Sales of Distressed Residential Property: What Have We Learned from Recent Research?

Cohen, Jeffrey P.; Coughlin, Cletus C.; Yao, Vincent

doi:10.20955/r.2016.159-188

Cited by 11 publications

(8 citation statements)

References 44 publications

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“…We then compute a variable based on the number of foreclosed homes simultaneously on the market within a 0.1 mile radius of each MLS listing in our sample. The choice of 0.1 mile radius follows much of the literature (Cohen, Coughlin and Yao 2016), although when we vary this to a 0.25 mile radius the results are similar, albeit diminished in magnitude.…”

Section: Datamentioning

confidence: 68%

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Foreclosure Externalities and Home Liquidity

Bian

Brastow

Waller³

et al. 2019

Real Estate Economics

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We study the external impact of foreclosures, exploring how foreclosed properties affect the liquidity of nearby homes. Empirically, we find a foreclosure increases a nearby home's time‐on‐market by approximately 30% on average, which is primarily driven by a disamenity effect. There is evidence that this delay comes from surprises or information shocks to nearby sellers, as foreclosures that come on and/or leave the market after a nearby home's listing date have the largest adverse liquidity effects. However, when there is no surprise and a nearby foreclosure remains through the entire marketing period, sellers discount list prices more steeply, effectively counteracting these liquidity effects. The results suggest that information, pricing and expectations play key roles in how this externality is absorbed by the real estate market.

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Section: Datamentioning

confidence: 68%

“…A recent survey by Cohen, Coughlin and Yao (2016) provides an exhaustive review of the growing foreclosure externality literature, summarizing numerous papers that examine price spillover effects. Generalizing across studies, the authors conclude that the price spillover effect is often less than 2% for houses nearest to foreclosures.…”

Section: Introductionmentioning

confidence: 99%

Foreclosure Externalities and Home Liquidity

Bian

Brastow

Waller³

et al. 2019

Real Estate Economics

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“…All of the studies suggest that the presence of foreclosures, the number of foreclosures, the distance of these foreclosures, and the length or stage of the foreclosure process has an effect on the amount of price impact on neighboring properties even if the reasons for it are not fully understood. (For a summary of some of the recent studies on foreclosure price impacts see Cohen, Coughlin, & Yao, 2016;Fout et al, 2017. ) Even though many studies have investigated the relationship between foreclosed properties and the contagion effect, very few have focused only on abandoned properties.…”

Section: Literature Reviewmentioning

confidence: 99%

What to do with vacant and abandoned residential structures? The effects of teardowns and rehabilitations on nearby properties

Hofe¹,

Parent

Grabill³

2018

Journal of Regional Science

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In the presented paper, we estimate the impacts of three distinct housing policy interventions to deal with distressed and abandoned residential properties: leaving vacant buildings in their current state, remodeling/rebuilding residential structures, and razing vacant structures. We show that vacant structures negatively impact nearby housing up to 4.1%, but when demolition is followed by complete reconstruction, neighboring housing can be appreciated by as much as 14.1%. In addition, negative spillover effects from foreclosures and vacant buildings are primarily observed in low‐income and middle‐income Census tracts, whereas positive spillover effects generated by remodeling are seen in high‐income Census tracts.

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“…7 Especially when demand declines, 5 For a summary of housing price developments during the financial crisis, see Cohen, Coughlin, and Lopez (2012). For a literature review focused on foreclosures and sales of distressed properties, see Cohen, Coughlin, and Yao (2016). 6 This is a strong assumption that causes vacancies and the associated vacancy rate to remain unchanged.…”

Section: Housing Vacancy: Background Literaturementioning

confidence: 99%

Interregional Migration and Housing Vacancy: Theory and Empirics

Coughlin

Cohen

Crews

2018

Self Cite

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We examine homeowner vacancy rate interdependencies over time and space through the channel of migration. Our theoretical analysis extends the Wheaton (1990) search and matching model for housing by incorporating interregional spillovers due to some households' desires to migrate between regions and by allowing for regime-switching behavior. Our empirical analysis of vacancy rates for the entire U.S. and for Census regions provides visual evidence for the possibility of regime-switching behavior. We explicitly test our model by estimating basic Vector Autoregression (VAR) and Markov-Switching Vector Autoregression (MS-VAR) models using data on all four Census regions' vacancy rates and migration dynamics among regions. Our preferred models accurately predict vacancy rates across our sample period. This regime switching approach provides unique insights for housing market and migration dynamics during the financial crisis period and its aftermath. For example, the Northeast returned to its low-vacancy state relatively quickly, while the South has remained in its highvacancy state. Our theoretical model indicates the anticipated sign of the relationship between vacancy rates and migration measures and also the possibility of interdependencies across regions. Empirical results differ across regions. For example, comparing regions, the West is the least connected. Also, the South and Midwest are the regions that show significant evidence of higher vacancy rates when residents in other regions do not desire to migrate.

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Sales of Distressed Residential Property: What Have We Learned from Recent Research?

Cited by 11 publications

References 44 publications

Foreclosure Externalities and Home Liquidity

Foreclosure Externalities and Home Liquidity

What to do with vacant and abandoned residential structures? The effects of teardowns and rehabilitations on nearby properties

Interregional Migration and Housing Vacancy: Theory and Empirics

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