Cheap properties get death sentences (Pittsburgh, Mount Lebanon: sales, 2014, mortgages)

[Moby Hick]

Originally Posted by doo dah

Well, doesn't that sort of verge on aesthetics though?

Kind of, but I don't think it does so much more than the current system. Or at least, it wouldn't be much more subjective than the current system.

[doo dah]

Originally Posted by Moby Hick

Kind of, but I don't think it does so much more than the current system. Or at least, it wouldn't be much more subjective than the current system.

I can agree with that.

[SteelCityRising]

I really don't understand why it's so difficult to secure financing for a sub-$50k home. My credit score is in the mid-600s---not perfect, of course, but it's steadily improving. I don't expect to find a palace for $50,000. I expect to find a move-in ready 2-BR/1-BA home around 1,100 square feet or so with limited property, no off-street parking, and needing a metric ton of cosmetic TLC (while the mechanicals/roof/foundation are at least "okay").

Even if there's LIMITED profit for a bank on a sub-$50k mortgage, there's still PROFIT to be had. Some of us could EASILY afford more than $50k but would rather buy cheap and lovingly restore a home over the years with the money saved to help give back to the community. I just read another class warfare article on CNN yesterday about how those seeking "jumbo mortgages" (mega-$$$) now, in many cases, only have to put 10% down and are finding easier approval, even with questionable credit. If a mortgagor will take a chance on a BIG gamble like that, then why not on a little gamble? It seems like we're poising ourselves for another housing crisis in this country.

[ferraris]

Have you firsthand had difficulties SCR? While credit score and condition of the house were obstacles for me while mortgage shopping, the purchase price never was. I used Dollar Bank.

[PreservationPioneer]

I also used Dollar Bank. My house was $45k, and I had no difficulty obtaining a mortgage. However, I have good credit. One issue is closing costs - they are not cheap. And you will need a down payment in addition to that.

[PreservationPioneer]

Originally Posted by ferraris

With as big of a price differential as Wilkinsburg has?

Oh, absolutely not. But that's what makes them so attractive compared to Wilkinsburg (that, and lower taxes).

What is the nice neighborhood(s) in Duquesne? I've always thought it was kind of a neat looking area, but have heard literally nothing positive about it ever.

There are a few. If you drive around and explore these areas, as I do, you'll find them. The area around Commonwealth and Richford Ave. seems nice. And you can buy houses, even in the nice neighborhoods, dirt cheap. That's because people make assumptions based on what town the house is in, rather than what neighborhood within that town it's in. That makes all the difference, especially in places like Duquesne and McKeesport, which are cities in their own right. It's like assuming all of Pittsburgh looks like Beltzhoover.

[Geeo]

I agree. I've driven around and have seen very nice areas and houses in Homestead, Clairton, Munhall, and McKeesport (around the library - not sure what the area is called). These seemed like stable neighborhoods with substantial and well-kept homes, people on front porches and kids playing in the streets. Some had brick streets and a great tree canopy, which I love.

[Goodjules]

Even when it's possible to get a mortgage on a property that's selling for under $50k, it's often the cost of the renovations needed vs. the potential added value that is the problem. A hypothetical $25k house that needs $40k worth of renovations and will only be worth $40k once renovated is often the issue with many deteriorating homes in sketchy neighborhoods.

I agree that there are nice streets/areas in many places that have bad reputations such as McKeesport, McKees Rocks, Sheraden, Munhall… Buying a place in good shape on a nice street in an otherwise "bad" neighborhood is another story. In those cases major renovations aren't needed. The risk there for the buyer is that the area will continue to decline and the house will lose value.

I've often thought that if you could form a small group of investors willing to each buy and renovate a house in a very small area, say within a few blocks of each other, or better yet, on the same block; you could make a real impact. How to form the group and the risk involved seems to be the limiting factor. I'd be interested to hear from the real estate pros on the challenges of such a plan.

[FreightTrainRunning]

It's even an issue with more expensive houses. If we'd financed the renovations/restorations to our house and garage, we'd be seriously underwater right now. We bought for $200K and have put somewhere around $150K into it and probably couldn't get $350K out if it right now. Fortunately, we've paid out of savings for all the work and plan on living here for at least another decade and finishing the project. By that time, we should be able to get our investment back (and hopefully more) given the way that prices have been going around here but if we had to sell right now, we'd take a bath.

[mckeesport_alum]

Originally Posted by Geeo

...and McKeesport (around the library - not sure what the area is called). These seemed like stable neighborhoods with substantial and well-kept homes, people on front porches and kids playing in the streets. Some had brick streets and a great tree canopy, which I love.

The Library-Manor District :-)