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I have to say that while prices have gone up, so have the costs of materials to improve these properties. Also the supply has gone down while the demand (new people moving to Pgh such as hipster priest and scr) has also increased. As neighborhoods look less run down and more businesses move in, the demand increases. The supply more or less stays the same and then later goes down as people are less likely to leave the area. All of this plus record low interest rates, causing a slightly artificial price because people are buying based on payment rather than the cost of the house, will make prices increase. Money is cheap right now, which means that it is worth less than it was 4-5 years ago.
I'd like to stop selling ourselves short and start realizing that we were a much better city 100 year ago than Toledo, Indianapolis, Cleveland, Buffalo, St. Louis, Baltimore, and Kansas City and we are recovering much better than those cities are.
Hipster priest wanted to buy a house with cash, which limits how much he could spend. Had he added an extra $50,000 to his price via a mortgage, he'd be paying $230 per month more with a third of that going towards principal. He may not have had to settle for a neighborhood or house that he didn't want had he done that. On the other hand, if you buy with cash, your transaction costs are lower and you might be able to spruce the joint up and resell it or rent it out in a little while and buy something in a place that that you like more. You can leverage against it once you get it rented. Since you paid cash, you aren't as "stuck" as somebody who "settled" and bought with financing.
SCR on the other hand has been looking for a house for 2 years without a buyer's agent or a pre-approval. He expects to have a mortgage payment for less than a used car payment.
I actually agree with you. Pittsburgh is a good place, but there are other affordable cities with similar amenities and character. I knew that when I moved here, but I was lucky enough to find employment and a very affordable apartment, and then an extremely affordable old house. So my goals have been met here. Personally, I think Pittsburgh has more to offer than Toledo (although I love Toledo and am rooting for it to make a comeback), Louisville, Lexington, Indianapolis, and Cleveland. I think Buffalo, St. Louis, Baltimore, and Kansas City compare rather well to Pittsburgh (as mid-size cities go), but some would disagree. Erie is a nice alternative in a smaller city, but lacks the employment opportunities in Pittsburgh. Oklahoma has some urban, affordable cities, like Tulsa. Milwaukee is another star of the rust belt that compares favorably to Pittsburgh. I've heard Omaha offers a lot, but I've never been there. Detroit packs a punch if you can deal with the elevated crime statistics within the core.
Personally, the only big cities I would consider living in besides Pittsburgh are Buffalo, St. Louis, Baltimore, Philadelphia, and New York. However, New York and Philly are too expensive, Baltimore and St. Louis are a little iffy, and Buffalo is really like trading apples for oranges (in my opinion). To me, the exciting cities are the smaller, but still urban, cities in eastern PA and Upstate NY, where you can buy downtown, walk to everything, and not constantly see the evidence of 1960s urban renewal.
You were very lucky. Finding a livable brick row home in a safe, walkable neighborhood with a healthy business district is no easy task. Actually, these days, it is nearly impossible. My agent mentioned to me that there's a shortage of homes for sale in Pittsburgh, and after house shopping, I believe it. There was very little livable under $60,000 and absolutely nothing livable less than $20,000--and forget about brick or in a decent, walkable community.
I agree that Pittsburgh has a lot to offer, and I do love this beautiful, historic city, but I also feel a little frustrated--a little dejected, even--that I didn't find a home I really like. After all, when not at work, especially in the winter months, a person does spent a good deal of their time at home. So if you don't like your place, that's definitely not a good thing!
I probably shouldn't be--I know this is unfair--but because of my experience with house shopping, my disappointment, having to buy in Brighton Heights, not finding the kind of home I want, I'm kind of down on Pittsburgh right now.
I've never been to any of the cities in eastern PA you mentioned, save Philadelphia. Do those smaller cities have decent economies? Is there a lot of Victorian architecture to be found there? Are they walkable, and do they have public transport?
Also, what do you think of Cincinnati? I've never been there, but I've heard their architecture is very similar to Pittsburgh's. I myself would rather live in a larger city. I just think larger cities have amenities that smaller cities can't possibly have. That being said, I imagine many smaller or medium-sized cities are very livable, too. Anything is better than the country or the suburbs!
I have to say that while prices have gone up, so have the costs of materials to improve these properties. Also the supply has gone down while the demand (new people moving to Pgh such as hipster priest and scr) has also increased. As neighborhoods look less run down and more businesses move in, the demand increases. The supply more or less stays the same and then later goes down as people are less likely to leave the area. All of this plus record low interest rates, causing a slightly artificial price because people are buying based on payment rather than the cost of the house, will make prices increase. Money is cheap right now, which means that it is worth less than it was 4-5 years ago.
I'd like to stop selling ourselves short and start realizing that we were a much better city 100 year ago than Toledo, Indianapolis, Cleveland, Buffalo, St. Louis, Baltimore, and Kansas City and we are recovering much better than those cities are.
Hipster priest wanted to buy a house with cash, which limits how much he could spend. Had he added an extra $50,000 to his price via a mortgage, he'd be paying $230 per month more with a third of that going towards principal. He may not have had to settle for a neighborhood or house that he didn't want had he done that. On the other hand, if you buy with cash, your transaction costs are lower and you might be able to spruce the joint up and resell it or rent it out in a little while and buy something in a place that that you like more. You can leverage against it once you get it rented. Since you paid cash, you aren't as "stuck" as somebody who "settled" and bought with financing.
SCR on the other hand has been looking for a house for 2 years without a buyer's agent or a pre-approval. He expects to have a mortgage payment for less than a used car payment.
I'm not Hipster Priest, I'm Hip Priest. Good God, I'm not a hipster!
You're right, the supply has gone down--way down. As I've mentioned, my buyer's agent told me several times that there's a shortage of homes for sale in Pittsburgh. There were (and still are, as I still look) very few homes for sale in my price range. I guess the days of cheap housing are all but over.
I saved for many years for a house. You have no idea of all the sacrifices I made; I went without a lot of things I wanted just so I could someday have a home of my own. That's why I'm so disappointed, so frustrated; that's why I'm rather down on Pittsburgh at the moment (which, I know, is unfair--hopefully, my attitude will soon change!) All of my life, I've paid cash for my purchases; I don't like debt. That's why I had to pay cash for a home. The risk of debt troubles me. I guess I'm old-fashioned, in that I believe if you don't have the money for something, then you don't buy it.
I'll make the necessary repairs on my house, live in it for 6 months or a year, than then, hopefully, sell it if I can find something historic and urban--something, perhaps, in one of the historic lower North Side neighborhoods. (I've given up on the East End, as I'm not made of money.)
I'm not Hipster Priest, I'm Hip Priest. Good God, I'm not a hipster!
You're right, the supply has gone down--way down. As I've mentioned, my buyer's agent told me several times that there's a shortage of homes for sale in Pittsburgh. There were (and still are, as I still look) very few homes for sale in my price range. I guess the days of cheap housing are all but over.
If you want a home for a price that substantially less than it would cost to rebuild, you have to live in a depressed area.
Pittsburgh just has fewer depressed areas than it did in the not so distant past.
You had a laundry list that was unattainable and you got most of what was on it. Most people don't get everything they want. This is buyer's remorse and is almost ubiquitous. You may have spwnt "all your life" denying yourself in order to buy a house, but you've got a long life ahead of you yet. You'll feel better in a few weeks or months.
I'll make the necessary repairs on my house, live in it for 6 months or a year, than then, hopefully, sell it if I can find something historic and urban--something, perhaps, in one of the historic lower North Side neighborhoods. (I've given up on the East End, as I'm not made of money.)
It's good in a way you picked Brighton Heights then. It's had the most solid real-estate appreciation of the outer North Side, and you should be able to get back the money you put into the house upon sale, if nothing else. That will position you better to buy the next house following this one. You'll almost certainly be unable to buy into the currently trendy/unaffordable neighborhoods by then (unless they level off and Brighton Heights takes off, which seems unlikely), but you'll be able to figure out your "ghetto comfort level" and be able to decide which "transitional" neighborhood with historic housing you feel the most comfortable with.
I'd like to stop selling ourselves short and start realizing that we were a much better city 100 year ago than Toledo, Indianapolis, Cleveland, Buffalo, St. Louis, Baltimore, and Kansas City and we are recovering much better than those cities are.
Hipster priest wanted to buy a house with cash, which limits how much he could spend. Had he added an extra $50,000 to his price via a mortgage, he'd be paying $230 per month more with a third of that going towards principal. He may not have had to settle for a neighborhood or house that he didn't want had he done that. On the other hand, if you buy with cash, your transaction costs are lower and you might be able to spruce the joint up and resell it or rent it out in a little while and buy something in a place that that you like more. You can leverage against it once you get it rented. Since you paid cash, you aren't as "stuck" as somebody who "settled" and bought with financing.
SCR on the other hand has been looking for a house for 2 years without a buyer's agent or a pre-approval. He expects to have a mortgage payment for less than a used car payment.
I agree. After great old houses and vibrant arts and entertainment options, I wanted to buy in a place that had a decent economy. I didn't research all the rust belt cities, but Pittsburgh stood out because its economy was and still is doing better than many of those other places. I began my search in 2006 and prices have certainly gone up since then, but are still incredibly affordable when compared to many non-rustbelt cities. Those lamenting the higher prices would do well to remember that their homes will more than likely see better appreciation than the same house in a city with a struggling economy. For those sitting on the fence waiting to buy, my advice would be to take the risk and buy. All indicators are pointing to continued steady non-bubble growth.
I understand those who don't want a mortgage, but taking out a small mortgage of $100k or less really isn't that risky, especially in an area with steady appreciation. You'd benefit by being able to buy the kind of home you want in a neighborhood that is very likely to see better than average appreciation. And, if you can afford to add a bit toward your principal every month, you can be mortgage free in no time at all. To me, that would be the best of both worlds.
SCR, when are you going to get pre-approved and start working with a buyer's agent? We all want you to finally get a house! Getting pre-approved will give you concrete information about what you can afford. You don't have to spend as much as you're approved for BTW, but it can help you budget.
Another thing that I think will eventually result from the growth Pittsburgh is experiencing is higher salaries. It will take time, but as housing prices rise and the population stabilizes and even grows a bit, there will be pressure on companies to offer competitive salaries to attract and retain the best people. I think it would be felt in the higher tier professional occupations first. But I don't see how a city can have growth over the long term while still offering significantly lower than average salaries. On the other hand I'm sure Pittsburgh salaries will never be as high as NYC, SF, Silicon Valley, etc. But bottom of the scale may become a thing of the past. Or am I just a starry-eyed optimist?
I'll make the necessary repairs on my house, live in it for 6 months or a year, than then, hopefully, sell it if I can find something historic and urban--something, perhaps, in one of the historic lower North Side neighborhoods.
Have you closed on the house yet? You're not going to see any great appreciation in 6 months to a year without some major renovations or repairs. At most you might get 10 or 15 percent in such a short time frame, and that's super optimistic. When you factor in your closing costs, sales costs, and taxes, would you even make any money? I know you hate renting, but this situation screams "rent first!" Renting isn't throwing away money, at least not anymore than it would be throwing away money to buy the Brighton Heights house and do a bunch of repairs while hoping to at least break-even. While I don't think Brighton Heights is a death sentence for you (It is accessible to transit is walkable to basic amenities), I also think that it sounds like it may be best for you to back out of the deal and rent first, even if it means forgoing your hand money (if that is still a possibility even). And all that goes double if you think a city other than Pittsburgh is a realistic possibility for you.
I like Eschaton's suggestion of finding your "ghetto comfort level." Someplace like Hazelwood, McKees Rocks, or Wilkinsburg might look terrible to you from Florida, but you might find them to be tamer than you had thought once you move up here.
I'm just so disappointed in myself; I was so foolish. I had the opportunity to buy the 843 Vista St. house, and I almost did, but alas, I let it slip through my fingers. That was an awesome house, with a beautiful view, within walking distance of everything, in a historic neighborhood of row houses (East Deutschtown). However, it's off the market now (as of 5/9, I think), listed on Howard Hannah's site as "sale pending." I keep kicking myself over this. That would have been a great house for me, and it was only $39,900.
Sure, it needed a bathroom, as the only bathroom was in the basement (isn't that what's called a "Pittsburgh Potty?"), but I certainly could have afforded to add one. It would have been well worth it, as it would have increased the value of the home. And I'm very bullish on the neighborhood, too.
As someone who won't be in the market for a house for at least, I don't know, 5-6 years, I hope prices will stay as affordable as they are now, should I choose to stay in Pittsburgh after college (and I have no clue whether that will happen). However, I must say, compared to the DC metro area where I've lived my whole life, you guys have it really good. I understand salaries are higher in the DC metro, but seriously, you can't even buy a townhouse around here for under 150K unless you want to be way out in a formerly rural area that's beginning to see the effects of sprawl and then commute anywhere from 30 minutes to 2 hours each way. 30k salary in Pittsburgh= ~90k house, which is very doable, albeit with compromises (you can still live in a safe neighborhood, though, close to the urban core). 45k salary in the DC area= ~140k condo, maybe a townhome in a far-flung or undesirable area. This is even worse as you get closer to DC, where people routinely spend over 500k on houses that would be half the price or less in Pittsburgh.
Just an outsider's perspective. I do hope prices don't bubble (and I really doubt they will; from my experiences, not all my peer group sees Pittsburgh as some kind of hip mecca yet, as it is often touted in media/online), but you have to expect some steady appreciation in such a livable city with such previously depressed housing prices.
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Good God, I'm not a hipster! 
I keep kicking myself over this. That would have been a great house for me, and it was only $39,900. 
