Am I making a Big mistake? Local Bubble burst?

[archangel689]

As you probably already know Pittsburgh, PA has a very affordable
housing market. In the South Side of Pittsburgh there has been
substaintial increase in the cost of houses. Townhouses that were
purchased for 50k in 2002 are going for as much as 175k now. They are
vary in the updates, remodeling and inprovements. I've been looking at
houses there. I plan to sublease to friends, I've found what is as
reasonable of a deal as I think I can find.

However, eventhough there is development everywhere and houses are
getting revamped on almost every corner, there are for sale signs
EVERYWHERE. When I looked at the information presented to me yesterday by the Real Estate Agents they showed me a CMA... but all the
properties on it were sold in 2005 or earlier.... It seems nothing has
really sold in the immediate area (a few blocks)

I'm wondering if a crash is about to happen and I am making a really
stupid mistake.

[BajaGeoff]

It really depends on your goals. If you are looking to buy property and then flip it after a few years, then you might have missed your window. However, if you are in it for the long term, it sounds like the neighborhood is truly improving and it could be a good investment.

A similar situation just took place here in San Diego. Property values were skyrocketing four years ago and a lot of people were buying and flipping homes and making a lot of money. It then got to a point where the market became saturated with houses for sale and not enough demand. Currently, there are still a lot of homes on the market, and sellers are now dropping prices in order to attract buyers.

I would check and see how long houses are staying on the market in your area. That is always a decent indicator of how the market is doing. If houses are taking longer to sell, you might wait a bit and prices may even come down a little.