The Impact of REO Sales on Neighborhoods and Their Residents

The Impact of REO Sales on Neighborhoods and Their Residents The foreclosure crisis in the U.S. has resulted in a large number of residential REOs. These properties have been found to reduce the value of nearby homes. An unresolved issue is whether these negative spillover effects disappear after the REO is sold. We hypothesize that these effects are greater if the REO is purchased by an investor in comparison to an owner–occupant. In this paper we report the results from estimating the spillover effects of both current and ex–REOs, where the latter are divided into those possessed by owner–occupants and those possessed by investors. The results lend considerable support to our hypothesis. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

The Impact of REO Sales on Neighborhoods and Their Residents

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Publisher
Springer US
Copyright
Copyright © 2014 by Springer Science+Business Media New York (outside the USA)
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1007/s11146-014-9465-0
Publisher site
See Article on Publisher Site

Abstract

The foreclosure crisis in the U.S. has resulted in a large number of residential REOs. These properties have been found to reduce the value of nearby homes. An unresolved issue is whether these negative spillover effects disappear after the REO is sold. We hypothesize that these effects are greater if the REO is purchased by an investor in comparison to an owner–occupant. In this paper we report the results from estimating the spillover effects of both current and ex–REOs, where the latter are divided into those possessed by owner–occupants and those possessed by investors. The results lend considerable support to our hypothesis.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: May 31, 2014

References

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