How do foreclosures affect property values?

Thanks for the info....also nice to see different perspectives and stats...thanks!

I imagine that these stats will differ from state to state. I think it also makes good sense as a homeowner to do what you can to keep the neighborhood up by volunteering to maintain the outside.

Foreclosed properties are often poorly maintained, and the decline is very mcuh related to the condition of the properties' neighborhood. But what's interesting from that study is the degree of decline of values. Thanks for sharing.

Jane Pacheco

I don't buy it.  MIT and Harvard researchers?  Please.  If the study was conducted by researchers from The University of Oklahoma, the results might be better received.

i'm kidding...  : )

Beautification projects for home owner associations might help.  Like they say, one rotten apple spoils the bunch.

Thanks for the post and congrats on the feature!!

Linda, great post. Love the statistics.

Thanks

It is sad, when you spot a house on the block that's vacant an in foreclosure. People are loosing faith and loosing homes. Hope things turn around soon!

Linda- Another great reason that I am grateful to live in Wellington. The code compliance department is very strict. They will order the lawns to be mowed and keep the bushes trimmed and place a lien on the property for doing that service. They won't even let a bank foreclose without all violations to be paid for. That is one reason why banks don't actually go through with foreclosing on homes here, they don't want to keep them up and obey the rules of the Village of Wellington. Katerina

BTW- Congrats on your featured post. That gold star looks good on you:) 

Interesting study Linda.... However... there are so many variables creating foreclosures today that I don't think a foreclosure in the neighborhood has the effect on value that it would have had back in 2000.

Foreclosures for the past three years were created from overleveraging... and artificially high prices created by cheap and lax lending standards.

Personally... I'd like to see a study on how Stated Income loans and low to no down payment loans raised values in a neighborhood to get a better grasp of how artificial values became. Maybe then the Govt. would not waste a Trillion plus of borrowed money or keep creating failing programs that are only causing more confusion.... and only delaying the inevitable.

Thanks for sharing this interesting study, Linda. I'll have to take a look at the Las Vegas numbers and see how close they are to these findings.

Great post Linda.  Interesting to see real numbers to relate.  I'm actually suprised those death numbers aren't higher. 

Linda,

Of course foreclosures affect values all over. I have a post coming on this tonight.

Good post thanks for getting it out to us today.

Very interesting stats linda.  I just listed 2 foreclosure homes in a 3 year old subdivision today.

The statistics you shared are interesting.  In Dallas, appraisers are doing a better job of assessing values. Generally, they try to find properties that are true comps based on condition and amenities, and do not compare foreclosure properties to owner occupied homes in good condition.

I had heard numbers that said the effect on value was closer to 9% for a single foreclosure in a neighborhood.

In my little marketplace up here in Alberta Canada we have largely escaped the foreclosure crisis without being to adversely affected.  We have seen more bank sale properties than ever before in our history, but still probably less than 1% of the total inventory.  This is definitely a topic I should blog about on myactive rain lethbridge homes for sale blog,

Robert May

I've been told by Appraisers in my area that Foreclosed Properties are being used in thier appraisal process since they are more of the norm nowadays.  In the past foreclosed properties were excluded.  This is not good for those who are watching their property values drop.