The Mon Valley Housing Market
I’ve been staring out the 61C windows the past few days looking for more things that might be interesting for yinz to know about the neighborhoods of the Mon Valley. (It beats doing board review questions.) One thing I noticed today: there are a LOT of offers to buy homes down here. In addition to the “We buy ugly houses” billboards (which are so close that you can see two of them with only one billboard in between), there’s other signs up on telephone poles. At first, this seemed like an encouraging sign: people wanting to invest in property here.
(Image courtesy of Bek_alkaline3.)
Then I thought back to all the news stories I’ve been hearing in the press lately about the sub-prime mortgage market and the profits to be made from buying houses before foreclosure, and I understood a lot more about what’s really going on here. It’s kind of chilling. The HomeVestors number is a nationwide toll-free that refers you to a local franchisee. The handmade signs on billboards give a 724 area code. The new question on my mind is: who’s buying these homes, and more importantly, who are they flipping them to?
Other important answers to other important questions:
Many of the people losing their homes are losing them because of our outrageously high property taxes.
PA ranks the 9th highest among the states for property taxes as a percent of the home value.
PA ranks the 8th highest for per student spending.
In the City of Pittsburgh, 2/3 of our property taxes go to the schools.
PA’s 2006 SAT scores ranked 47th out of 51 (includes District of Columbia)
Looks like we are again paying a very high price for not a whole lot of results. The price some people are paying is their home.
Can you show me some evidence that the property tax thing is true outside of City of Pittsburgh? I certainly don’t like how high my tax bill is here in the city, but the vast majority of it is Pittsburgh, not Allegheny County tax. I know some people have indeed lost homes to the tax problem, but I understood it to be largely fixed-income seniors living in neighborhoods that got gentrified.
Also, the current proposed solution (raise sales tax to lower property tax) is IMHO not a good idea to help save homes in these distressed communities. The sales tax is well known to fall more heavily on the poor.
Our property tax is made up of 3 components: city, county and school. Here are the 2006 tax rates (millage) for the various municipalities in Allegheny County:
http://www.realtorsassociationofmetropolitanpittsburgh.com/govt/millages2006.html
I was in error about Pgh’s percent of school taxes to total taxes….they’ve gone down since Roosevelt closed all the half-empty schools. It is now “only” 37% of the total bill in 2006. But if you look at the above table, you’ll see the problem is not just with the City of Pittsburgh, but rather it is pervasive and problematic from rich to working-class to distressed neighborhoods throughout the county and probably the state. (Fox Chapel is 76%, Castle Shannon is 63%, Wilkinsburg is 65%)
I agree with you about a raise in the sales tax not being the solution. Moving a blob of taxes from one pocket to another never solves anything. The hard part here is that spending levels are going to have to be scrutinized and reduced. And since there is no will within the school districts to do this, I suspect not much if anything will be done anytime soon.