Pittsburgh revealed as most affordable city to buy a home (for rent, mortgage)

[CFP]

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.

that's what happens when your entire manufacturing base gets shipped overseas or automated

[sparrowmint]

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.

Yep, when I think low tax havens, I think NYC and San Francisco.

[jfds]

You may be able to find an "affordable" house in Pittsburgh with an annual income of $32,000, but it certainly won't be in a desirable neighborhood with quality public schools. Property and school taxes are very high in areas with the best schools. It seems that many first-time borrowers are not looking at the total cost of ownership.

In my opinion, a borrower(s) with 1-2 children in the Pittsburgh area will need to earn at least 75-100K a year or more to afford a house in "good" school district and at least $125-150K or higher to afford a house an area with the top performing public schools.

There may be a few exceptions, but overall if you're not earning six figures or more, chances are that your child will be attending either a mediocre or subpar public school.

[jfds]

Originally Posted by SteelCityRising

I'll either be able to buy something SUPER cheap needing quite a bit of work in Spring 2016 or buy something more to my liking in Spring 2017---assuming housing prices don't rise too quickly by then.

If the property that you purchase is unlikely to increase in value, then you might as well be throwing your money away. You would be better off renting or moving to a less expensive area.

I do not foresee property and wage taxes ever DECREASING in the city or surround suburbs.

[SteelCityRising]

Originally Posted by jfds

If the property that you purchase is unlikely to increase in value, then you might as well be throwing your money away. You would be better off renting or moving to a less expensive area.

I do not foresee property and wage taxes ever DECREASING in the city or surround suburbs.

Not everyone buys a home in their 20s or 30s so they can cash in and raid it as a "piggy bank" upon retirement. Some of us still buy homes NON-speculatively---just to have, you know, that old-fashioned purpose of SHELTER.

The way I see it is if I buy a home at age 30 and take out a fixed 15-year mortgage, then at age 45 I'll no longer have to worry about mortgage OR rent payments and can sock that money away into aggressive investment options to then provide a more comfortable retirement at age 65. I don't care if the home I bought for $50,000 in 2016 is only worth $60,000 in 2056.

[selltheburgh]

Originally Posted by jfds

You may be able to find an "affordable" house in Pittsburgh with an annual income of $32,000, but it certainly won't be in a desirable neighborhood with quality public schools. Property and school taxes are very high in areas with the best schools. It seems that many first-time borrowers are not looking at the total cost of ownership.

In my opinion, a borrower(s) with 1-2 children in the Pittsburgh area will need to earn at least 75-100K a year or more to afford a house in "good" school district and at least $125-150K or higher to afford a house an area with the top performing public schools.

There may be a few exceptions, but overall if you're not earning six figures or more, chances are that your child will be attending either a mediocre or subpar public school.

Most households don't have kids. I believe the statistic is that 80% of households in Pgh DO NOT have children under 18 years old.

19% of Allegheny County's population is under 18. 5% is under 5 year old. That means that only 14% is in school. Account for multiple children per household and I bet 85% of houses don't have school age kids.

Not everybody with kids can live in the area with the "best schools." That would make it impossible to have best, average and worst schools if all were "the best."

The article is about being able to buy a house, not being able to make 32k a year and to afford the most desirable part of a large metro region.

People making 32k household income are not looking to buy a house in Mt Lebo or Fox Chapel. They are happy to own a home and have time to do things other than work.

[Merge]

Originally Posted by selltheburgh

People making 32k household income are not looking to buy a house in Mt Lebo or Fox Chapel. They are happy to own a home and have time to do things other than work.

Simply not true. Both Sharpsburg and Blawnox offer home ownership opportunities for families with this amount of income.

[jfds]

Originally Posted by SteelCityRising

Not everyone buys a home in their 20s or 30s so they can cash in and raid it as a "piggy bank" upon retirement. Some of us still buy homes NON-speculatively---just to have, you know, that old-fashioned purpose of SHELTER.

The way I see it is if I buy a home at age 30 and take out a fixed 15-year mortgage, then at age 45 I'll no longer have to worry about mortgage OR rent payments and can sock that money away into aggressive investment options to then provide a more comfortable retirement at age 65. I don't care if the home I bought for $50,000 in 2016 is only worth $60,000 in 2056.

Assuming 3% down and taking out a 15-year loan for $50,000 at today's rates you could still easily spend $20,000 in interest by the time the loan is paid off. If the house depreciates in value then you will have taken a loss on your investment.

Now take into consideration property, school and wage taxes for the city and also PMI insurance if you have less than 20% for a down payment. Add all of that to your $400-500 a month loan payment and you may realize that buying is not always cheaper than renting.

Taking out a mortgage for a house that is unlikely to appreciate in value is a bad financial risk, especially if the house is located in an economically depressed area. That $50,000 home that you purchased today might be worth only $30,000 in 10-20 years. On the other hand, it may be worth the risk if you could pay in cash instead of borrowing.

[Goinback2011]

Originally Posted by jfds

Assuming 3% down and taking out a 15-year loan for $50,000 at today's rates you could still easily spend $20,000 in interest by the time the loan is paid off. If the house depreciates in value then you will have taken a loss on your investment.

Now take into consideration property, school and wage taxes for the city and also PMI insurance if you have less than 20% for a down payment. Add all of that to your $400-500 a month loan payment and you may realize that buying is not always cheaper than renting.

Taking out a mortgage for a house that is unlikely to appreciate in value is a bad financial risk, especially if the house is located in an economically depressed area. That $50,000 home today could be worth $20,000 in 10-20 years. On the other hand, it may be worth the risk if you could pay in cash instead of borrowing.

You pay those taxes whether you rent or buy. Landlords aren't taking a loss on their property.

And rents increase over time. A $450 rent 25 years ago is easily 3 to 4 times that amount today.

As for risk in buying in a depressed area, you're right.

[jfds]

Originally Posted by selltheburgh

Most households don't have kids. I believe the statistic is that 80% of households in Pgh DO NOT have children under 18 years old.

The article is about being able to buy a house, not being able to make 32k a year and to afford the most desirable part of a large metro region.

People making 32k household income are not looking to buy a house in Mt Lebo or Fox Chapel. They are happy to own a home and have time to do things other than work.

As I mentioned before, it doesn't make good financial sense to borrow money for a house that is unlikely to appreciate in value. You are likely to end up throwing your money away.

$32,000 a year salary is barely more than minimum wage. I seriously doubt there are many borrowers who qualify for a mortgage at this income level. The writers of that article are probably not taking into consider the very high property, school and wage taxes for the Pittsburgh metro.

No one should take on the financial responsibility of buying a house until they can really afford it.