Saturday, September 8, 2007

More affordable housing




It is not entirely clear which of these Reading (PA) houses are on sale. The price - a very reasonable $8k - suggest that it is the burnt out one on the left. However, the photo is centered on the grey one on the right. Moreover, the listing doesn't mention anything about fire damage. The mortgage on this place is just $42 a month. There are some restaurants in DC where a hamburger will cost you more than that.

Few days ago, a burnt out wreck from Baltimore was posted on this site. That property was listed for $120,000. Baltimore is a city I know well. There are some great people living there, but let us be frank; it isn't San Francisco or New York. It is very tough town. I am less familiar with Reading, but it is hard to believe that life there is 14 times worse than Baltimore. However, that is what is implied by the price differential between two cities.

Of course, realtors will shout out that the difference is location. However, inertia is a more likely explanation. It takes time for sufficient numbers of people to migrate from high cost to low cost cities. Nevertheless, it does happen, which suggests that Baltimore is massively overvalued, while Reading might make a better long term real estate investment.

Many thanks to Jay, who told me that I shouldn't mention that Pennsylvannia is a great place to live. Jay was afraid that everyone in California might sell up and move there. Sadly, that is something I cannot do. Pennsylvannia is one of my most favorite places in America. It is time to sell up and move.

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