Study shows increase in foreclosures

A local real estate agent said the recent spike in foreclosed housing might benefit students… A local real estate agent said the recent spike in foreclosed housing might benefit students looking to settle down in Pittsburgh, though some people disagree.

The increased rates of foreclosures in Pittsburgh were outlined as part of a study released by Pitt professors Chris Briem and Sabina Deitrick last month. The study concluded that foreclosure rates in certain Pittsburgh neighborhoods are higher than the statewide average.

The study found that communities like Beechview, Sheraden and Brookline, among others, have unusually high numbers of residential real estate-owned properties, which are properties owned by banks or financial institutions, typically as a result of foreclosure.

Sheraden, one of the areas that the study examined, has a foreclosure rate of 22.2 per 1000 housing units, several times the Pennsylvania average.

Despite some of Pittsburgh’s higher rates, Pennsylvania’s overall foreclosure rate of 1 per 950 housing units is still only about one-third of the national average, according to RealtyTrac, a firm that compiles foreclosure data.

Other neighborhoods in the greater Pittsburgh area, such as Carrick, South Perry, Mount Washington, Brighton Heights, Garfield, Hazelwood and Homewood North, also exhibit markedly higher foreclosure rates, according to the study.

“These aren’t areas where you would expect to see foreclosures,” Briem said. Less affluent areas have a smaller real estate market and therefore don’t see these numbers of foreclosures, he said.

Carol Marks, a real estate broker with Coldwell Banker, said foreclosures might actually be good for recent graduates, as foreclosed homes and surrounding properties of reduced value are more affordable for first-home buyers.

Briem, a professor with Pitt’s University Center for Social and Urban Research department, disagreed because the areas affected aren’t traditionally populated with students.

“I’m not sure if there is a direct impact on current students, who are mostly renters, because most of these areas with high foreclosure rates are far from neighborhoods where students live,” Briem said.

Briem also said that foreclosures cause negative consequences for neighborhoods, because they pull down property values, even in nonforeclosed homes.

“There is a trend with lower-priced homes being the first to [be foreclosed], because of predatory lenders and lower-income people being unable to pay their mortgages,” Marks said.

The study reported that since financial institutions have these foreclosed homes of lower values on their portfolios, that even after the market stabilizes, there will still be long-term impacts.

Despite the mixed implications, the study did confirm that overall, Pittsburgh’s housing market has weathered the national foreclosure crisis well compared to other parts of the country, like Riverside County, Calif., where the foreclosure rate is one in 103 housing units.