Foreclosure Externalities: Some New Evidence

Kristopher Gerardi, Eric Rosenblatt, Paul S.
Willen, and Vincent W. Yao. Working Paper 2012-11
(August). Although all distressed properties have
negative effects on nearby properties’ values,
the authors find that the magnitude of the
effects are economically small, peak prior to the
property’s completion of the foreclosure process,
and go to zero about a year after a new owner
buys the property from the bank.

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