Foreclosure's price-depressing spillover effects on local properties: a literature review

Kai-yan Lee

No 2008-1, Public and Community Affairs Discussion Papers from Federal Reserve Bank of Boston

Abstract: The costs of foreclosure often spill over from foreclosed properties to other nearby properties. This short paper reviews some of the research on foreclosure's price-depressing impact on sales of nearby properties, only one of several forms of spillover effects. The studies reviewed here focus on various cities, use different datasets and methodologies, employ different assumptions, and cover different time periods. Their conclusions about foreclosure effects range from reducing nearby properties' sales value by as little as 0.9% to as much as 8.7%. Research also shows that negative spillover effects tend to diminish with distance and time, as does the marginal impact of each additional foreclosure. This paper also presents two studies with rough estimates on New England communities' possible losses from foreclosures' spillover effects on nearby property values.

Keywords: Foreclosure; Foreclosure - New England; Housing - Prices; Housing - Prices - New England (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.bostonfed.org/commdev/pcadp/2008/pcadp0801.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbpc:2008-1

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Public and Community Affairs Discussion Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().