Estimates of the Size and Source of Price Declines Due to Nearby Foreclosures: Evidence from San Francisco

49 Pages Posted: 30 May 2017

See all articles by Elliot Anenberg

Elliot Anenberg

Board of Governors of the Federal Reserve System

Edward Kung

California State University, Northridge - David Nazarian College of Business and Economics

Date Written: 2012

Abstract

Using a novel dataset which merges real estate listings with real estate transactions in San Francisco from 2007-2009, we present new evidence that foreclosures causally depress nearby home prices. We show that this decrease occurs only after the foreclosed home is listed for sale, which suggests that the effect is due to the additional housing supply created by foreclosure rather than from neglect of the foreclosed property. Consistent with a framework where a foreclosed home simply increases supply, we find that new listings of foreclosed homes and non-foreclosed homes each lower sales prices of homes within 0.1 miles of the listing by 1 percent.

Suggested Citation

Anenberg, Elliot and Kung, Edward, Estimates of the Size and Source of Price Declines Due to Nearby Foreclosures: Evidence from San Francisco (2012). FEDS Working Paper No. 2012-84, Available at SSRN: https://ssrn.com/abstract=2976695

Elliot Anenberg (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Edward Kung

California State University, Northridge - David Nazarian College of Business and Economics ( email )

Northridge, CA 91330
United States

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