Forced sales and their impact on real estate prices
Han-Suck Song and
Journal of Housing Economics, 2016, vol. 34, issue C, 60-68
Based on data of sold apartments and single-family houses in Stockholm, Sweden, during the period of 2006 through 2013, we find that forced sales of apartments and single-family houses cause a substantial price discount. The results of a hedonic spatial Durbin model show a negative impact on transaction price of 20.1% for foreclosed apartments and 24.6% for foreclosed single-family houses. Furthermore, the price discount increases when the number of attempted auctions is limited, which is the case for forced apartment sales owing to a lost membership in a housing association (forfeited). In those cases, the discount is as high as 29.1%.
Keywords: Foreclosure; Mortgage; Housing; Spatial Durbin model (search for similar items in EconPapers)
JEL-codes: D82 G1 G12 G2 G21 R31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:34:y:2016:i:c:p:60-68
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