Tuesday, January 17, 2012

The unbearable assessment of the Pittsburgh Hipster

Some think I don't get the assessment angst.  I do and it can all be explained by the Pittsburgh hipster. 


So last month the Washington Post named Pittsburgh the new 'in' place and in some official list maintained I guess by those powerful AP word czars we must have displaced tragically hip Portland.  Now some of us noticed this last month when it came out, but the media catches up and the PG had a fun story on Sunday on this neo-hipsterism that is somehow making Pittsburgh 'cool' in a way it may never have been (ever?).  So if you didn't go read  Watch Out Portland, Pittsburgh's looking hip and in particular read this remarkable quote:
As for Pittsburgh being attractive to young people, "well, why wouldn't it?" said Mr. Sussman, the ukulele instructor.

"It is cheap to live here. It's the only city I know of where you can have a part-time job at a coffee shop, still afford a mortgage payment and be able to go out once a week. ... How would that not be appealing to any young person who isn't ready to settle down?"

There you go,  it really is an amazing quote and the whole assessment angst follows from it directly.  Our new hipster denizens are observing as new what generations or more have lived here.  Real estate here just does not appreciate. In Pittsburgh real estate is hipster-priced. Period. End of story. Forget what happens everywhere else on the planet, real estate can be had in Pittsburgh cheap. Like really cheap, cheaper than anywhere else.  Forget what the tax might be set at, it just can't be correct that our homes have inched up in value.  Not too long ago it was observed that the total real estate value in the city of Pittsburgh (a city with at least 300,000 residents) was lower than the valuation in Lower Merion, a borough in Eastern Pennsylvania with less than a quarter the population. 

So here is a story.  Absolutely true and I'll protect the innocent, but a friend was absolutely livid at his new assessment. Angrier than anything I've seen.  I asked by how much of course and it as near exactly 50%.  The argument about tax rates being reset was not the point it was explained to me. It was just how could they be so WRONG.  It wasn't about what the tax bill would be, it was about getting it right.  Hard to argue against the point.

So a week later emotions abated and we talked again.  Turns out he dug up some paperwork.  Just last year a 2nd mortgage was taken on the house and there had been an appraisal done. He had not looked at the details because the loan was approved so it was never an issue.  Now by univeral agreement, almost all commercial appraisals these days are coming in at extremely conservative levels for legal reasons related to the foreclosure crisis most likely. It is a particular problem here in Pittsburgh where lots of folks are willing to pay prices for local property, but often cant get a loan at the amounts they want and can pay because the appraisals are coming in so low.  Still, it turns out that the property in question here the appraisal last year was HIGHER than what the new assessment figure came in at this year. Go figure.  "Maybe they got it right" was the new thought.  I have wondered for some time how many long-time Pittsburghers would be surprised by what value say Zestimate gives for their property.

So yes, there are things going on in SOME neighborhoods and communities.  Places that were once priced for armageddon are actually being invested in. Not all, but some. Arguably more than a few.  Might seem like big percentage changes, but more a reversion to the mean.  Seriously take Lawrenceville.  There is a French gourmet bakery thriving in Lawrenceville.  Think about that.  The Financial Times came in and decreed the neighborhood a "Diamond in the Rust". These are remarkable things that would have seemed inconceivable even a decade ago, ridiculous two decades ago and delusional three decades ago.  Certainly these of not signs of prices going down are they?

For some of us, memories persist way to long, for others maybe not long enough.  Lawrenceville was from upper to lower a depressed place until not too long ago.  Some just can't believe there are even 6 figure prices being paid for a lot of those properties.   I can say that having been born in Lawrenceville that there is more than a little cognitive dissonance about it all.. and it all plays out in the assessment numbers.  Not as much cognitive dissonance as my born-Yunzerness feels when watching snippets of that Portlandia movie, but close.


Blogger JRoth said...

My Zesstimate is exactly - exactly - what I would have said my house is worth.

It is also 51.4% of my assessment.

Go figure.

Saturday, January 21, 2012 12:39:00 AM  
Blogger JRoth said...

Oh, and FWIW, houses on Fisk and Main were going in the 6 figures 11 years ago. OTOH, I looked at a house on 39th (maybe 38th?) below Butler that was being sold for $5,000 in 1996.

There's a tiny amount of "nice" housing in Lawrenceville that was pretty much all bid up a long time ago; it's taken a decade for the tiny, under-plumbed rows to catch up.

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