[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-321323-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-321323-en":130},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","the-impact-of-foreclosures-on-the-housing-market","The Impact of Foreclosureson the Housing Market","","The text examines how foreclosures influence housing market prices, emphasizing that foreclosed homes typically sell at a discount and that nearby properties experience negative spillovers. It describes multiple mechanisms—greater housing supply on the market and reduced buyer demand through credit-history “blemish” and lending exclusions—as well as neighborhood desirability effects from deteriorating conditions. Evidence from research in Massachusetts, New York City, and early studies suggests each foreclosure can lower nearby home values, with the neighborhood’s characteristics determining which channel dominates and informing mitigation strategies.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/the-impact-of-foreclosures-on-the-housing-market/321323/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/the-impact-of-foreclosures-on-the-housing-market/321323.png","ImageObject",300,407,{"name":42,"@type":43},"Sage","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-30","2026-09-21",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",8,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"Why do foreclosed homes often sell at a discount?","Question",{"text":63,"@type":64},"Foreclosed homes are typically sold below comparable prices, potentially because homeowners may neglect maintenance and because lenders may mark properties down to sell faster.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How do foreclosures affect nearby home prices?",{"text":68,"@type":64},"The impact can occur through increased supply of homes for sale and through negative externalities that reduce neighborhood desirability, lowering prices of nearby non-foreclosure properties.",{"name":70,"@type":61,"acceptedAnswer":71},"What determines whether different mitigation approaches are needed?",{"text":72,"@type":64},"The text argues that how foreclosures affect housing prices depends on neighborhood characteristics, implying that mitigation strategies should be tailored to local conditions.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},321323,1790698451,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,111,114,119,122,126],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & 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loans are either in default or in danger of being defaulted upon.Many of the proper-ties that back these loans will end up going through the foreclosure process.A growing body of research shows thatforeclosed homes sell at a discount and that foreclosures have a negative impact on the value of other homes that arenearby.The effect on nearby property values happens for two different reasons,but my recent work suggests that oneor the other predominates depending on certain characteristics of the neighborhood where the foreclosures are occur-ring.This finding implies that different approaches might be required to mitigate the negative effects of foreclosures indifferent neighborhoods.  \nAbout 2 million homes are somewhere in the midst of theforeclosure process,according to Realty Trac.Most of thesehave yet to go on the auction block,and nearly a fourthare owned by the lenders who provided or purchased thehomes'mortgages.More foreclosures are coming-accord-ing to the Mortgage Bankers Association,the number ofmortgages in foreclosure or more than 90 days delinquent isat a record high of about 4.2 million.  \nSuch a large supply of homes in or near foreclosure has thepotential to have a major impact on home prices.Foreclosedhomes typically sell at a discount,perhaps because the ho-meowners neglected to keep them up or because lenders arewilling to mark properties down in hopes of selling themmore quickly.Foreclosures also have a tendency to lowerthe prices of other homes nearby  \nRecent studies have estimated the magnitude of these ef-fects-and they're substantial.My own research suggeststhat the way foreclosures affect housing prices depends onthe characteristics of the neighborhood in which they occur.That finding implies we may need to use different strategiesto mitigate the problems caused by foreclosure.  \n## Some Evidence on the Size of the Impact\n\nHow much of a discount do foreclosed and nearby prop-erties sell for?John Campbell,Stefano Giglio,and ParagPathak studied home prices in Massachusetts and estimatedthat foreclosure-related sales have prices about 27 percentlower than comparable properties.They also estimated thateach foreclosure lowered the selling price of other(non-foreclosure)properties within a radius of about 260 feet bynearly 1 percent.  \nSSN D4281276  \nNumber 2010-15  \nOctober 27,2010  \nIn one ofthe first studies to examine the link betweenforeclosures and home prices,Dan Immergluck and GeoffSmith found something similar:their data showed that eachforeclosure depressed the value of homes within 660 feet by  \n0.9 percent.Looking at home prices in New York City from2000 to 2005,Jenny Schuetz,Vicki Been,and Ingrid GouldEllen measured a somewhat smaller discount.  \nWhile a l percent drop in housing prices may not seemterribly large,it can become hefty,since this effect increaseswith the number offoreclosures.If there were five foreclo-sures in the same vicinity,for instance,the discount wouldbe around 5 percent.  \n## Two Paths to Lower Home Prices\n\nThere are two different ways in which foreclosures can im-pact the prices of nearby homes.The first is that they addto the supply of homes that are currently on the market.A larger number of homes for sale in a particular marketmay translate into lower prices or a longer waiting timeuntil a sale is realized.  \nBut a wave of foreclosures may have an even bigger effecton nearby home prices than a simple glut of homes for salewould.Typically,after homeowners have been foreclosedupon,they are left with a blemish on their credit history.They may be explicitly prohibited from geting certain typesof mortgages for a number of years by the dominant mort-gage providers or insurers in the market.The Federal Hous-ing Authority (FHA),for example,typically will not lend toa borrower that has been foreclosed upon in the past threeyears.Fannie Mae and Freddie Mac have similar exclusionsexcep","cbCaiajlhHoZeBo8","https://ap.wps.com/l/cbCaiajlhHoZeBo8","pdf",1462387,"English","# The Impact of Foreclosureson the Housing Market\n## Some Evidence on the Size of the Impact\n## Two Paths to Lower Home Prices","[{\"question\":\"Why do foreclosed homes often sell at a discount?\",\"answer\":\"Foreclosed homes are typically sold below comparable prices, potentially because homeowners may neglect maintenance and because lenders may mark properties down to sell faster.\"},{\"question\":\"How do foreclosures affect nearby home prices?\",\"answer\":\"The impact can occur through increased supply of homes for sale and through negative externalities that reduce neighborhood desirability, lowering prices of nearby non-foreclosure properties.\"},{\"question\":\"What determines whether different mitigation approaches are needed?\",\"answer\":\"The text argues that how foreclosures affect housing prices depends on neighborhood characteristics, implying that mitigation strategies should be tailored to local conditions.\"}]","The Impact of Foreclosureson the Housing Market | PDF",1789958990,13]