Pittsburgh revealed as most affordable city to buy a home (Columbia: 2015, condo)

[SteelCityRising]

Originally Posted by theta_sigma

That's up to the whims of the market and most people, while they would love to retire wealthy with no effort, know that isn't likely to happen with an average home pretty much anywhere. I mean, who wouldn't want to retire wealthy with no effort? But buying a house is highly unlikely to lead to that scenario and most folks buy a house to live in and if it appreciates that's a really nice bonus. But it does suck when it depreciates because then you get underwater on your mortgage and that's no good. So you try to find a place that keeps up with inflation and isn't likely to depreciate.

Home appreciation over time should be considered a "bonus"---not a guarantee, though. With that being said outside of a select few neighborhoods I've been researching over the years (especially Sheraden---holy cow!) the vast majority of local neighborhoods in Pittsburgh enjoy consistent slow and steady appreciation on an annual basis. So many people, especially older Baby Boomers, factored home appreciation into their retirement formula as a guaranteed cash cow and faced a rude awakening during the market crash. Something that wasn't a guarantee never should have been considered a guarantee.

Also, I'm personally only looking for livable (yet requiring TLC) sub-$75k homes with a 15-year mortgage. Does it really matter that much if you buy a home for a fair market value of $60,000, pay the balance down to $52,000 after a few years, and the home is reappraised at a depreciated value $50,000 because the neighborhood declines a bit? Being "underwater" by just $2,000 shouldn't stress out most people. I'm underwater right now on my car loan by a couple thousand dollars, but I also have "gap insurance", which means if anything happens to my vehicle before I make enough additional principal payments to get the loan amount closer to parity with the car's value, then I'd be cut a check by this gap insurance company for the differential between amount owed on the asset vs. the current value of the asset at time of disposal. The gap insurance is dirt cheap, too, and I'd imagine such insurance also exists for homes if you're that worried about being "underwater".

I'm not talking about people buying a home worth $450,000 for $500,000 in 2008 because they were in a bidding war with other investors and then whining about being underwater now. I'm talking about people buying cheap homes that they want to fully pay off AS SOON AS POSSIBLE so they can have one less monthly expense to worry about and more money freed up for renovations, vacations, investments, etc. I know too many people in their 50s and 60s who still have mortgage payments when they should have their homes PAID OFF and be using that free money to more aggressively invest for a more comfortable retirement.

[bumpintheroad]

I'm trying to figure this out. There's got to be a reason why houses are said so affordable. I think it boils down to a few factors. 1) The area is not desirable, maybe crime, traffic, people, location, etc? 2) No work or low paying jobs? 3) Bad weather? 4) The houses need a lot of work, old or are not built well? 5) People just aren't able to make a living? You can buy a cheap home but you also need to be able to afford to pay your bills.

It's important to live in a place where it's economically diverse. This evens things out so businesses can survive. I've read about stores closing up in these strip malls. If people don't have money to pay for services or frequent businesses, an area can't be successful. Just my 2 cents.

[eschaton]

Originally Posted by bumpintheroad

I'm trying to figure this out. There's got to be a reason why houses are said so affordable. I think it boils down to a few factors. 1) The area is not desirable, maybe crime, traffic, people, location, etc? 2) No work or low paying jobs? 3) Bad weather? 4) The houses need a lot of work, old or are not built well? 5) People just aren't able to make a living? You can buy a cheap home but you also need to be able to afford to pay your bills.

The main reason the Pittsburgh region has such cheap housing prices is because Pittsburgh's population declined by over 50%, Allegheny County's as a whole by nearly 25%, and all of the outlying counties (with the exception of Butler) having populations which have shrunk since their peak as well.

Admittedly, much of this shrinkage has been due to declining household size. But there's still an overall glut of housing supply across the metropolitan area as a whole - more houses than there are households. As long as this holds to be true, the cost of buying a house will be relatively cheap here.

[bumpintheroad]

Originally Posted by eschaton

The main reason the Pittsburgh region has such cheap housing prices is because Pittsburgh's population declined by over 50%, Allegheny County's as a whole by nearly 25%, and all of the outlying counties (with the exception of Butler) having populations which have shrunk since their peak as well.

Admittedly, much of this shrinkage has been due to declining household size. But there's still an overall glut of housing supply across the metropolitan area as a whole - more houses than there are households. As long as this holds to be true, the cost of buying a house will be relatively cheap here.

What is the reason for the decline?

[Goodjules]

Originally Posted by bumpintheroad

What is the reason for the decline?

The big decline occurred in the 80s when the steel industry left. The area has never recovered the population that was lost. However, in recent years it has grown ever so slightly. There are other threads with the figures.

[eschaton]

Originally Posted by bumpintheroad

What is the reason for the decline?

Households declined around the country because family size shrunk. But if you mean the decline of the population beyond this, it was because the historically primary industry in the area (steel) went kaput in the 1980s. Many, many young people moved away, and their middle-aged stayed and aged in place. The stay-at-homes are now elderly and dying off/moving into nursing homes, which is resulting in a lot of housing stock opening up in many neighborhoods. In some cases, the result is young people moving in and gentrification. In others, it's further decline.

[Goodjules]

As I mentioned in an earlier post, I moved from the most expensive metro area, San Francisco to Pittsburgh a little over two years ago. Just saw this today. It's a funny comparison of home prices in SF and castles in Europe: 5 Castles That Are Cheaper Than An Apartment In San Francisco – UpOut Blog

A very clear example of why I moved to Pittsburgh!

[bumpintheroad]

Originally Posted by eschaton

Households declined around the country because family size shrunk. But if you mean the decline of the population beyond this, it was because the historically primary industry in the area (steel) went kaput in the 1980s. Many, many young people moved away, and their middle-aged stayed and aged in place. The stay-at-homes are now elderly and dying off/moving into nursing homes, which is resulting in a lot of housing stock opening up in many neighborhoods. In some cases, the result is young people moving in and gentrification. In others, it's further decline.

That being said, is the area full of locals for the most part?

[eschaton]

Originally Posted by bumpintheroad

That being said, is the area full of locals for the most part?

In the City, not so much. In the more suburban areas (unless they are wealthy) this is generally speaking the case.

[gg]

Originally Posted by sparrowmint

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

Do you really think you can compare Pittsburgh to NYC? Do you have any idea how huge NYC is and it being a WORLD hub of business? What do taxes have to do with anything if you are trying to compare NYC to Pittsburgh. San Francisco is just a place of super high demand and they can charge what they want. Get a grip.

The bottom line is the reason Pittsburgh gets these silly "most affordable" is because the city limits are FILLED with poverty. That makes it out to be like you can buy a home for $80K all over the place. Hardly. Then the taxes on top of it all, Pittsburgh isn't all the affordable to other small cities. You can't compare Pittsburgh to NYC. We are a town in comparison and you might as well compare Titusville to Pittsburgh if you want to stretch this stuff.