Do you think we're seeing a housing bubble? (Pittsburgh, Etna: for sale, 2015)

[gladhands]

We've been thinking about moving out of our current house, and I've been doing a little online window shopping. To get even a slight upgrade, in the same neighborhood, we'd need to pay 200k more than our 2012 purchase price. It seems as if every walkable East End neighborhood as well as the lower North Side is 50-80% more expensive than it was just a few years ago. Do you think this is normal appreciation or the beginning (midst?) of a housing bubble. I'd hate to buy a new house, and watch the value drop by 100k in a year or two.

[tyovan4]

Originally Posted by gladhands

It seems as if every walkable East End neighborhood as well as the lower North Side is 50-80% more expensive than it was just a few years ago. Do you think this is normal appreciation or the beginning (midst?) of a housing bubble. I'd hate to buy a new house, and watch the value drop by 100k in a year or two.

Same thing is happening in the suburbs, even in a place as untrendy as Etna.
I bought a few years ago for $45,000. Zillow estimates its now worth $80,000. From what I've seen for houses for sale in Etna, I'd have to agree with that estimate.

That being said - regarding whether we're in a midst of a bubble, if we're seeing normal appreciation, or if perhaps our long-lagging market is finally beginning to catch up to normal levels - I think all of that can only be answered by Jeff Bezos.

If Amazon comes, expect prices to continue to climb and climb. If Amazon doesn't come, I'd anticipate prices to drop, or stabilize.

[Paul2421]

Originally Posted by gladhands

We've been thinking about moving out of our current house, and I've been doing a little online window shopping. To get even a slight upgrade, in the same neighborhood, we'd need to pay 200k more than our 2012 purchase price. It seems as if every walkable East End neighborhood as well as the lower North Side is 50-80% more expensive than it was just a few years ago. Do you think this is normal appreciation or the beginning (midst?) of a housing bubble. I'd hate to buy a new house, and watch the value drop by 100k in a year or two.

i think you could lose if you buy a flip in an area that hasn't come back all the way yet in terms of houses being restored (parts of east liberty, garfield, upper l'ville). buying one of those is based on the area improving, i think. shadyside and mws have too much going for them to ever decrease that much in desirability, but the prices are definitely expensive or the normal person. but you have to figure there are probably people in your situation as well and supply is never going to go up considerably. what are the upgrades you are looking for? those may not have appreciated that much. overall, if you are worried about a 100k drop in a year or two, i would probably be wary about buying something else.

[robrobrob]

I don't think we are in midst of a bubble cause I don't think prices are going down anytime soon.



My wife and i have noticed this in the burbs too. To get a slightly bigger house we need to spend about 150,000 more. That is a lot of to gain 400 square feet. To get about a 1000 more square feet we need to spend at least 250,000 more. So, even with a massive down payment due to the appreciation our mortgage would go up significantly. In the burbs, you also get whacked with a huge jump in taxes.

[Paul2421]

Originally Posted by gladhands

We've been thinking about moving out of our current house, and I've been doing a little online window shopping. To get even a slight upgrade, in the same neighborhood, we'd need to pay 200k more than our 2012 purchase price. It seems as if every walkable East End neighborhood as well as the lower North Side is 50-80% more expensive than it was just a few years ago. Do you think this is normal appreciation or the beginning (midst?) of a housing bubble. I'd hate to buy a new house, and watch the value drop by 100k in a year or two.

i think it hurts too that you are comparing to the bottom of the market pretty much in 2011. pittsburgh didn't fall very much but that is because prices didn't run up before the crash.

[gladhands]

Originally Posted by Paul2421

i think it hurts too that you are comparing to the bottom of the market pretty much in 2011. pittsburgh didn't fall very much but that is because prices didn't run up before the crash.

The Pittsburgh housing prices were fairly similar (outside of Lawrenceville) as recently as 2015.

[pittsburghaccuweather]

Originally Posted by gladhands

We've been thinking about moving out of our current house, and I've been doing a little online window shopping. To get even a slight upgrade, in the same neighborhood, we'd need to pay 200k more than our 2012 purchase price. It seems as if every walkable East End neighborhood as well as the lower North Side is 50-80% more expensive than it was just a few years ago. Do you think this is normal appreciation or the beginning (midst?) of a housing bubble. I'd hate to buy a new house, and watch the value drop by 100k in a year or two.

No we aren’t.

The prices are inflated in the good areas because of two reasons.

1. Pittsburgh housing stock is very old. Finding something updated is few and far in between and costs more as a result.

2. There is a lack of new housing construction in the city and metro as a whole further inflating desirable areas and decent existing homes there.

What would relieve these prices is a lot of new construction in desirable areas or fixing up rundown housing in borderline neighborhoods to help rejuvenate them.

We probably won’t see new construction anytime soon. I actually think amazon would bring home prices down. They would have no choice but to bulldoze and build new homes. There just isn’t enough to support amazon now in livable condition. Lots of old rundown homes everywhere. They would have to start fresh and new.

[svband76]

The lack of new construction is a good thing. Nothing more undesirable than cheap new boring overpriced housing.

[RonSantoRules]

Lack of supply is an issue -- both with new units coming on line and with people no longer "trading up" for bigger houses, which seems to happen a lot less frequently now after the 2008 crash.

[Knepper3]

Agree, it's not so much a bubble but lack of supply. The past year inventory of homes for sale has been extremely low so homes that have sold are driving up prices. Lack of inventory is a little curious, wondering if some people are holding to see if the Amazon hype moves things up more or something. Even so people here do not seem to move away and there is not a huge amount of speculation buying either so I dont expect a large number of homes to suddenly come on the market which would bring down prices. I think people are reluctant to sell for the very reason you bring up, they are not looking to move out of the area so where would they move given the high cost of another home. Personally we've been thinking for a few years of moving now that our kids are out of school but there isn't something bigger/more property with a modest increase in price so we are just sitting and looking at improving our existing. Only way for prices to drop significantly is to see a big increase in inventory.