Corporate home purchases increased dramatically in Pittsburgh over past decade, study finds

The share of Pittsburgh-area homes purchased by corporations or real estate investors has risen dramatically over the past decade, according to a new study released Friday.

The study, performed by the nonprofit Pittsburgh Community Reinvestment Group, reviewed sales of homes ranging in size from single family to fourplexes with a market value of $1,000 or more. It found the share of homes in the city of Pittsburgh sold to corporations or investors increased from 15.5% of all sales in 2010 to nearly 25% in 2021. The share essentially doubled in Allegheny County’s remaining 129 municipalities, from 9.7% of sales in 2010 to 18% in 2021.

Predominantly Black, low-to-moderate income communities saw the highest percentage of all sales going to corporations or investors, including sections of McKeesport and Wilkinsburg, as well as the Pittsburgh neighborhoods of Allentown, Larimer and Knoxville. Nearly 3 in 5 sales in Central Oakland, which many students at the University of Pittsburgh call home, were to corporations or investors.

Chris Rosselot, the policy director at PCRG, told the Union Progress that corporations stepping into neighborhoods are “taking away” wealth-building opportunities from potential homebuyers who in some cases are deeply rooted in their communities. He added that the study was motivated by an apparent uptick in “We Buy Houses” signs and hearing anecdotally about more cash offers being made for homes.

“We’re losing out from these corporations who have the capital and resources to scoop up these properties,” he said. “Government and stakeholders have a lot of catch-up to do.”

Various studies have found corporate landlords are more likely than smaller landlords to evict tenants, raise rents and improperly maintain their properties. PCRG research analyst Druta Bhatt noted some potential homebuyers have to put money toward rent instead of what could have been mortgage payments to build equity in a home.

“It’s just less and less opportunities for them to buy a house and create that wealth for future generations,” she said.

Rosselot said he thinks the city land bank, which is designed to acquire vacant or abandoned properties and get them back on the open market for community-minded redevelopment, needs to play a stronger role in the local housing market. The agency has been more aggressive lately under new leadership, with its fifth property to be sold last week, after years of stagnation since its creation in 2014.

“Our land bank is limping to get going,” he said.

Corporations or investors often purchase homes at a reduced price compared to other buyers, according to the study. It found that in Pittsburgh they paid 70.2% of the average sale price between 2010 and 2021, and 72.4% of the average sale price in the remaining county municipalities over the same period.

Chris Briem, a regional economist at the University of Pittsburgh’s Center for Social & Urban Research, told the Union Progress that he’s part of a team studying purchases by real estate investment trusts and found similar results.

“We’re observing this activity, which is a little more different than the broader LLCs. They are much more concentrated in areas that have relatively lower prices,” he said. “They’re investors — they’re not going to buy the most expensive properties. I don’t think they’re looking at the least expensive properties.”

Sabina Deitrick, an associate professor at the University of Pittsburgh who’s collaborating with Briem, said the impact of larger corporations making purchases can in some cases be immediately felt on the ground.

“The locations are often in areas that are favored by first-time home buyers for their affordability, and reducing the number of houses in these communities pushes up prices for other homebuyers and can reduce the number of homeowners in these communities,” she said.

In some ways, Briem said, additional attention in recent years from corporate buyers might be Pittsburgh becoming a victim of its own success.

“Our markets have been so depressed for so long we weren’t always on the radar of this type of investor,” he said. “It’s coming around now that, all of a sudden, our markets seem to be doing a little better, we’re in the same pot as a lot of other places that might be attracting these types of investors with outside money.”