Open AccessInternational Real Estate Review
Author(s) -
Stephanie Yates Rauterkus,
Norman G. Miller,
Grant Ian Thrall,
Michael Sklarz
Publication year - 2012
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100159
Subject(s) - foreclosure , zip code , real estate , point (geometry) , business , discounting , economics , econometrics , actuarial science , finance , demographic economics , mathematics , geometry
We examine the real estate owned (REO) discount by using ZIP code-level data on foreclosure rates, distressed and non- distressed sales in Chicago, Illinois. We find significant differences in price between distressed and non-distressed properties in high- versus low-foreclosure rate neighborhoods. We expand this analysis to determine if trends in the REO discount can be explained by trends in foreclosure rates and if this correlation can be used to identify a ¡¥tipping point¡¦ in foreclosure rates. We identify key relationships between trends in the REO discount, the proportion of REO sales to total sales, and sales volume.