Published: November 13, 2007
In our December 2006 study, “Losing Ground,” CRL predicted that millions of American households would lose their homes to foreclosures in the subprime mortgage market. “Losing Ground” focused on the direct impact of subprime foreclosures, but it did not attempt to quantify how those foreclosures would affect neighboring homes and larger communities. In other words, it did not address the “spillover” effect where foreclosures themselves would further depress local housing prices. In this report, we estimate how many homes—including families who are paying their mortgage on time—will suffer a decline in property values because of foreclosures in their neighborhoods. We also estimate the monetary value of these losses in terms of lower property value and a reduced tax base for communities.
Impact of Subprime Foreclosures on Neighboring Homes and Local Tax Bases
Statistics cover only those counties located in Metropolitan Statistical Areas, which generally represent core urban areas with populations of 50,000+ and adjacent communities. See "Subprime Spillover" report for further details.