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The Impact of Foreclosures on Neighboring Housing Sales

Author

Listed:
  • William H. Rogers

    (University of Missouri at Saint Louis)

  • William Winter

    (University of Missouri at Saint Louis)

Abstract

Housing foreclosures likely have little neighborhood impacts if there are few foreclosures in a neighborhood and the foreclosed housing can resell quickly. However, when there are both many foreclosures and a sluggish housing market, foreclosures can lead to neighborhood destabilization, which should cause house prices to further fall. This paper measures the impact of foreclosures on housing sales using a unique dataset from St. Louis County, Missouri. Results show an expected decline the sales price of neighboring sales but the marginal impact of foreclosures seems to decline with an increase in the number of foreclosures. These results are robust to a variety of neighborhood control variables and spatial econometric techniques.

Suggested Citation

  • William H. Rogers & William Winter, 2009. "The Impact of Foreclosures on Neighboring Housing Sales," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 455-480.
    • Handle: RePEc:jre:issued:v:31:n:4:2009:p:455-480
    as

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    References listed on IDEAS

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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