Time and distance heterogeneity in the neighborhood spillover effects of foreclosed properties

摘要

In this paper, we examined heterogeneity in the simultaneous space-time impact of foreclosures on neighborhood property values. Foreclosures with longer foreclosure processes were associated with negative neighborhood price externalities from the time the foreclosing household still had ownership of the property and continued through the Real Estate Owned period. However, foreclosures with shorter foreclosure processes were associated with negative neighborhood price externalities that did not occur until at least threemonths after the foreclosure auction and were much smaller in magnitude. Results suggest a negative neighborhood effect of extending the length of the foreclosure process. Policy encouraging foreclosure workout efforts, which when unsuccessful extend the duration of the foreclosure process, should take these additional price externalities into account.