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Here is a brand-new rule of thumb on foreclosures, courtesy of two professors from Harvard and one from MIT:
“A foreclosure at a distance of 0.05 miles lowers the price of a house by about 1%.”
I changed 0.05 miles to 88 yards for the headline. A fast running back can cover 88 yards in about 10 seconds—but the damage to your property’s value from a nearby foreclosure probably takes even less time.
The study is based on 20 years of data from Massachusetts, which suffered a foreclosure wave in the early 1990s. For details, click on Forced Sales and House Prices, by John Campbell, Stefano Giglio, and Parag Pathak.
Hat tip to Ira Artman at Seeking Alpha, who wrote The Foreclosure Zombies of Mass Destruction.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.