The Rise of Residential Foreclosure in Fairfax County: An Analysis of Price-Depressing Effects on Property Values within Subdivisions
Date
2010-05-11T14:57:39Z
Authors
Workman, Krystal N.
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The American dream of home ownership has turned into an American nightmare for many regions of the country. As housing prices and sales took a downturn beginning mid-2006, many Americans owed more than their homes were worth. This event marked the beginning of a wave of foreclosures in numbers never seen before that has continued through 2009. A handful of studies address the potential risk foreclosures cause to neighborhood and community stability. One such effect foreclosures have on the community can be attributed to declining neighborhood property values. Through a regression method applied to three housing models that controls for location, property and subdivision characteristics, this thesis quantifies the price-depressing effect of residential foreclosures in Fairfax County, Virginia for single-family homes, townhomes, and condominiums. Final results of the regression analysis estimate that the effect of a 1% increase in residential foreclosure in a subdivision decreases property values by 6.26% among condominiums, 2.02% among single-family homes, and 1.19% among townhomes. Across Fairfax County, the estimated total fiscal impact of foreclosures on residential property values is $2.3 billion, resulting in an estimated property tax revenue loss of $22 million.
Description
Keywords
Foreclosure, Residential properties, Property values, Housing subdivisions