IDEAS home Printed from https://ideas.repec.org/a/taf/rjerxx/v33y2011i2p179-208.html
   My bibliography  Save this article

Short-Term Own-Price and Spillover Effects of Distressed Residential Properties: The Case of a Housing Crash

Author

Listed:
  • Nasser Daneshvary
  • Terrence Clauretie
  • Ahmad Kader

Abstract

Most previous empirical studies of price spillover effects of foreclosure on no-default transactions are based on data from a stable housing-market period. This study uses transactions for 2008 from a housing market with a relatively large number of real estate owned (REO) sales/foreclosures. The overall results indicate that: (1) REO and in the process of foreclosure properties have the same spillover effects, but short sales do not produce a spillover effect; (2) models that control for the overall market trend produce smaller spillover effects; (3) the marginal effect of an REO is 1%; (4) the cumulative effects of multiple distressed neighbors can be as severe as 8%; and (5) excluding transactions of homes that were sold under distress from the sample increases the estimated marginal spillover effect to about 2% and the cumulative effects to about 21%.

Suggested Citation

  • Nasser Daneshvary & Terrence Clauretie & Ahmad Kader, 2011. "Short-Term Own-Price and Spillover Effects of Distressed Residential Properties: The Case of a Housing Crash," Journal of Real Estate Research, Taylor & Francis Journals, vol. 33(2), pages 179-208, January.
    • Handle: RePEc:taf:rjerxx:v:33:y:2011:i:2:p:179-208
    DOI: 10.1080/10835547.2011.12091303
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10835547.2011.12091303
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10835547.2011.12091303?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lambie-Hanson, Lauren, 2015. "When does delinquency result in neglect? Mortgage distress and property maintenance," Journal of Urban Economics, Elsevier, vol. 90(C), pages 1-16.
    2. William M. Doerner & Andrew V. Leventis, 2015. "Distressed Sales and the FHFA House Price Index," Journal of Housing Research, Taylor & Francis Journals, vol. 24(2), pages 127-146, January.
    3. Zhang, Lei & Leonard, Tammy, 2014. "Neighborhood impact of foreclosure: A quantile regression approach," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 133-143.
    4. Marcus T. Allen & Justin D. Benefield & Christopher L. Cain & Norman Maynard, 2024. "Distressed Property Sales: Differences and Similarities Across Types of Distress," The Journal of Real Estate Finance and Economics, Springer, vol. 68(2), pages 318-353, February.
    5. Marcus T. Allen & Justin D. Benefield & Ronald C. Rutherford, 2023. "Co-Listing Strategies: Better Transaction Outcomes?," The Journal of Real Estate Finance and Economics, Springer, vol. 67(3), pages 517-544, October.
    6. Ramya Aroul & J. Hansz, 2014. "The Valuation Impact on Distressed Residential Transactions: Anatomy of a Housing Price Bubble," The Journal of Real Estate Finance and Economics, Springer, vol. 49(2), pages 277-302, August.
    7. Ying Huang & Ronald W. Spahr & Mark A. Sunderman, 2020. "The Impact of Default and Foreclosure on Housing Values: Rings Vs. Neighborhoods Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 60(3), pages 338-374, April.
    8. Tsai, Ming Shann & Chiang, Shu Ling & Miller, Chen, 2016. "A study on the distribution of the foreclosure lag, its expected capital opportunity cost and its analyses," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 45(C), pages 156-170.
    9. Alan Tidwell & Andres Jauregui & Vivek Sah & Andrew Narwold, 2018. "Cash and Distressed House Sales Price Discounts: Dual Sample Selection Spatial Interdependence Approaches," The Journal of Real Estate Finance and Economics, Springer, vol. 56(1), pages 101-139, January.
    10. Lauren Lambie-Hanson, 2013. "When does delinquency result in neglect?: mortgage delinquency and property maintenance," Public Policy Discussion Paper 13-1, Federal Reserve Bank of Boston.
    11. Kirchhain, Heiko & Mutl, Jan & Zietz, Joachim, 2021. "Spillover effects of company news across real estate markets and causal impact analysis," Journal of Housing Economics, Elsevier, vol. 54(C).
    12. Bian, Xun, 2017. "Housing equity dynamics and home improvements," Journal of Housing Economics, Elsevier, vol. 37(C), pages 29-41.
    13. Suzuki, Masatomo & Hino, Kimihiro & Muto, Sachio, 2022. "Negative externalities of long-term vacant homes: Evidence from Japan," Journal of Housing Economics, Elsevier, vol. 57(C).

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjerxx:v:33:y:2011:i:2:p:179-208. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjer20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.