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作者

来源

来源 JOURNAL OF URBAN ECONOMICS,Vol.87,P.42-56

语言

英文

关键字

Foreclosure;Mortgage;Externalities

作者单位

Federal Reserve Bank of Atlanta, Research Department, 1000 Peachtree Street N.E., Atlanta, GA 30309, USA;Fannie Mae, USA;Federal Reserve Bank of Boston, Research Department, 600 Atlantic Avenue, Boston, MA 02210, USA;Federal Reserve Bank of Atlanta, Research Department, 1000 Peachtree Street N.E., Atlanta, GA 30309, USA;Fannie Mae, USA;Federal Reserve Bank of Boston, Research Department, 600 Atlantic Avenue, Boston, MA 02210, USA

摘要

Policy makers have used externalities to justify government intervention in the foreclosure process. Using a new dataset that covers 15 of the largest metropolitan statistical areas in the U.S. and a novel identification strategy, this paper provides new evidence on the size and source of these externalities. Our results show that a property in distress affects the value of neighboring properties from the time when the borrower becomes seriously delinquent on the mortgage until well after the bank sells the property to a new owner. Properties with seriously delinquent loans within 0.1 miles are found to decrease transaction prices of non-distressed properties by approximately one percent on average. The spillovers are found to dissipate rapidly with distance and completely disappear one year after the bank sells the property to a new homeowner. Importantly, we find that the size of the externality is sensitive to the condition of foreclosed properties, as bank-owned properties in poor condition lower nearby transaction prices by 2.6% on average while those in good condition marginally raise prices. We argue that the measured price spillovers are physical externalities caused by a lack of property maintenance and not pecuniary externalities that reflect local supply or demand shocks.