Working Paper

The value of foreclosed property


Abstract: This paper examines the expected price appreciation of distressed property and compares it to the prevailing metropolitan area appreciation rate. The results show that the simple fact that the property is foreclosed indicates that it will be sold at a substantial discount (appreciate less than expected). The magnitude of the discount is sensitive to loan characteristics, legal restrictions, housing market conditions, and the bargaining position of the selling institution.

Keywords: Real property;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2004

Number: 2004-022