Neighborhoods in the Wake of the Debacle: Intrametropolitan Patterns of Foreclosed Properties
47 Pages Posted: 10 Jan 2010 Last revised: 14 Jan 2010
Date Written: December 1, 2009
The problem of growing numbers of foreclosed, vacant homes in U.S. neighborhoods during the mortgage crisis rose on the national policy agenda during 2007 and 2008. This paper describes the intrametropolitan accumulation of foreclosed homes (often referred to as “REO” properties) at the depths of the crisis in late 2008. After describing city and suburban patterns of REO across different types of metropolitan areas, a model of REO accumulation from late 2006 to late 2008 at the zip code level is estimated. In addition to declining housing values and increasing unemployment, a variety of other factors are found to be associated with increasing REO, especially the origination of high-cost mortgages during the subprime boom. Other factors include poverty rate, the median age of the housing stock, central city location, and state foreclosure processes. After controlling for these other factors, the proportions of a zip code’s population that are black or Hispanic are found to be negatively associated with REO growth, although only the relationship with proportion Hispanic is found to be statistically significant.
Keywords: foreclosures, foreclosed properties, subprime crisis, mortgage crisis
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