Estimating the House Foreclosure Discount Corrected for Spatial Price Interdependence and Endogeneity of Marketing Time

@inproceedings{Clauretie2009EstimatingTH,
  title={Estimating the House Foreclosure Discount Corrected for Spatial Price Interdependence and Endogeneity of Marketing Time},
  author={Terrence M. Clauretie and Nasser Daneshvary},
  year={2009}
}
  • Terrence M. Clauretie, Nasser Daneshvary
  • Published 2009
Most previous empirical research estimates a greater than 20% discount associated with the sale of foreclosed properties. Under the assumption that the real estate market is somewhat efficient, such a large discount would be counterintuitive. We argue, and empirically show, that the estimated foreclosure coefficients in most of the previous research are upward biased because they do not control for variables such as the physical condition of the property and the relationship between marketing… CONTINUE READING
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