A recent study by a MIT economist and 2 Harvard researchers concluded that a foreclosure reduces that home's value by an average of 27%. " In the study, “Forced Sales and House Prices,” which will be published in the American Economic Review, Pathak, Campbell and Giglio examined 1.8 million home sales in Massachusetts from 1987 to 2009. By looking in granular detail at real-estate prices, the researchers have concluded that a foreclosure reduces the value of a house by 27 percent, on average."
So, if my neighbor's house is foreclosing, will this affect the value of my house?
YES, The study concluded that a foreclosure reduces the surrounding home's values by an average of 9%. A bankruptcy in a neighborhood reduces the surrounding home's value by an average of 3%.
Short sales, a transaction in which the property can avoid becoming vacant, is increasingly sought after as a solution not only for homeowners facing foreclosure, but lenders looking to recoup more of their investment.
Interested in a Short Sale? Call me at 623-694-0354.
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