Cleveland Fed: Foreclosure lowers home prices by 1.6%
The effects of residential foreclosure on local housing prices may be higher than estimated in previous studies, research by the Cleveland Federal Reserve finds.
By decomposing the effects of foreclosure into "supply" and "disamenity", the paper's author finds that the addition of each single-family home to the local market decreases prices within 250 feet by 1.6%. The paper also shows that high vacancy areas see a decreasing effect on local home prices with each additional unit foreclosed.
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