In my back yard: Neighbourhood spillovers in mortgage foreclosure
Heavily depressed housing prices and high contemporaneous rates of foreclosure have been observed in many low-income and minority neighbourhoods in US cities, suggesting foreclosures may have spillover effects within neighbourhoods. This column demonstrates that foreclosures affect the price of nearby homes and the risk of foreclosure on those homes. While our understanding of the aggregate impact of these spillovers is still limited, recent evidence suggests that it could be large.
Weiran Huang, Ashlyn Aiko Nelson, and Stephen Ross
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