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The high price of foreclosures
Posted By katie allison granju
In my own Knoxville neighborhood, it seemed houses were selling like hotcakes only 18 months ago. Now they sit unsold for months. And today we noticed an auction sign in front of a house that’s been for sale on our street for more than a year. A mortgage broker friend tells me that likely means foreclosure is near or in the works for the owner.
So this info Les Jones quotes from The Atlantic on the ripple effect of foreclosures on entire neighborhoods wasn’t welcome news:
Not least, the crisis is harming the neighbors of people in foreclosure, even those who aren’t having trouble making loan payments. According to one academic study, every foreclosure reduces the value of all other houses within an eighth of a mile by about 1 percent, as the sight of vacant property scares off potential buyers. Combine that with a market already in decline, and neighborhoods that begin to have troubles can go off the cliff. On the street pictured, three houses not in foreclosure have been languishing on the market for 72, 97, and 149 days; asking prices along the cul-de-sac vary widely, but average about $40,000 less than the comparable prices in the first two quarters of the year.
Jan 10th, 2008
