What impact does that nearby foreclosure have on your home's value? I am asked this question all the time by anxious homeowners, and it has always been hard to give a reliable answer. But now we finally have some good research on this, courtesy of the Cleveland Fed. According to this paper by Daniel Hartley, a nearby foreclosure will decrease a home's value by between 1.6% and 2% depending upon the specific situation.
Effect of Foreclosures on Nearby Housing Prices