micropolitan Statistical Areas - U.S. Census Bureau

Each metro or micro area consists of one or more counties and includes the counties containing the core urban area, as well as any adjacent counties that have a high degree of social and economic integration (as measured by commuting to work) with the urban core.

If you don't like the way the Pittsburgh MSA is defined, you will need to take your complaint to the OMB.

They are no sense going to be looking at the MSA as a whole.

This forum has always sought to provide helpful information to people interested in any part of the Pittsburgh region, not just the City. I really don't see any reason to stop doing that, particularly since as you note, the City only includes a small minority of the population in the region. Of course if a particular person is particularly interested in the City, or any other particular area, we will try to help them get such information.

[BrianTH]

Originally Posted by user_id

Its hard to take you seriously when you focus on Subprime and Jumbo and ignore the two largest categories of non-conforming loans, namely, FHA and VA loans.

Well, no need to guess anymore. You said above you knew that Pittsburgh had a lower than average share of conforming loans, so what is Pittsburgh's share?

[user_id]

Originally Posted by BrianTH

Before you announced it, I never suspected you were talking about the City instead of the MSA, because as I noted, that makes no practical sense to me.

You never suspected that someone talking about "Pittsburgh" was talking about Pittsburgh? Umm.....okay.

Originally Posted by BrianTH

If you don't like the way the Pittsburgh MSA is defined, you will need to take your complaint to the OMB.

Umm....seriously? The issue here isn't how the OMB has defined the geographic limits of the Pittsburgh MSA, instead the issue is your erroneous interpretation of what the MSA represents. It is simply not intended to represent a "common commuting area", its intended to represent a loosely defined economic unit.

Talking about the MSA when people are talking about Pittsburgh isn't helpful, its obfuscatory.

[BrianTH]

Originally Posted by user_id

You never suspected that someone talking about "Pittsburgh" was talking about Pittsburgh? Umm.....okay.

Did I think you were only talking about the City of Pittsburgh when we had been specifically discussing Pittsburgh MSA statistics for days without any objection from you? No.

But in any event, what is done is done. All my comments above were about the Pittsburgh MSA, and I will continue to follow that practice.

It is simply not intended to represent a "common commuting area", its intended to represent a loosely defined economic unit.

This is a repeat, but I bolded something for you this time:

Each metro or micro area consists of one or more counties and includes the counties containing the core urban area, as well as any adjacent counties that have a high degree of social and economic integration (as measured by commuting to work) with the urban core.

Feel free to replace my phrase "common commuting zone" with "adjacent counties that have a high degree of social and economic integration (as measured by commuting to work)" if you so please.

Of course the practical point is people come here looking at buying or renting in areas all over the Metro, not just in the City. So I see no point to restricting this discussion to just the City, and I am not going to do so.

[user_id]

Originally Posted by BrianTH

Feel free to replace my phrase "common commuting zone" with "adjacent counties that have a high degree of social and economic integration (as measured by commuting to work)" if you so please.

Great, but this shift decimates the point you were trying to make. Namely, that when someone is looking for a home in Pittsburgh (the city) they aren't going to widen their attention to to the entire MSA, instead they will look largely at the city and possibly at some of the connecting communities.

Originally Posted by BrianTH

Of course the practical point is people come here looking at buying or renting in areas all over the Metro, not just in the City. So I see no point to restricting this discussion to just the City, and I am not going to do so.

There is nothing practical about this, its just more obfuscation. Where is "here"? Is it the MSA? Then yes, your comment is true by definition, but if "here" is Pittsburgh then its false. People looking for homes in Pittsburgh aren't going to widen their search to the entire MSA, instead just the city and connecting communities.

So, while I acknowledge that people looking for homes in Pittsburgh aren't going to restrict themselves to the official city limits, the idea that the relevant borders are the MSA is just crazy. Once you get out of the immediately surrounding areas commuting in and out of Pittsburgh becomes rather difficult. Pittsburgh, unlike larger metro areas, doesn't have an extensive system of highways connecting its urban core with surrounding areas.

[greg42]

The MSA is 2 million or so approx population. (I didn't look it up; I know it's at least 2 mil, think it might be 2.2 or 2.3.) If the city plus "immediate surrounding areas" that would have common commuting with the city don't contain around 75% or so (give or take a few) of that population I would be quite surprised. There are no large enough population centers within the MSA but outside of a common commuting zone with Pittsburgh for the spread to be the other way around. Allegheny County alone is 1.2-ish (quick search). And parts of bordering Washington, Beaver, Butler and Westmoreland all account for some of the heaviest population of those counties and people commuting into the more central area.

Restricting the discussion to the city makes no sense. That never even crossed my mind. It certainly never crossed the mind of the people who started this thread a couple years ago. If you think that restriction makes your points applicable, fine, but it doesn't make sense in terms of what buyers are going to do or what was being discussed here.

At any rate, the sparsely populated areas of the MSA where people wouldn't be looking to buy are going to drag any stats down, not pump them up in a way that distorts what is happening. Fayette County is in the MSA. You think that's going to distort the stats positively? Heh.