A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
The Impact of Foreclosure on Housing Prices
The aim of the study is to explain if the foreclosure effect on prices is explained by a lower quality of foreclosed houses, which is a crucial aspect in the intelligibility of foreclosures. Based on a novel and comprehensive dataset, we estimate the impact of foreclosure on home prices in Florida and Indiana from 2000 to 2008. We employ a model of housing demand, which enables us to flexibly estimate (unobserved) quality as a house-specific fixed effect. We find that house-specific quality explains the vast majority of the foreclosure effects on house prices. Our results also show that foreclosed homes in Florida and Indiana lost a considerable amount of value. For example, foreclosed homes in Fort Lauderdale (Florida) lost, on average, $42; 110 (12 percent) of the average house price in Florida), while foreclosed houses in Lafayette (Indiana) lost $23; 798, which corresponds to 16:1 percent of the average house price in Indiana. The estimation results show a significant degree of heterogeneity. In much of Florida, foreclosed houses lost most value at the upper part of the house size and income distributions. In contrast, foreclosed houses in Indiana lost most value at the lower part of those distributions. Finally, we show that non-foreclosed houses agonized losses (from 0:8 percent to 4:7 percent) due to other houses in the neighborhood being foreclosed.
The Impact of Foreclosure on Housing Prices
The aim of the study is to explain if the foreclosure effect on prices is explained by a lower quality of foreclosed houses, which is a crucial aspect in the intelligibility of foreclosures. Based on a novel and comprehensive dataset, we estimate the impact of foreclosure on home prices in Florida and Indiana from 2000 to 2008. We employ a model of housing demand, which enables us to flexibly estimate (unobserved) quality as a house-specific fixed effect. We find that house-specific quality explains the vast majority of the foreclosure effects on house prices. Our results also show that foreclosed homes in Florida and Indiana lost a considerable amount of value. For example, foreclosed homes in Fort Lauderdale (Florida) lost, on average, $42; 110 (12 percent) of the average house price in Florida), while foreclosed houses in Lafayette (Indiana) lost $23; 798, which corresponds to 16:1 percent of the average house price in Indiana. The estimation results show a significant degree of heterogeneity. In much of Florida, foreclosed houses lost most value at the upper part of the house size and income distributions. In contrast, foreclosed houses in Indiana lost most value at the lower part of those distributions. Finally, we show that non-foreclosed houses agonized losses (from 0:8 percent to 4:7 percent) due to other houses in the neighborhood being foreclosed.
The Impact of Foreclosure on Housing Prices
Siebert, Ralph (author)
2015-01-01
RePec:ces:ceswps:_5196
Paper
Electronic Resource
English
ddc:330 , nonparametrics , demand estimation , hedonic pricing equation , L10 , foreclosure , O30 , housing market , C10 , L60
Housing Foreclosure as A Geographically Contingent Event: Columbus Ohio 20032007
| Online Contents | 2013
Housing and Health: A Social Ecological Perspective on the US Foreclosure Crisis
| British Library Online Contents | 2012
JOURNEYS TO DEFAULT: APPLYING THE HOUSING-NICHE MODEL TO FORECLOSURE RISK AND CONSEQUENCE
| British Library Online Contents | 2014
Neighborhood impact of foreclosure: A quantile regression approach
| Online Contents | 2014
Determinants of a foreclosure discount
| Online Contents | 2020