Homes in Shadyside and Squirrel Hill are solid bets for long-term price appreciation, but a recent study of real estate trends in and around Pittsburgh concluded the hottest place to own a home is the South Side.
A report by graduate students at Carnegie Mellon University's Tepper School of Business shows home values in South Side Flats and Slopes over the past 10 years have had the highest price appreciation in the city -- more than 10 percent annually.
Surprisingly, lower and central Lawrenceville, where homes vales have risen at a steady 8 percent each year, come in a close second place.
"A lot of people wouldn't think Lawrenceville has done that, but it's actually done very, very well," said John Sozansky, president of the Appraisal Institute's Metropolitan Pittsburgh chapter, which sponsored the study.
"They've really turned Lawrenceville around," Mr. Sozansky said. "They've cleaned up the streets. They have a nice thriving business district. There are businesses moving back into the Penn Avenue corridor."
While 10-year historic trends show steady, moderate home value appreciation of 2 percent to 4 percent throughout the region, growth and decline are very localized as far as neighborhoods are concerned.
Homes in Shadyside and Squirrel Hill have appreciated 5.7 percent and 5.3 percent, respectively. But economically depressed city neighborhoods such as Lincoln-Lemington, Belmar and Homewood have either experienced no home value appreciation since 1997 -- or had declining prices.
"While there's no one cause to explain the economic challenges faced in these neighborhoods, crime and the flight of the middle class are chief among troubles to be dealt with before growth can be expected to return," the report said.
Allegheny County's annual residential price appreciation at 3.8 percent was the lowest among all surrounding counties, according to the study.
Meanwhile, Butler County appears to be the home of the next real estate gold rush, but there too the market is localized.
"Butler has gone up, but a lot of it is due to certain neighborhoods, like Cranberry Township," Mr. Sozansky said.
"The rest of Butler County is significantly slower in growth. There's virtually nothing happening in the rest of the county."
Overall, home values in Cranberry and Peters in Washington County have grown 5 percent every year over the past decade as more people have migrated to communities along transportation hubs.
One might expect strong development in Beaver County given its proximity to the airport, but the CMU research found high property taxes on new homes was a primary reason for the low development rates there. Beaver County real estate values as a whole grew 4.3 percent per year over the decade.
Tax flight also has played a role in lower income families leaving Allegheny County. But the population loss largely has been mitigated by higher income families moving to Allegheny County for better K-12 education in public and private schools.
The region's growth, according to the study, will take the form of single family homes with condominium development in Allegheny County serving as the exception.
The study, which was based on historical sales data from public real estate records and interviews with real estate professionals, concluded that outside the city of Pittsburgh, the greatest development will be in Butler County, followed by Washington County.
The students did not examine every city neighborhood in detail, but the study suggested that the greatest appreciation in the city is expected to occur in higher risk neighborhoods with major projects under way, such as the North Side and Uptown, which will be home to the new casino and arena, respectively.
It does all boil down to the old real estate adage: Location, location, location.