When determining property values, appraisers take several factors into account. One of those factors is recent sales price of comparable houses in your neighborhood. It used to be standard practice to exclude foreclosure sales from these "comps". However, since the foreclosure crisis, foreclosure prices - and the downward pressure they are exerting on the marketplace - cannot be ignored. When foreclosures were an anomaly, their statistical value could be ignored, but in the current market, they are having a real effect on the value of non-foreclosed property. A new report from the Center for Responsible Lending has put a number on that effect. They are estimating that the current foreclosure crises has reduced home value for non-foreclosure houses by a total of two trillion dollars.
via Housing Wire
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