Pittsburgh per capita income in top 10 after adjustments (York, Rochester: sale, 2010)

[jimmyev]

What is fascinating about the cost-of-living in Pittsburgh as far as houses go is the extreme variance in pricing. You can buy a brand-new house in suburban Cranberry or Moon for $350,000, or an equally-sized, renovated older home in a cute, walkable town like New Brighton, Ellwood City, Crafton, Rochester or Carnegie for less than half that price.

[Katiana]

I seem to recall from my homebuying days that the rule of thumb was 3X your income in mortgage, excluding your down payment. That was the amt. the banks would lend. So if you have a large down payment, you can still buy quite a bit of house, especially f you are moving to Pgh from a high housing cost area and made a fair amount on your previous house. Of course, the whole deal has to make sense to you. A larger house costs more to run. I haven't heard any stories on this board about people moving to Pgh from Cali and having difficulty with house payments.

[Hopes]

Originally Posted by Katiana

I haven't heard any stories on this board about people moving to Pgh from Cali and having difficulty with house payments.

I have. They complain they can't afford to live here because the property taxes are higher than California. Meanwhile, they could have bought a less expensive house. I'm tired of the grumbling about Pennsylvania taxes. It's STILL cheaper to live in SW PA than most other parts of the country even with higher property taxes.

[Fiddlehead]

Good advice about overbuying! Yes the property taxes do seem very high in the burgh. I certainly will not be buying an estate. Living in a 3 br/2 ba 1500 sf house would seem like a mansion to me. And my plan is to absolutely lower, not raise my outflow, and to raise my income for the next few years. For the kid's college, our retirement,etc.

It is funny with the housing bubble and all. The last few years or so, folks have parachuted out of the West with hundreds of thousands in equity money (I just read a thread on the Durham site about folks crowing about how cheap their $400k estate was compared to the old digs in SF). Now many owe more than they paid. I bought in early 2003,but my house is worth about 15k more than I paid, which ironically just about how much I have put into it over the years. So, I am not even sure if I will have a down payment at this point. Another one of those examples of the confusing fate of the middle class. I do not like to think how much I have paid with a $1600 mortgage over almost 7 years to be sitting on a bout 5k. But, the funny thing is, it could have been much worse! Many have lost everything, while others are living large, all based on on the bubble. Total BS! As for us, the fundamentals are strong, so I am hopeful we will eventually get traction.

[Tinare]

Originally Posted by Hopes

I think people's frustrations comes from the fact that today's middle class isn't the middle class standard of living of the 1950s. Back then, the middle class didn't struggle simply to make ends meet and could afford a few luxuries.

True. But I also think too many people today have a very inflated idea of what is the basic "standard of living." In the 50s most middle-class families had one car. The house had one television. There was no cable bill, no internet, no cell phones, most homes did not have dishwashers, closets were small -- people had fewer clothes, there were no X-Boxes (or the like) that kids just "had to have" -- for that matter, kids generally had fewer toys.

I know overall that adjusted for inflation average wages are down, but we also have a much greater sense, in general, of what we "should" have. A friend of mine did a mission trip to the mountains of Kentucky. As she put it, the people were dirt poor, but they all had satellite dishes on their houses.

[LeftCoastee]

Originally Posted by Hopes

I have. They complain they can't afford to live here because the property taxes are higher than California. Meanwhile, they could have bought a less expensive house. I'm tired of the grumbling about Pennsylvania taxes. It's STILL cheaper to live in SW PA than most other parts of the country even with higher property taxes.

I believe you that people are complaining about it, but I can't see how their complaints are founded in reality. Property tax is only one of the many factors in the overall comparison. Property tax in CA is about 1% the value of the home. A $250,000 home in relatively nice part of Pittsburgh is very easily a $750,000 home in many CA cities. So if Pittsburgh property taxes are 3% vs. 1%, it ends up being a wash.

When I left LA in June, I was paying 9.3% income tax and 9.25% sales tax. The cost of goods, food, and gas were also higher than in PA. The phrase "you don't know what you got 'till its gone" never applied so much as when I was in CA looking back at PA.

If any Pittsburgh residents want to appreciate their town a bit more, leave for a few years.

[LeftCoastee]

Originally Posted by Tinare

True. But I also think too many people today have a very inflated idea of what is the basic "standard of living." In the 50s most middle-class families had one car. The house had one television. There was no cable bill, no internet, no cell phones, most homes did not have dishwashers, closets were small -- people had fewer clothes, there were no X-Boxes (or the like) that kids just "had to have" -- for that matter, kids generally had fewer toys.

I know overall that adjusted for inflation average wages are down, but we also have a much greater sense, in general, of what we "should" have. A friend of mine did a mission trip to the mountains of Kentucky. As she put it, the people were dirt poor, but they all had satellite dishes on their houses.

That is a very good point. Back in my parent's and grandparent's days, not everyone owned a home and it was perfectly acceptable. They simply couldn't afford it. Katiana made reference to a rule of thumb of "3x your income in mortgage". To me, that is absurd. I think this is one area where the "conservativeness" of Pittsburgh is a plus. Compare the foreclosure rates in Pittsburgh relative to most other major cities.

[Katiana]

Originally Posted by LeftCoastee

That is a very good point. Back in my parent's and grandparent's days, not everyone owned a home and it was perfectly acceptable. They simply couldn't afford it. Katiana made reference to a rule of thumb of "3x your income in mortgage". To me, that is absurd. I think this is one area where the "conservativeness" of Pittsburgh is a plus. Compare the foreclosure rates in Pittsburgh relative to most other major cities.

That is a banking rule, based on 20% down. Things have gotten much more lenient since we bought our last house in 1989. Also, if you make $50,000/yr, that is only $150K in mortgage. You can't get a lot, even in Pittsburgh, for that. That's about $180K total (roughly).

Maybe you could post some comparisons of Pittsburgh's foreclosure rates to most other major cities.

[hnsq]

Originally Posted by Katiana

That is a banking rule, based on 20% down. Things have gotten much more lenient since we bought our last house in 1980. Also, if you make $50,000/yr, that is only $150K in mortgage. You can't get a lot, even in Pittsburgh, for that. That's about $180K total (roughly).

Maybe you could post some comparisons of Pittsburgh's foreclosure rates to most other major cities.

I have to disagree with this. I am currently looking to buy in the $90-$100k range, and there are a lot of options. Bloomfield, Morningside, north Highland Park, Greenfield, there are more than your fair share of options. If I had a $180k budget I could buy a house anywhere in Pittsburgh (shadyside, fox chapel, ANYwhere) if I wanted...

[BrianTH]

Here is a writeup on foreclosure rates by metro area in the first half of 2009:

Sun Belt Dominates First Half 2009 Foreclosure Rankings but Unemployment-Related Foreclosures May Be Spreading

Pittsburgh was #134 out of 203 with a percent of housing units in foreclosure of 0.53. The U.S. average was 1.19%, and most of the cities ranked below Pittsburgh were smaller metro areas, but the lower metros did include New York and Baltimore (#147 and #148 at 0.47%). The top of the list is mostly Sun Belt cities with much, much higher rates (Las Vegas was #1 at 7.45%), although Detroit and Chicago made the top 40 (1.86% and 1.69% respectively). Cleveland was #56 at 1.36% whereas Philly was well below-average at #121/0.60%, which is a handy demonstration of how things are much worse over in Ohio.