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My house McKeesport house was built in 1926. It is a brick four square. The kitchen and bath were updated in the 1970s or 1980s with high quality materials (peach tile in the bath, and high quality, solid Maple kitchen cabinets). They were well maintained by the original family over the years and still show nicely, in my opinion. They are not modern, but they suit my taste. Fortunately, the rest of the house is original to the 1920s design, including the unpainted woodwork and stained glass.
Most everything was high quality back them, those tiles are probably 2X as thick as tiles now. I only recently replaced some of the shower plumbing on our home from 1940. The craziest thing to me is that my grandparents were married in the 1940's and for their wedding they were given a electric roasting pan. I used that last year for Thanksgiving, still works perfect over 70 years later and it was well used every year.
Name 1 thing you can buy today that involves electricity that you think will be working 70 years from now.
I kinda say no, a move in ready home should never cost $30k. You are talking about a $150 a month mortgage which to me means that a living wage for that area should reflect that. I guess you dont need to pay more than min wage then. I won't get into min wages and living wages but I dont think that is a positive sign for an area. Also keep in mind that if a home right now is 30k, it likely has little chance of any appreciation. Homes are not just a roof over a person's head, it is also an investment and for many families it ends up being the only thing many can afford to leave to their children.
Agreed. For every one person (the buyer or buyers) benefiting from depressed prices, there are far more harmed. The sellers have gotten poor return on their investment and probably need the money for retirement or another purchase. The area is bringing in little revenue from property tax. People with little disposable income are moving in (which is NOT good for business).
It depends on how you look at it. I am among a generation of Millennials who often complain about having student loan debt, lower wages than older generations, and finding it hard to save money to buy a home. It seems odd to me that low-priced, livable homes could be considered a bad thing, if there is a generation complaining about being priced out of home ownership and still living at home. I'm on my third cheap house in a depressed area, and have nothing bad to say about my investments so far. You also don't have much to lose, if you don't pay much for a property. Housing will always be worth something as a place to live or rent out. $150 per month mortgage on a house that rents for $700+ (even in Pitcairn) is a pretty good deal. Even if I were to take a loss on my McKeesport house, which won't happen because I stole it, I would have still managed to live like a king for $300 a month, in a region where rents on a house of that size might be triple that. It's not really a loss at all. I paid $10k for my first house and it was livable. I lived there for four years for basically free and saved about $25k. I'm not saying this path is for everyone, but I've been saying this forever -- it's an opportunity.
It's an opportunity if the home appreciates in value. Since it sounds like that hasn't happened, you haven't made enough on your past two sales to fully pay off your loans or move to a more desirable location.
Basically the low prices were good for you as a buyer and bad for you as a community resident and seller.
And each time you bought an inexpensive house, there was a seller who can't pay off their loans and may never be able to retire.
It's an opportunity if the home appreciates in value.
Appreciation is not necessary if you are saving money or living rent free. The amount you save in the long run is equal to what you might gain in appreciation.
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Since it sounds like that hasn't happened, you haven't made enough on your past two sales to fully pay off your loans or move to a more desirable location.
That's quite an assumption. I sold my first house by owner for about five grand more than I paid for it (cash). I had spent that much fixing it up, but I also saved $25k living there rent free. Factoring in costs, I made money. My point is there are other ways to make money on property besides appreciation.
Another assumption you make is that I want to move to a "more desirable area." I happen to love the history and architecture of the old mill towns and I am making these old houses better. That's my passion.
As for not making enough to pay off my loans, that is nonsense. I was able to buy my third house (a restoration project on the North Side) and put a down payment on my second house with the cash I saved living at the first house. I saved enough money living in a $10k row house for four years to fund buying two other houses (one which I own outright). I had my cake and ate it, too.
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each time you bought an inexpensive house, there was a seller who can't pay off their loans and may never be able to retire.
Another assumption. All three homes were estates, in the case of a deceased owner. Part of the reason homes are cheap in these communities is because the owners pass away and the children or relatives don't want the house. Also, if you browse the property assessment site as I do, most of these homes were purchased decades ago for tiny sums. Although I suppose ten grand may have been a decent amount for a house in the '70s, I don't think selling it for $45k thirty years later means anyone is going to be short on a loan!
I suppose you would rather see these old houses sit vacant? And I have another question -- if you don't think there should be $30k houses, where do you propose that someone who makes that in a year as a working professional with a degree should live? Should that person live beyond their means, or with their parents, or in a North Versailles studio? Anyway, I tell this story in hope of making someone think outside of the box.
Last edited by PreservationPioneer; 06-02-2018 at 07:44 AM..
I kinda say no, a move in ready home should never cost $30k. You are talking about a $150 a month mortgage which to me means that a living wage for that area should reflect that. I guess you dont need to pay more than min wage then. I won't get into min wages and living wages but I dont think that is a positive sign for an area. Also keep in mind that if a home right now is 30k, it likely has little chance of any appreciation. Homes are not just a roof over a person's head, it is also an investment and for many families it ends up being the only thing many can afford to leave to their children.
Let's say someone made $12 an hour. A $200 mortgage would allow that person to live below their means and save money, because they're living cheaper than rent. There would also be enough money to budget for future home repairs, if there wasn't an adequate emergency fund or if the person was living paycheck to paycheck (as so many do). Living below your means is sometimes easier than finding a job that pays well. Even if you make a lot of money, buying a house that you can easily afford might be smarter than maxing out your mortgage and calling it an investment.
Appreciation is not necessary if you are saving money or living rent free. The amount you save in the long run is equal to what you might gain in appreciation.
This is something people don't think about enough, probably because in many places people have bid up house prices so high that nobody is saving money by owning. I'm not opposed to a little bit of appreciation, but you don't need it to make the numbers work for owning a house in most of this area.
Appreciation is not necessary if you are saving money or living rent free. The amount you save in the long run is equal to what you might gain in appreciation.
That's quite an assumption. I sold my first house by owner for about five grand more than I paid for it (cash). I had spent that much fixing it up, but I also saved $25k living there rent free. Factoring in costs, I made money. My point is there are other ways to make money on property besides appreciation.
Another assumption you make is that I want to move to a "more desirable area." I happen to love the history and architecture of the old mill towns and I am making these old houses better. That's my passion.
As for not making enough to pay off my loans, that is nonsense. I was able to buy my third house (a restoration project on the North Side) and put a down payment on my second house with the cash I saved living at the first house. I saved enough money living in a $10k row house for four years to fund buying two other houses (one which I own outright). I had my cake and ate it, too.
Another assumption. All three homes were estates, in the case of a deceased owner. Part of the reason homes are cheap in these communities is because the owners pass away and the children or relatives don't want the house. Also, if you browse the property assessment site as I do, most of these homes were purchased decades ago for tiny sums. Although I suppose ten grand may have been a decent amount for a house in the '70s, I don't think selling it for $45k thirty years later means anyone is going to be short on a loan!
I suppose you would rather see these old houses sit vacant? And I have another question -- if you don't think there should be $30k houses, where do you propose that someone who makes that in a year as a working professional with a degree should live? Should that person live beyond their means, or with their parents, or in a North Versailles studio? Anyway, I tell this story in hope of making someone think outside of the box.
This will get into all sorts of political issues (wages being too low, college being unaffordable). There certainly was a seller in each case - they're children of the owners? OK that may mean they got very little inheritance and have to pay off their loans and send their children to college. I'm not really focused on your case - you brought it up but it's just one case. There are more victims (all sellers and residents) than winners when a real estate market is depressed. Of course I don't want the homes to be vacant. I want the region (including its real estate) to be thriving.
This is something people don't think about enough, probably because in many places people have bid up house prices so high that nobody is saving money by owning. I'm not opposed to a little bit of appreciation, but you don't need it to make the numbers work for owning a house in most of this area.
But you still have to factor in maintrnance and time (which is money) costs. That said, obviously there are some winners when a real estate market is depressed. There are just more losers.
I have done a lot of thinking on this, and the mill towns and working class urban neighborhoods in our city were seemingly occupied by older generations who lived modestly and within their means. Their homes were often small, wood frame, and were adequate for living but not intended as investments or piggy banks to cash out for their children later. If anything, they could be passed down to their childred as affordable places to live. But the baby boomers were upwardly mobile, and wanted to escape the unpretentious neighborhoods like Woods Run, or Elliott, or McKees Rocks, where houses were three feet apart and often a bit shabby, and move to suburbs where houses had big lawns and garages. They spent more money for things like school districts, and probably bought the most expensive houses they could afford. But the older couple who owned a sensible house in Troy Hill that they bought in 1960 for $7,000 isn't worried about loans or the place being worth a fortune when they die. They lived comfortably and practically on what they made and the house was a place to live. I really wish we could get back to that. Our area is full of affordable houses that nobody wants, and that is crazy to me.
But you still have to factor in maintrnance and time (which is money) costs. That said, obviously there are some winners when a real estate market is depressed. There are just more losers.
Yes, you need to figure maintenance costs in. If you can't do some basic repairs, you either need to learn or budget for quite a large amount for them.
However, I don't think we have a depressed market by any means and I don't think that there are more winners than losers here. I think the kind of markets you see in coastal cities where the prices get much, much higher than can be afforded on the average wage, are artificially inflated and create a many more losers than winners. The dynamic that houses can increase in price faster than wages is obviously only going to help those who are old enough to have bought earlier or rich enough to pay high prices. Everybody else can't get a settled placed to live without borrowing so much money that they are a risk of losing everything in what would have otherwise been a small recession. That dynamic and people looking at houses as an investment, instead of a place to live, is what drove the Bush recession. The costs of that were enormous and ongoing.
Pittsburgh's housing market is cheap, especially compared to what kind of jobs and amenities there are in the city. I'm glad I moved here so fifteen years ago. I've had people try to hire me away and times when I've looked around for other jobs. I've seen places where I could make more money, but never enough more that I'd be able to live as nicely as I do here after paying higher housing costs. I've seen places where I could play lower expenses (housing and/or taxes), but those places don't allow the kind of lifestyle you can live here. They'll have a longer commute or be in the middle of nowhere with nothing to do around or something.
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Anyway, I tell this story in hope of making someone think outside of the box.
