Foreclosures and house prices

Michele Loberto

No 1325, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper studies the impact of foreclosures on house prices in Italy using a large dataset of listings. We estimate that the foreclosure discount is considerable, and this would suggest a high degree of market segmentation and limited spillovers from foreclosures to the market for non-foreclosed homes. However, we find that the entry of foreclosures into the market increases the propensity of home sellers to adjust their list price. Moreover, foreclosure listings have a significant and negative impact on the prices of non-foreclosed homes nearby. Our evidence is quantitatively consistent with the recent literature on the impact of foreclosures on the US housing market.

Keywords: house prices; foreclosures; neighborhood effects (search for similar items in EconPapers)
JEL-codes: R31 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-ure
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Related works:
Journal Article: Foreclosures and House Prices (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1325_21

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