Understanding Distressed Residential Transaction Discounts Across Price Segments and Market Conditions. Issue 1 (1st January 2020)

• Record Type: Journal Article
• Authors: Aroul, Ramya Rajajagadeesan; Hansz, J. Andrew; Rodriguez, Mauricio
• Is Part Of: Journal of real estate research. Volume 42:Issue 1(2020)
• Page Start: 151
• Page End: 182
• Publication Date: 2020-01-01
• Subjects: foreclosure -- short sale -- price segments -- market conditions -- hedonic pricing model; Real estate business -- United States -- Periodicals; Real estate investment -- United States -- Periodicals; Real estate business -- Periodicals; Periodicals; 333.330973
• DOI: 10.22300/0896-5803.42.1.151
• Languages: English
• ISSNs: 0896-5803

Abstract

Abstract : In the literature, there is a wide range of discounts associated with foreclosures. Comparisons across studies are difficult as they use different methodologies across large areas over different time periods. We employ a consistent methodology across space and time. We find modest discounts, within the range of typical transaction costs, in all but the highest priced market segment. Higher priced segments could explain prior findings of substantial discounts. We find that discounts are time-varying, with discounts increasing with market distress. A one-size-fits-all approach is not appropriate when estimating distressed transaction discounts across large market areas or under changing market conditions.