Published:
01/15/2004
Attachments:
Working Paper 04-1
Author(s): Anthony Pennington-Cross, Senior Economist
Abstract: This paper estimates the discount at which foreclosed properties sell relative to the market price or average price as reflected in housing indices such as the repeat sales 3 housing price indices. Repeat sales indices focus on the average growth of prices holding quality constant. In addition, this paper discusses how to bridge the gap between the average price for a cohort of properties and the price for foreclosed properties. Beyond the impact of legal costs, this paper looks for evidence that borrower and loan characteristics provide information on the value of foreclosed property.