How is buying or renting a house in Pittsburgh?
Auckland and the US city of Pittsburgh are on opposite ends of the housing affordability spectrum, but the former ‘Steel City’ also faces challenges – despite being singled out as one of the best american cities to live.
Demographia’s latest international housing affordability report found that prices in Pittsburgh, Pennsylvania were less than three times the median household income.
The annual report looked at 92 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Singapore, the UK and the US, and ranked their affordability based on the median multiple , which is the median house price divided by the median gross household income.
Prices more than three times the median regional income were considered unaffordable, but Pittsburgh’s median multiple was 2.7. This made it the most affordable city in the United States, where the median multiple was 5, and internationally.
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Auckland was the eighth least affordable city in the ranking, with a median multiple of 11.2, although property prices fell afterward.
Pittsburgh, which had a population of 2.37 million for the area and about 300,000 for the city itself as of the 2020 census, had an average house price of just over US$235,000 ($382,000 New Zealander) in July, according to Zillow, a real estate website similar to Swap Me.
While its prices rose 6.5% in the year to July, its median remained well below the US average of nearly US$356,000.
Another real estate website, Realtor.com, said the city had become a buyers’ market, with 3,160 homes for sale and properties on the market for an average of 51 days.
Of Pittsburgh’s 90 suburbs, Squirrel Hill North was the most expensive with a median listing price of US$715,000, while Sheraden was the most affordable with a median listing price of US$123,000.
In contrast, the Real Estate Insitute had the median New Zealand price at $810,000 in July. Auckland’s median price was $1.1 million. But the market is in the midst of a price correction.
Reserve Bank of New Zealand
Reserve Bank Governor Adrian Orr talks about the bank’s forecast that home prices could fall 20% from their peak.
Mortgages work differently in the United States, with 30- and 15-year fixed rate mortgages being popular. These rates are 5.55% and 4.85%, whereas the rate for a common variable rate mortgage was 4.36%.
New Zealand’s two-year fixed rates currently range from 5.29% to 5.45%, and five-year fixed rates are from 5.69% to 6.09%.
While Pittsburgh does not tax real estate capital gains, owners pay a 4% real estate transfer tax on sales. Buyers and sellers are jointly and severally liable, but it’s negotiable and sellers often pay.
But about half of Pittsburgh’s population rents rather than owns, and the median monthly rent for a three-bedroom home was US$1,600 in August, according to rental site Zumper.
While rents for three-bedroom homes were flat from a year ago, monthly rents for one- and two-bedroom homes rose 14% and 11% to $1,340 and $1,340, respectively. US$550.
There were 1,123 homes advertised for rent in August, though tenant advocates said the city needs more affordable rentals.
In New Zealand, Trade Me pegged the national median rent at $570 a week in June, up 5% from the same period last year. Listings were up and 9,543 rentals nationwide were listed on the site as of Monday.
Rental costs absorbed 22% of average New Zealand household income in the June quarter, according to the latest housing affordability figures from CoreLogic.
Some reasons for Pittsburgh’s more affordable prices are economic. The city’s economy has taken a hit from the decline of the American steel industry and its population has shrunk considerably.
This reduced demand for housing and helped keep prices down.
Since the 1990s, the city has transformed into a hub for the health, education and technology sectors. It now houses the headquarters of eight Fortune 500 companies and the offices of 1,600 technology companies, including Google, Facebook and Amazon.
But a recent Pittsburgh Tribune-Review analysis from the Bureau of Labor Statistics showed that the city’s economic rebound was slower coming out of the pandemic than that of many other metro areas.
He suggested that the region’s older-than-average population could have led to more retirements and that considerable population growth was needed to solve the problem.
Despite this, business news website MarketWatch recently named Pittsburgh one of America’s 20 best cities to live.
Relatively affordable property prices and rents, growing employment opportunities, and good quality entertainment amenities and options, ranging from prestigious art galleries to four professional sports teams, were one reason.
Pittsburgh real estate broker Theresa Ward said in a social media post that the city is also full of excellent schools and universities, surrounded by beautiful mountains and farmland, and there is continued investment in infrastructure, such as public transportation, and efforts to revitalize its diverse communities. .