A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Determinants of a foreclosure discount
https://orcid.org/0000-0002-5338-7216
Abstract This study adds to previous research analyzing the impact of foreclosure status on real estate sales price by using a Swedish dataset were an appraiser has estimated the market value of apartments before they were sold at foreclosure auction. Appraisal data can address the issue of selection bias and a potential overestimation of foreclosure related discount. A mean discount of 7.9% with a corresponding median value of 9.5% is shown when comparing appraisal estimates with prices achieved at foreclosure auction. A hedonic model is also applied, and the resulting discount is estimated at 23.9%. Measures of local market conditions are related to the foreclosure discount, with hedonic price models and models using appraisal data producing consistent results. It is found that the discount is higher in lower priced neighborhoods, in neighborhoods that are heterogeneous in terms of price and in less liquid neighborhoods (significant in the hedonic model). It is also found that apartments with a higher value relative to the neighborhood price level sell at larger discounts. The results are consistent with studies on search and matching theory and contrast from earlier studies that attribute a foreclosure discount to seller motivational factors.
Determinants of a foreclosure discount
https://orcid.org/0000-0002-5338-7216
Abstract This study adds to previous research analyzing the impact of foreclosure status on real estate sales price by using a Swedish dataset were an appraiser has estimated the market value of apartments before they were sold at foreclosure auction. Appraisal data can address the issue of selection bias and a potential overestimation of foreclosure related discount. A mean discount of 7.9% with a corresponding median value of 9.5% is shown when comparing appraisal estimates with prices achieved at foreclosure auction. A hedonic model is also applied, and the resulting discount is estimated at 23.9%. Measures of local market conditions are related to the foreclosure discount, with hedonic price models and models using appraisal data producing consistent results. It is found that the discount is higher in lower priced neighborhoods, in neighborhoods that are heterogeneous in terms of price and in less liquid neighborhoods (significant in the hedonic model). It is also found that apartments with a higher value relative to the neighborhood price level sell at larger discounts. The results are consistent with studies on search and matching theory and contrast from earlier studies that attribute a foreclosure discount to seller motivational factors.
Determinants of a foreclosure discount
https://orcid.org/0000-0002-5338-7216
Abstract This study adds to previous research analyzing the impact of foreclosure status on real estate sales price by using a Swedish dataset were an appraiser has estimated the market value of apartments before they were sold at foreclosure auction. Appraisal data can address the issue of selection bias and a potential overestimation of foreclosure related discount. A mean discount of 7.9% with a corresponding median value of 9.5% is shown when comparing appraisal estimates with prices achieved at foreclosure auction. A hedonic model is also applied, and the resulting discount is estimated at 23.9%. Measures of local market conditions are related to the foreclosure discount, with hedonic price models and models using appraisal data producing consistent results. It is found that the discount is higher in lower priced neighborhoods, in neighborhoods that are heterogeneous in terms of price and in less liquid neighborhoods (significant in the hedonic model). It is also found that apartments with a higher value relative to the neighborhood price level sell at larger discounts. The results are consistent with studies on search and matching theory and contrast from earlier studies that attribute a foreclosure discount to seller motivational factors.
Determinants of a foreclosure discount
Donner, Herman (author)
2020
Article (Journal)
Electronic Resource
English
The Foreclosure Crisis and Neighborhoods
| British Library Online Contents | 2010
STATE ANTIPREDATORY LENDING LAWS AND NEIGHBORHOOD FORECLOSURE RATES
| Online Contents | 2011
Neighborhood impact of foreclosure: A quantile regression approach
| Online Contents | 2014
Free play and the foreclosure of New Babylon
| Online Contents | 2012