Exiting the Pittsburgh real estate market
I bought a 1200 square foot carriage house in Pittsburgh on April 28, 2005. After 10 years of owning it, 9 years to the day of not living in it, and multiple episodes of listing it for sale and renting it, I have finally sold it.
To answer the big question: the sales price was about 48% lower than what I paid for it in 2005. After considering the rental income, favorable tax impact, and depreciation, I will still have a loss. In any case, I don’t regret having accepted the one and only offer someone made to buy my house. The sale eliminated my ongoing expenses of a mortgage payment, homeowner’s dues, vacant property insurance, utilities, and repairs. It’s also nice to know that I won’t have contractors waking me up with phone calls at 5:00 AM Pacific time when they come out to make a repair I’ll never see in person.
I’m still bullish on Pittsburgh as a city but I understand why my place took so long to sell. It’s weird. Weird houses get you points on social media sites but buyers can always rationalize their way out of an offer. My place was only 1200 square feet, 1 bedroom and 1 bathroom, and it was listed at a price that made it compete with much larger “normal” houses. It has little storage and, despite its origin as a garage, there isn’t any off-street parking. In an unusual condominium arrangement, the buyer gets the building but not the land it sits on. A small homeowners’ association consists of the carriage house owner and Gino, a man who owns the three units in the larger main house at the same address. For a modest monthly cost, Gino keeps the lawn mowed and the walkways clean. He’s easy to deal with but he also has 75% of the voting power. He also rents out all three of his units; that scares lenders that want to see a high owner-occupancy percentage. At my carriage house’s address, that percentage has been 0% for about 9 years.
Because I took out a 15-year mortgage in 2005 and made a few extra payments, my mortgage balance was only about 30% of what I initially paid for my house. During my time as a long-distance landlord, I could turn a small monthly profit (which I defined as “rent − (interest + taxes + insurance + property agent commission)”) as long as there were no repairs or maintenance needed. The rental agency I used for most of the time, Arbors Management, provided excellent service for a reasonable fee and could find a new tenant very quickly. I highly recommend them.
Arbors also put me in touch with Tom Critchfield of Berkshire Hathaway HomeServices when I decided to sell my place. Tom was very supportive and also pragmatic. Instead of excuses, he gave me explanations and he suggested options to help me find the right buyer for my weird little house. He even kept my listing in the front window of his brokerage for months despite its long time on the market being yet another red flag for buyers. Tom truly earned his commission and I recommend him to any seller in Pittsburgh, weird house or otherwise.
I feel good having cashed out of the Pittsburgh market. Now I only have a mortgage to pay on the slightly less weird 2-bedroom condo I bought in Seattle in the summer of 2012. Maybe it will have gone up in price by the time it comes to sell it. Maybe not. There are more important things in life.