How Foreclosures Hurt Everyone's Home Values - Annotated Bibliography Example

Dizikes, P. (2010). How foreclosures hurt everyone's home values. MIT media relations. Retrieved on October 19th, 2010 from http://web.mit.edu/press/2010/housing-prices.html. Dizikes analyzes a study ‘Forced Sales and Houses Prices’ conducted by Parag, Campbell and Giglio. The study examines how much foreclosures reduce a house’s value as compared to a house going in the market due to a dead owner or an owner declared bankrupt and the negative influence of foreclosures on the houses around them. The researchers concluded that there was a significant negative impact of foreclosure on a house’s value. Moreover, a negative influence was also discovered on the value of foreclosures on the houses around them. This paper is amongst the first to accurately measure the value of nearby property as a result of a foreclosure. The findings of the research should be of great importance to policy-makers and home owners. Immergluck, D. (2009). Foreclosed: high-risk lending, deregulation, and the undermining of America’s mortgage market. Cornell University Press. Retrieved on October 19th, 2010 from http://books.google.co.in/books?id=aBMBQm5mevQC&pg=PA149&dq= foreclosures +affect+a+neighborhood&hl=en&ei=lf2TPPcII3QcdGOwYQO&sa=X&oi= book_result&ct=result&resnum=1&ved=0CDIQ6AEwAA#v=onepage&q&f=false. This book offers an in-depth analysis on foreclosures resulting from the failure of high-risk lending and the newer types of loans-and their associated regulatory infrastructure. He offers a well-documented and engaging account of how the United States built and then, by taking apart protection and ignoring the results of unrestrained complications, destroyed one of the world's most successful and autonomous housing systems. Therefore, along with changes in the mortgage market and failure of policy-makers to regulate the high-risk market, Immergluck emphasizes the effect of foreclosures on neighborhood conditions and property value. He proposes a negative impact not only on the price value of the neighborhood houses but also an influence on the overall community. The book offers principles and recommendations for the policy-makers that encourage reasonably priced and long-lasting homeownership for individuals and communities. Immergluck, D. and Smith, G. (2006). The impact of single-family mortgage foreclosures on neighborhood crimes. Housing Studies, 21(6): 851-866. Retrieved on October 22nd, 2010 from http://www.prism.gatech.edu/~di17/HousingStudies.pdf. The authors examine the effect of foreclosures of single-family mortgages on intensity of vandalism in the neighborhoods. The study suggests that the increased rate of foreclosure has been mainly due to the amplification in the subprime mortgage loans that focuses on lending loans to borrowers with unsatisfactory credit. Most of these are the individuals are the ones who have their properties foreclosed, thus, negatively influencing the neighborhood. Thus, increased foreclosures intensify crime and vandalism in the neighborhoods. Even though, the results are not significantly high but that might be mainly due to the under-reported in vacant and abandoned properties. Thus, the increase in neighborhood crimes is a social and economic cost that must be integrated into policy-making dealing real-estate and mortgage lending policies and regulation. Immergluck, D. and Smith, G. (2005). There goes the neighborhood: the effect of single-family mortgage foreclosures on property values. Woodstock Institute. Retrieved on October 22nd, 2010 from http://www.nw.org/network/neighborworksprogs/foreclosuresolutions/ reports/documents/TGTN_Report.pdf. The article states that foreclosures of single-family homes have been considered a grave risk to the solidity of the neighborhood and health of a community. It suggests that foreclosures especially in low-income neighborhoods can result it empty and abandoned properties. This can ultimately result in increased criminal activity put off social capital formation, and further disinvestment. Thus, foreclosures resulting in such harmful effects would lead to lower property values in the nearby areas, especially in the case residential property. The article claims that increased subprime lending market has lead to foreclosures. Therefore, the policy-makers need to understand the importance of regulation of high-risk mortgage loans and the cost of high-risk loans. Thus, the study recognizes the fact that irresponsible lending not only affects the homeowners and the lenders but the society in general. Leonard, T. and Murdoch, J. C. (2009). The neighborhood effects of foreclosures. Journal of Geographical Systems, 11(4): 317-332. Retrieved on October 22nd, 2010 from http://www.springerlink.com/content/q554x0wq16475688/. The researchers argue that changes in foreclosures disclose changes in the quality of the neighborhood. The researcher asserts that high quality neighborhoods have high prices while low quality neighborhoods along with high foreclosure rates considerable lower the prices. Thus, the authors imply that there is a considerable influence of foreclosures on the quality of the neighborhood it occurs in. The significant decrease in the prices of the nearby houses of a foreclosed property indicates the importance of the neighborhood quality in the eyes of the buyers. The study deals with spatial reliance in housing prices and in the errors. The results reveal that nearby foreclosures gives rise to certain factors that are overcome by reducing the prices of the houses. Lin, Z, Rosenblatt, E and Yao, V. W. (2009). Spillover Effects of Foreclosures on Neighborhood Property Values. Journal of Real Estate Finance and Economics. 38 (4): 1-35. Retrieved on October 19th, 2010 from http://ssrn.com/abstract=1033437. The researchers suggest that the spillover effect of foreclosure on the value of the houses in the neighborhood relies on two aspects; the price cut of the foreclosure and the importance given to the foreclosed property as a source of the valuation. The results of the study reveal that there is a significant impact on the valuation with a certain distance and a time period. But the spillover effect slightly differs when the bias of the selected sample is taken into account. On the other hand, another sample suggests that the spillover effect reduces by half in the years when the economy is flourishing, thus, validating the significance of housing cycles. The findingsof the study are consistent with numerous researches suggesting a harmful impact on the value of the houses nearby a foreclosed property. Marilyn, K. (2010). Foreclosures’ effect on upscale neighborhood? Retrieved on October 19th, 2010 from http://huntingtonhomes.ocregister.com/2010/03/21/how-foreclosure-affects-pricey-home-sales/89585/. The writer exemplifies the effects of foreclosures on upscale neighborhoods by using Huntington Harbor. She seeks a real-estate appraiser who has been evaluating all types of properties including expensive homes for more than 18 years. He suggests that even though, a foreclosed-property does effect other homes in the neighborhood but the law and supply demand is the deciding factor. He refers to the fact that if there is sufficient buyer demand and the properties are quite different from each other then there would not be much influence of foreclosure. But if the demand is not strong enough and the properties are quite similar then there is a chance that the prices will reduce due to increased competition. Thus, sometimes foreclosures sell for a certain percent below the standard sale but the impact is not huge. Miller, N. G., Rauterkus, S. Y. and Sklarz, M. A. (n.d). The neighborhood impact of subprime lending, predatory lending and foreclosure. Retrieved on October 22nd, 2010 from http://www.hoyt.org/subprime/neighborhoodimpact.pdf. The study explores the effect of subprime mortgage, predatory lending and foreclosure in regards to the neighborhoods. The research paper evaluates the existing literature and the current gap in the literature. The study intends to reveal the related gaps in order to facilitate appropriate measures to prevent fall in prices resulting in a huge amount of damage. The study reviews the findings of numerous previous researches and tries to identify the relationship between the housing bubble, aggressive lending and foreclosure in regards to the neighborhoods. Schuetz, J., Been, V. and Ellen, I. G. (2008). Neighborhood effects of concentrated mortgage foreclosures. Accepted for publication in Journal of Housing Economics. Retrieved on October 22nd, 2010 from http://furmancenter.org/files/publications/ foreclosures08-03.pdf. The researchers identify the fact that the increase in the nation’s mortgage crisis has increased the number of communities dealing with reduced housing prices and high rates of foreclosures. The paper suggests that foreclosures not only destroy individuals who are foreclosing their property but also destroy individuals residing in the vicinity by reducing the value of their houses and ultimately decreasing the local governments’ taxes. The study further implies that the housing prices are significantly lower in neighborhoods even before foreclosure which suggests that neighborhoods with lower-priced houses values are more susceptible to increased rate of foreclosures in the future. The study also compare the New York City housing markets with other markets indicating that there was a lesser impact of foreclosures in the New York City as compared to other markets due to high demand. The truth about mortgage.com. (2007). How Do Foreclosures Affect Your Neighborhood? Retrieved on October 19th, 2010 from http://www.thetruthaboutmortgage.com/how-do-foreclosures-affect-your-neighborhood/. The article ascertains that there is a negative impact on the value of the houses in the neighborhood of a foreclosed property. It gives an insight into the impact of several foreclosures in a neighborhood and its effect on the worth of the houses. In certain areas of United States, properties were constructed too quickly and in order to fill-up these properties, banks and mortgage-lenders in America created aggressive mortgage programs of option-arms and other high-risk loans. Due to the housing recession, the homeowners are no longer able to pay-off their loan which has ultimately resulted in either selling the houses or foreclosures. Thus, due to poor current demand and over-supply, multiple foreclosures in a neighborhood can significantly lower the prices of the houses. Bibliography Dizikes, P. (2010). How foreclosures hurt everyone's home values. MIT media relations. Retrieved on October 19th, 2010 from http://web.mit.edu/press/2010/housing-prices.html. Immergluck, D. (2009). Foreclosed: high-risk lending, deregulation, and the undermining of America’s mortgage market. Cornell University Press. Retrieved on October 19th, 2010 from http://books.google.co.in/books?id=aBMBQm5mevQC&pg=PA149&dq= foreclosures +affect+a+neighborhood&hl=en&ei=lf2TPPcII3QcdGOwYQO&sa=X&oi= book_result&ct=result&resnum=1&ved=0CDIQ6AEwAA#v=onepage&q&f=false. Immergluck, D. and Smith, G. (2006). The impact of single-family mortgage foreclosures on neighborhood crimes. Housing Studies, 21(6): 851-866. Retrieved on October 22nd, 2010 from http://www.prism.gatech.edu/~di17/HousingStudies.pdf. Immergluck, D. and Smith, G. (2005). There goes the neighborhood: the effect of single-family mortgage foreclosures on property values. Woodstock Institute. Retrieved on October 22nd, 2010 from http://www.nw.org/network/neighborworksprogs/foreclosuresolutions/ reports/documents/TGTN_Report.pdf. Leonard, T. and Murdoch, J. C. (2009). The neighborhood effects of foreclosures. Journal of Geographical Systems, 11(4): 317-332. Retrieved on October 22nd, 2010 from http://www.springerlink.com/content/q554x0wq16475688/. Lin, Z, Rosenblatt, E and Yao, V. W. (2009). Spillover Effects of Foreclosures on Neighborhood Property Values. Journal of Real Estate Finance and Economics. 38 (4): 1-35. Retrieved on October 19th, 2010 from http://ssrn.com/abstract=1033437. Marilyn, K. (2010). Foreclosures’ effect on upscale neighborhood? Retrieved on October 19th, 2010 from http://huntingtonhomes.ocregister.com/2010/03/21/how-foreclosure-affects-pricey-home-sales/89585/ Miller, N. G., Rauterkus, S. Y. and Sklarz, M. A. (n.d). The neighborhood impact of subprime lending, predatory lending and foreclosure. Retrieved on October 22nd, 2010 from http://www.hoyt.org/subprime/neighborhoodimpact.pdf. Schuetz, J., Been, V. and Ellen, I. G. (2008). Neighborhood effects of concentrated mortgage foreclosures. Accepted for publication in Journal of Housing Economics. Retrieved on October 22nd, 2010 from http://furmancenter.org/files/publications/ foreclosures08-03.pdf. The truth about mortgage.com. (2007). How Do Foreclosures Affect Your Neighborhood? Retrieved on October 19th, 2010 from http://www.thetruthaboutmortgage.com/how-do-foreclosures-affect-your-neighborhood/. Read More