By Jordyn Hronec – Digital Producer, Pittsburgh Business Times
PITTSBURGH — In the 2022 Demographia International Housing Affordability study presented by the Urban Reform Institute and the Frontier Center for Public Policy, Pittsburgh was named the most affordable city to buy a home.
The 18th annual edition of the study examines middle-income housing affordability in 92 metropolitan areas across eight different countries, specifically examining median housing prices in relation to median household income in each market during the third quarter of 2021. The study uses a metric called the median multiple to rate affordability. The median multiple is the median house price in a metropolitan area divided by the gross median household income (pre-tax) in the same metro. The study then places each metro into one of four categories, ranging from most affordable to least affordable.
The median multiple number for the Pittsburgh market is 2.7, the lowest out of all 92 metros that were analyzed. In the U.S. as a whole, the median multiple was 5.0. Pittsburgh marks the only market in both the U.S. and globally to be categorized as affordable, with a median multiple number under 3.0. Overall, the study found that in 2021, there are five times as many markets with median multiples of at least 10.0 as a decade ago.
My commentary: This didn’t come as a surprise to me since we represent buyers and sellers across the globe. What wasn’t taken into account in this evaluation is the condition of our housing stock. If our homes were maintained, the cost of the homes would be higher. Moving forward the condition of our housing will likely continue to deteriorate. The lack of housing inventory on the market has led to multiple offers to purchase a home. In order to place a competitive bid, the potential buyer is waving home inspections.
There will be a cost for not inspecting a home at the time of purchase. As a former co-owner of an award-winning inspection company and former inspector, I wrote thousands of inspection reports. Our housing stock has many problems, and they are being passed on. If the buyer isn’t informed of the condition of the property at the time of purchase, then when or will the condition be corrected. In many cases the problem will persist and become more expensive to correct. Keep in mind some of the problems effect health and safety.
Since our team is involved in representing investors as well as traditional buyers, we have the opportunity to see the bids from various contractors to complete the corrections. Many of the bids are over $30,000,00. I have the ability to inform our clients of many of the condition problems prior to making an offer to purchase since I’m a Master inspector and a licensed Buyers’ Agent. NOTE: There are areas that I can’t evaluate when showing a home. By sharing what I observe, it helps the buyer make a more knowledgeable offer.
Despite this information, we still strongly recommend the buyer have a home inspection contingency in the offer to purchase. Why? I recall inspecting a home with a very high peak and a sharp slope roof. The home was less than 15 years old. I was not able to enter the attic, but with my equipment I was able to view the top of the roof. There was a large opening in the peak. I can only imagine the cost of repair if left undetected. What if the buyer had paid over the asking price and didn’t have a home inspection?
I sincerely hope the trend to wave the home inspection contingency stops. I also hope corrections are made to the housing stock for the health, safety and welfare of the homeowner and future buyer.
Don Minehart, The Sharon St.Clair Team at eXp Realty
