Pitt Survey Finds Home Foreclosure Rate in Some Pittsburgh Neighborhoods Exceeds State Average
—Despite claims of Pittsburgh’s relative immunity to the most recent financial and real estate crunch, certain city neighborhoods have racked up foreclosure rates above the state average, a tally by the University of Pittsburgh University Center for Social and Urban Research (UCSUR) revealed. These properties either languish on the books of financial institutions or are often offloaded for far below market value, two circumstances that can fast track a neighborhood’s deterioration.
Sabina Deitrick, director of UCSUR’s urban analysis program, and Christopher Briem, a regional economist in UCSUR, matched city foreclosure filings with assessment records from the Allegheny County Department of Real Estate to determine the location of real-estate owned properties—those held by a bank or financial institution. Deitrick and Briem published their results in the current issue of UCSUR’s Pittsburgh Economic Quarterly.
During 2008 and 2009, the statewide foreclosure rate was 0.7 percent—the 33rd lowest rate in the nation. In Pittsburgh’s Sheraden neighborhood, on the other hand, 117 foreclosures during those two years put the rate at 2.2 percent, followed by Knoxville with 1.7 percent and Marshall-Shadeland with 1.6. Even some of the city’s more stable neighborhoods such as Crafton Heights and Brighton Heights had a rate of 1.4 percent.
Recent reports of problematic foreclosure processes, or “robo-signing,” resulting in wrongful seizures and evictions have highlighted the influence financial institutions can have on real estate markets, Briem said. As an extension of that, large numbers of properties owned by financial institutions can have significant repercussions for an area—foreclosed properties often stand vacant or sell cheap.
The average sales price of the 628 Pittsburgh homes sold by a financial institution from January 2009 through January 2010 was less than $20,000. Moreover, 40 percent of those homes were located in just 10 neighborhoods. In Beechview, which had the highest number of real-estate owned houses, 26 homes sold for an average 37 percent less than their assessed value. Those same 10 neighborhoods also contained 40 percent of the 521 Pittsburgh homes owned by a financial institution in January 2010—Beechview led with 29 properties—meaning several more below-market sales in these areas are likely.
Only 15 banks do the majority of seizing and selling in Pittsburgh. This group held 60 percent of the 717 real-estate owned homes in Pittsburgh in May 2010. The leading holders were Fannie Mae (9 percent), the Veterans Affairs Administration (7 percent), U.S. Bank National Association (6 percent), Bank of New York Mellon (6 percent), and Wells Fargo Bank (5 percent).
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