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Want A New House & A Dream Career? Why Ditching The Coasts May be Your Answer

Want A New House & A Dream Career? Why Ditching The Coasts May be Your Answer

By Jeff Vasishta August 31, 2016
Photo courtesy of arunaproject.com

The Steel Town slices and dices its way to the top of another list. Not only was Pittsburgh 2015’s #1 city to flip a property but according to mortgage website HSH it is also the most affordable place to buy your first home. Flip fire and cool costs are usually the real estate equivalent of the perfect storm—conditions designed to create a rapidly inflated market—but according to The National Association of Realtors, Pittsburgh doesn’t feature even in the top 20 of cities with the greatest price gains.

Related: Turning Steel Into Gold: How Pittsburgh Became America’s #1 Flip City

Part of it because of the wildly differing neighborhoods in the city. Some such as Shadyside, Squirrel Hill, Oakland and Lawrenceville are very expensive but they border cheaper houses. In some cases, these cheaper houses can be purchased for under $20,000 like in Wilkinsburg, Homestead and Elliot. There’s an overall nullifying effect. What cannot be denied is the fact that overall, it’s cheap. When the phrase “Affordable Housing” was coined, they had Pittsburgh in mind. Potential homeowners need a salary of $32,390.09 to be able to afford a property there. Minimum wage workers get the maximum bang for their buck in the ‘burgh.

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Photo courtesy of cloutpolitical.com

Conversely, San Francisco, fueled by the tech industry, proved the most unaffordable city with a salary of $161,947.60 required to buy a house for the first time. It even topped LA ($92,091.89) and New York City ($86,215.44). So how does a first time home buyer manage to buy a property in San Francisco and Silicon Valley?

“We’re currently working with a pair of first time buyers who do not have 10% down on a $600K purchase price,” said Skip Levy, a thirty-year realtor with the Sereno Group who specializes in the area.  “Without help from family, they will not be able to buy until they save more money. These are also young people, in their 30’s, Cal Poly graduates and they are both project managers for big construction companies.  Without 10% down, they will need to obtain a FHA loan and buyers can’t be competitive if they are playing against cash buyers or those with big down payments,” he explained.

Matching Pittsburgh against the Bay Area is an interesting case study. Obviously Silicon Valley and San Francisco are home to the biggest tech companies in the world with salaries and home prices to match. But, when housing is so expensive, it begs the question—would buyers ultimately be better off living somewhere cheaper and sacrificing being in the nerve center of their industry? Now it appears a trade may not be so dramatic. Pittsburgh has a large tech footprint mostly based on Carnegie Mellon’s computer science program. Google is the dominant hi-tech force in the city, recently expanding their campus.

Pittsburgh’s affordability is in line with other mid-west cities that have been reinvented themselves, attracting home buyers with a combination of low prices and modern jobs. According to a study by Zillow, Columbus, Ohio is the currently the hottest apartment market in the US and is experiencing something of a building boom.

“The Midwest region is representative of the status of the broader U.S. recovery,” says Realtor.com‘s chief economist Jonathan Smoke, who compiles the website’s monthly list of the country’s hottest real estate markets. “When Columbus, OH, is the 10th hottest market in the country, you know that the Midwest—and the U.S. overall—is back and doing well.”

In fact, Smoke says, many Midwestern markets are continuing a boom period that kicked into gear last year.

“The Northeast is seeing much stronger year-over-year growth in today’s pending home sales data than the Midwest or any other region, but the Midwest’s growth is better than the U.S. overall,” he says.

All of which means that for first time buyers, sacrificing the coasts may the most sense to get on the property ladder.

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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