If you own a home in the Pittsburgh region you have probably received a direct-mail piece from some company offering to pay you top dollar for it.
Remember last year, in an unrelated topic, then-President Trump urged supporters in the Youngstown-area: ‘Don’t Move. Don’t sell your house,’ Well, that is my advice to you today. Besides, where are you going to go? Unless you already have a second property then you would simply be entering unnecessary chaos. While you would likely get an unbelievable amount for your current house you will also pay top dollar for the next. Why? So you can be part of the drama? Fahgettaboudit.
Home prices in Pittsburgh are generally lower than in other markets thanks to many reasons. We are a very livable region. Renting can actually be more expensive than owning in may parts of southwestern PA. Many of us pay more each month on our car payment than our house payment. That’s great, right? Sure. Until The New York Times, The Wall Street Journal, and multiple websites noted that ‘Pittsburgh is one of the nation’s most affordable housing markets.’ Other media outlets note that flippers can make very high percentages if only they grab a property in Pittsburgh. I guess that the secret is out.
Everyone wants a piece of Pittsburgh. Fund companies are buying properties. Big companies are buying up properties. Some are tearing down existing homes to put up new options. Outsiders used to paying more cash for less house are here buying properties. All of the activity is, often times, squeezing out those who actually want to live in the properties: Pittsburghers.
I see that the real estate market is booming in town. Good. Properties are going above list price and getting multiple offers. It is a sellers market IF you want or need to sell your home. However, many of the new townhome communities and multi-unit housing options springing up are RENTALS.
It is great that large, out-of-state companies want to invest millions of dollars in the South Side, Strip District, or anywhere else. These new facilities are wonderful. They offer great amenities. But, they are rentals. Apartments are not condominiums. YOU will never own them. Someone else does. YOU will never have equity in them if you move there.
The housing portion of the American Dream was not built on renting. Don’t get me wrong: I am not against renting. I have had to do it a few times myself. However, one of the best ways for an average American to gain wealth is by owning property. Renting an apartment for a few years when you could have purchased a modest home is not going to help you gain wealth or build equity. All you will do is pad a corporation’s bottom line or maybe help the person on the other side of your duplex wall, which isn’t bad. Buying a cheaper property in a less convenient neighborhood could have been a great way to save money and step up to a nicer place someday. However, as the market tightens and prices rise, that scenario fades. Or, you could have kept the first house to rent out as you climbed the ladder of life.
When I moved back home after years of renting in Alexandria, VA, Baltimore, New York City, and New Jersey - I rented again. For one more year while I scouted the city for my ‘forever home.’ It was the smart thing to do….this time.
The economics of some of my past decisions did not make purchasing an intelligent option. As I gained much life experience and grew personally with my adventures I failed to secure equity in anything other than my resume. Had my career been a bit more stable (and lucrative) - like say bull riding - then I could have taken advantage of the benefits of homeownership much earlier. But, for me, considering the circumstances, renting was my best option. ‘Short-Term’ was obviously a very strong play.
So you can understand that it somewhat pains me to see multiple offers on a solid, single-family home because I also see that much of the energy in building housing ‘units’ here, and around the country, is geared towards rentals. When you see a ‘rental’ community being built know that you are shut out of the chance to gain equity by living there. As rentals flood the market upward pressure is put on the price of existing private homes. The supply of homes available to actually BUY is limited. In fact, our pool is evaporating as populations grow or migrate.
A young, excited couple moving into a posh new rental village will have a soul-crushingly difficult time saving a downpayment for their ‘real’ home, if they actually want one someday. According to Census.gov, the ‘owner-occupied’ rate of housing in the city of Pittsburgh is only 44.2%. The national average is 65.6%. Do we actually need more rentals in the city? Homeownership in the greater Pittsburgh region is 69.5%.
Buying a home is not for everyone. And those who rent may say, ‘Yeah, but with property taxes, you never really own your home. The government can always take it from you.’ True. But, remember that renting comes at a cost, as well. And, put down your $7 latte for this: If you are now priced out of the market, it may be your own fault.
Kevin Battle was once a member of the National Association of Realtors. He believes in home ownership (and renting). Battle is Co-Host of the KDKA Radio Morning Show with Larry Richert. The show airs M-F 5a-9a on Pittsburgh’s 100.1FM & AM1020 KDKA or on the free Audacy app. Ask your smartspeaker to: ‘Play KDKA.’