Home prices have shot up recently in Fox Chapel — as if they weren’t already high enough in the suburb known for its wealthy families and sprawling estates.
The average list price for a home in Fox Chapel has hit $1.9 million — a whopping 21% spike from the average selling price of $1.5 million over the last 90 days, according to West Penn Multi-List data.
In April, one buyer smashed the comparable sales curve by paying a record-setting $6.3 million for a four-bedroom home on Fairview Road. Now many believe the sudden price inflation in this community stems from sellers measuring their homes to that sale.
“People are talking about how high that price is. They can’t believe it. It’s never happened before,” said Roz Neiman, a Howard Hanna real estate agent who specializes in luxury home sales.
The property sale was recorded on April 6 under the name Lava Trust as the purchaser. Lava Trust is controlled by Luis von Ahn, a Guatemalan computer scientist and CEO of the online language learning platform Duolingo.
Mr. von Ahn declined through his real estate agent to comment for this story.
However, it appears lately Mr. von Ahn has gone on a luxury home buying spree. And he doesn’t appear reluctant to pay top dollar for trophy properties.
TheRealDeal Real Estate News reported in December 2022, that Mr. von Ahn also was the buyer behind a trust which paid a record-breaking $22.5 million for a townhouse in New York City’s Chelsea neighborhood.
Duolingo, with 650 full time employees and a market capitalization of $6 billion, is headquartered in East Liberty, not far from Shadyside where Mr. von Ahn in 2011 also bought a $1.25 million house on West Lyndhurst Drive.
While recruiting tech talent over the years from Silicon Valley to work in Pittsburgh, he has sung the praises of the Steel City’s low home prices.
As recently as 2018, Duolingo ran a recruitment billboard on San Francisco’s US Highway 101, which encouraged tech workers to relocate to Pittsburgh where they could “work in tech” and “own a home” — which is harder to do in San Francisco where the average home price was $1.3 million in April, according to Redfin.
Mr. von Ahn’s big splash in Fox Chapel could be a hint of some unintended consequences of tech workers relocating here: With the means to pay higher prices, they could push home values up.
Worth whatever the buyer is willing to pay
Even before the record-breaking $7 million asking price for Mr. von Ahn’s home, listing prices in Fox Chapel were already around 10% higher than buyers were willing to pay. West Penn Multi-List data shows homes in the Fox Chapel zip code have sold, on average, for 90% of their list price over the last 90 days.
Until now, there were no comparable sales for a $7 million listing in Fox Chapel, but when it comes to luxury properties, comparable sales aren’t as important a factor in setting prices, said Dustin Nulf, a real estate agent at EXP Realty on Washington’s Landing.
“For high end properties like this, it’s very similar to commercial properties in that it’s worth whatever somebody is willing to pay for it,” Mr. Nulf said.
That’s because high-end buyers often pay cash and don’t need to meet conventional bank lending standards. If they want to spend cash on it, they’ll spend cash on it, Mr. Nulf said.
“Then all of a sudden you’ve got a record comparable home and all the other people in the neighborhood feel like since the seller got that price, they can get more for theirs too,” he said.
Ms. Neiman is a 36-year real estate veteran. She said she sells 40 to 50 properties a year with average prices of $1.3 million to $1.4 million. Her most expensive deal ever was a $5 million property she sold years ago on Fox Hunt Road, which was brand new construction and sat on 20 acres.
She didn’t see the interior of the $7 million listing and she doesn’t know any real estate agents who did because it was a private listing that had been pre-negotiated between the seller and buyer.
“This was an anomaly,” Ms. Neiman said. “The guy has tons of money and didn’t care what they were asking. But now there will be people who think their house is as good as that house and will put it on for $6 million or $7 million.”
“But we don’t have a lot of $6 million or $7 million buyers in this city.”
‘This is a really special home’
Denise Serbin, one of the Howard Hanna real estate agents who represented Mr. von Ahn in the $6.3 million sale, described him as a shrewd buyer.
“I had showed him a handful of homes in the Fox Chapel area and he just kept indicating that he wanted something newer,” Ms. Serbin said. “And finding new construction on a large scale at that level of luxury is slim.
“We have a lot of older homes that check off those boxes that are really magnificent,” she said. “But with older homes come old house problems.”
The Fairview Road home was built in 2014. It has 12,000 square feet of living space in the main house and two other structures — a guest house and detached garage — also sit on the three-acre estate.
Fox Chapel homes of comparable square footage and lot size have hardly fetched half the listing price of Mr. von Ahn’s new house. But she said this one — designed by John Hobart Miller — stands out above others because a team of master craftsmen cut its stone and built the interior carpentry.
“I can tell you having been in this house and knowing the house as well as I do, this is a really special home,” Ms. Serbin said. “The craftsmanship is really above and beyond what Pittsburgh has seen. I have not seen this type of quality in a home since I’ve been in some of the homes that were built at the turn of the century for the Vanderbilts, and the oil and coal barons.”
Mr. von Ahn, a former Carnegie Mellon computer scientist, made a fortune when his company Duolingo went public in 2021.
The website businessofbusiness.com estimated that even at a share price of $95, Mr. von Ahn’s stake in the company would be worth $374 million. Duolingo’s shares currently trade at $144.
Duolingo was incorporated in 2011 and has become one of the biggest edtech companies in the world. The mobile learning platform offers courses in 40 different languages with lessons taught in bright, colorful games.
With wealth gained from the public offering, Mr. von Ahn also paid a record price for the five-story townhouse in New York.
Duolingo has an office in New York. But Mr. von Ahn considers Pittsburgh his home.
In an article published April 17, he told the New Yorker magazine that he thinks “one of the things that has kept me grounded is being in Pittsburgh.”
“There’s just not that much to spend money on here,” he said. “There’s not a Ferrari dealership in Pittsburgh. Yeah, you can get a Ferrari, but you have to get it here from somewhere else. I live in a nice house — but it’s not, like, palatial — with my mother.”
Sellers may have to reduce their prices
The market for residential homes priced over $5 million is very thin in metropolitan Pittsburgh.
“Finding residential comparable sales over $5 million is difficult,” said Dan Murrer, president of RealSTATs, a Ross Township-based real estate information service.
According to data compiled by RealSTATs, only five homes sold for $5 million or more in the Pittsburgh region since January 2010.
Mr. Murrer said comparable sales would not have mattered as much in Mr. von Ahn’s financing since he only borrowed about half of the purchase price to make the purchase.
According to the Allegheny County Division of Real Estate Office, Mr. von Ahn obtained a $3.4 million mortgage from Morgan Stanley Private Bank to facilitate the $6.3 million purchase — a 50% loan-to-value ratio — which banks would consider to be a fairly conservative loan.
Homes on the market in Fox Chapel currently range in price from $354,000 to $3,995,000, according to West Penn Multi-List.
WPML data shows homes are priced an average 21% above their average selling price over the past 90 days, which to Mr. Nulf means some sellers may have to reduce their price to get sales.
“The people who live in Fox Chapel, they love what’s happening with the uptick in prices,” Mr. Nulf said. “It’s going to be a problem for people who want to buy in Fox Chapel. But if you were looking to buy into Fox Chapel, you were looking to spend $1.5 million or more easily.”
Tim Grant: tgrant@post-gazette.com or 412-779-5834
First Published: June 4, 2023, 9:30 a.m.
Updated: June 6, 2023, 9:39 a.m.