Pittsburgh revealed as most affordable city to buy a home (Butler: loan, cheap home)

[jfds]

Originally Posted by doo dah

From the methodology:
"To find out, HSH.com took the National Association of Realtors’ fourth-quarter data for median-home prices and HSH.com’s fourth-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home -- the principal, interest, taxes and insurance -- in 27 metro areas."

First of all they assume the borrower is putting 20% down. If I recall correctly, the average borrower today does not put 20% down. Folks who qualify for FHA loans often put down as little as 3%. The borrower will have to pay PMI if they do not put 20% down. For FHA loans, the borrower must now pay PMI for the life of the loan.

Also, without seeing a detailed breakdown of their methodology, we have no way to determine if they took into consideration the all of the taxes that a borrower will pay to live in Pittsburgh or the surrounding areas. For example, few people outside of PA have ever heard of a "wage tax" and are often shocked to learn the city of Pittsburgh wage tax is 3% of your income.

In addition, property taxes in Allegheny County are some of the highest in the nation. Many homeowners in Allegheny County pay more in property taxes each month than principle and interest on their loans.

[frankievalley1]

Originally Posted by gg

To be honest, all this shows is the amount of poverty in our city limits. Lets face it, we have way more poverty than other cities like San Francisco. Heck, even NYC has way less poverty than just back in the 90's. Pittsburgh has not grown. Having this much poverty is such a drag on schools, infrastructure and more because there is no money. You can't tax the working people too much or they will flee to suburbs.

Hence the reason the city, county and local governments are cash strapped. How much can you take from people that don't make much to begin with? When wages are that low your services, schools and infrastructure suffer because the tax revenue is not there to pay for it.

[jfds]

Originally Posted by doo dah

Minimum wage at 40 hours/week is $15,080, just so you know.

You are correct. $32,000 is closer to a living wage in Pittsburgh and not "minimum wage."

[Goinback2011]

Originally Posted by frankievalley1

Hence the reason the city, county and local governments are cash strapped. How much can you take from people that don't make much to begin with? When wages are that low your services, schools and infrastructure suffer because the tax revenue is not there to pay for it.

zzzzzzzman.

[jfds]

Originally Posted by theta_sigma

I started my professional job at CMU, for which I was required to have a master's degree, at $24k. When I left last year, 9 years later, I had just cracked $30k. My husband made slightly more in the private sector, but neither of us got over $40k until this year. We've owned our home for 8 years.

You are combing both incomes. I'm assuming based on your comments that eight years ago when you qualified for a mortgage, your total combined household income was 50-60K.

The $32,000 figure cited in the article was for household income.

[PghYinzer]

Cleveland actually has a lower median price of housing, but costs associated with that housing are higher, thus leading to needing a higher income. Pittsburgh ranks high on lists of social mobility, and this may play a part in that. You can buy a home in Pgh on a smaller salary than other places. Places like Cleveland rank low on social mobility rankings because you have to pay more to have something not as nice.

And more shocking is this is from an article today in the Plain Dealer.

The Northeast Ohio Media Group reported earlier that suburban prices in Cuyahoga County increased 3 percent last year to a median of $120,000, based on a NEOMG analysis of county real estate records.

Cleveland ran well below the suburban median, with prices up 7 percent to $27,900 citywide.

The median price of housing in Cleveland proper is less than the cost of a new car.

[theta_sigma]

Originally Posted by jfds

You are combing both incomes. I'm assuming based on your comments that eight years ago when you qualified for a mortgage, your total combined household income was 50-60K.

The $32,000 figure cited in the article was for household income.

It was around $55k when we bought, so yes, higher than $32k. But we also bought a house in the East End rather than in the wilds of Westmoreland County or in Homewood, and we had and have student loans as part of our debt to income ratio. You can buy a house in this region for very very little money. Doesn't mean you should necessarily, but you can.

[eschaton]

Originally Posted by theta_sigma

We bought our house 8 years ago and at that time the only non-slum east end neighborhoods we could even consider due to prices were Morningside, Stanton Heights and Swisshelm Park.

I'm sorry, this really is an exaggeration. We bought a house for $53,000 in Lawrenceville during that period. Admittedly it needed a lot of work, but it was doable. Although the habitable houses were more like $80,000 even then. I'm pretty sure you could have afforded an (admittedly tiny) house in Bloomfield as well.

Originally Posted by gg

To be honest, all this shows is the amount of poverty in our city limits. Lets face it, we have way more poverty than other cities like San Francisco. Heck, even NYC has way less poverty than just back in the 90's. Pittsburgh has not grown. Having this much poverty is such a drag on schools, infrastructure and more because there is no money. You can't tax the working people too much or they will flee to suburbs.

According to a link from this very site, Pittsburgh has 20.4% of the population under the poverty line, versus 21.3% for NYC. That said, the numbers are close enough that the gap may be closing - although NYC is more losing the middle class than the truly poor, since public housing isn't going anywhere in the City.

Regardless, I think your core assertion is broadly wrong. Southwestern PA is more unique as a metro because we have so many places like Braddock, McKeesport, Alliquippa, Rankin, Duquense, Clairton, etc - not really suburban areas outside of the core city and much poorer than the city overall.

[theta_sigma]

Okay, yeah we looked at a place in Lawrenceville, too. It was just over what we really wanted to pay and needed a full reno. I left that out by mistake. But my point still stands about Shadyside/Highland Park/Squirrel Hill/Point Breeze and adjacent areas. They were never cheap. It's been Yoga and Froyo land for a long, long time.

Recently gentrifying areas are Lawrenceville, East Liberty and Polish Hill (and the Strip kind of? idk the Strip is weird). We did scout around Bloomfield but all we could afford were really rundown sketchy places. There just wasn't much for sale there at all, actually, at the time. Those Nonnas hang on to their homes like grim death! Greenfield seemed juuuust out of our reach except for, again, run down somewhat sketchy bits.

[eschaton]

Originally Posted by theta_sigma

We did scout around Bloomfield but all we could afford were really rundown sketchy places. There just wasn't much for sale there at all, actually, at the time. Those Nonnas hang on to their homes like grim death!

Bloomfield's issue is that it's like 75% renters, as opposed to Lawrenceville, which is only around 50% renters. Once houses are converted into rental properties, they change hands less frequently, and are often sold without ever going onto the MLS at all through private transactions between landlords. To complicate matters further, a huge number of the houses (including virtually all of any size) are split into two or more units.