The East Suburbs have the highest foreclosure rate among the four suburban areas that lie outside the city of Pittsburgh.

One foreclosure occurs for every 7.3 home sales in the East Suburbs, according to RealSTATS, a local company that tracks real estate transactions in seven counties around Pittsburgh.

With older housing stock and less new development than surrounding areas, the East has the same foreclosure rate as the city of Pittsburgh.

But in the North Hills, where growth has been steady, the foreclosure rate falls to one for every 20.5 home sales.

In between are the South Hills, where there are 15.4 home sales before one foreclosure occurs, and the West Suburbs, where the rate is one foreclosure for every 17.5 homes sold.

Ninety percent of homes that ended up in foreclosure between 2000 and 2007 sold for less than $100,000 prior to foreclosure, according to information provided by RealSTATs.

In Allegheny County, the average home price in that same time period was $128,949.

In the East Suburbs, home sales averaged $93,134 compared to the North Hills, where home prices were about $205,000.

The first quarter of 2008 marked a record high number of foreclosures in the five-county area of Allegheny, Beaver, Butler, Washington and Westmoreland, according to RealSTATS. The increase from the same time period last year ranged from 4 to 10.9 percent in Allegheny, Beaver and Butler counties and jumped 34.2 percent in Westmoreland.

Socioeconomics

The glaring socioeconomic disparities cannot be overlooked when comparing foreclosure rates.

The communities outside Pittsburgh with the top foreclosure rates have lower median household incomes and larger minority populations than those with the lowest foreclosure rates, according to statistics compiled by Allegheny County Depart-ment of Human Services.

Edgeworth Borough, which had the lowest foreclosure rate in Allegheny County between 2000 and 2007, is a community with 5 percent of households run by single mothers and where 11 percent of housing units are renter-occupied. When it comes to education, 98 percent of Edgeworth's 1,730 residents are high school graduates and 74 percent are college grads.

Those statistics are a stark contrast to those of North Braddock Borough, which has the highest suburban foreclosure rate. There, 12 percent of households are run by single mothers, and 41 percent of units are renter-occupied.

Of North Braddock's 6,410 residents, 78 percent have graduated from high school, but only 9 percent have completed a bachelor's degree.

"Buyers in the $100,000 and under market may not be as knowledgeable and may be more easily led to over-borrow," says Mark Ratti of RE/MAX CSI South. "People always want more than they can afford."

Buyers in that price range also might have taken advantage of financing 100 percent of the purchase price, without a down payment, which can be a problem if the owner refinances the home for more than it's worth, Ratti says.

But Hosack has seen an increase in foreclosures in higher-priced properties -- four or five homes in the $800,000 range just this year.

"A lot of these people had money in the stock market that dried up," says Hosack, adding that owners with troubled businesses are affected.

A ripple effect

Neighbors, schools and municipalities are affected by foreclosures.

A glut in the number of homes on the market because of foreclosures might make it harder for another homeowner to attract a buyer, says Tom Hosack, president of Northwood Realty Services.

RealSTATS reported that Penn Hills had 27 foreclosures this January, the most of any other Allegheny County municipality. In the same month, North Huntingdon, which has been in a growth period in recent years, ranked eighth in a seven-county area with seven foreclosures.

"Obviously, this situation impacts how the district and community are viewed by people and businesses within the community, outside people and businesses who consider moving in or investing in the community, and the general public" says Teresita Kolenchak, public relations director for Penn Hills School District.

"If the property is not purchased, it remains vacant and we do not receive taxes. We also lose students if the property owner relocates to someplace outside Penn Hills."

On the sale block

Both Allegheny and Westmoreland counties recently held monthly sheriff's sales.

Allegheny had 306 properties listed, of which about 10 to 15 percent are tax lien sales, says Sgt. Richard Fersch, who handles the sales for the sheriff's department. That leaves more than 250 that are mortgage foreclosures.

In Westmoreland County, there were 143 properties up for sheriff's sale in May.

The attorney representing the lender determines the bid price, which generally represents the judgment for the debt owed, taxes and the fees that have been paid to bring the property to sheriff's sale, according to the Allegheny County Sheriff's Web site.

Surprisingly, eager buyers aren't forming a line at sheriff's sales waiting for a deal.

"I'm lucky I sell about 10 (properties) a month at sheriff's sale," Fersch says.

Properties not purchased must be bought back by the lending banks, which have to pay any back taxes and fees owed before they receive a clean title to resell the house.

Lenders often are willing to work with the borrower to avoid the costly foreclosure process, Fersch says.

Next week: How to stop foreclosures.