September 26, 2016

Home Owners Near Foreclosures Feel Big Loss Too

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Home Owners Near Foreclosures Feel Big Loss Too

Home owners living near a foreclosed property have faced about $2 trillion in losses to property values, according to a new report by the Center for Responsible Lending, which analyzed the impact of foreclosures on properties within one-eighth mile of a home in foreclosure.

“Communities with high concentrations of foreclosures lose tax revenue and incur the financial and  non-financial costs of abandoned properties and neighborhood blight, while home owners living in close proximity to foreclosures suffer loss of wealth through depreciated home values,” according to the report. 

Home owners who live near a foreclosed property have lost, or stand to lose, about 7.2 percent — or $21,077, on average — of their home's value, according to the report. In minority neighborhoods, the loss was found to be even greater: Home owners living near foreclosures lost 13.1 percent of their home value, or $37,084 on average. 

Source: “Foreclosure Fallout Cost Nearby Home Owners $2 Trillion,” NBC News (Oct. 24, 2012)