Shadow Inventory: Holding Down Home Values in Multiple Ways

This article identifies three ways in which shadow inventory hurts home prices and retards economic recovery. Shadow inventory creates gloom about future supply/demand imbalance, it destroys value directly through maintenance failure, and it harms neighboring home values through the broken window ef...

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Veröffentlicht in:Cityscape (Washington, D.C.) D.C.), 2012-01, Vol.14 (1), p.179-181
Hauptverfasser: Rosenblatt, Eric, Yao, Vincent
Format: Artikel
Sprache:eng
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Zusammenfassung:This article identifies three ways in which shadow inventory hurts home prices and retards economic recovery. Shadow inventory creates gloom about future supply/demand imbalance, it destroys value directly through maintenance failure, and it harms neighboring home values through the broken window effect. Other avenues of adverse effect likely exist, however, such as economic uncertainty and complexity in urban planning. Endogeneity effects, such as falling prices from contagion causing an increase in foreclosures, surely exist. Shadow inventory plays a pernicious role in the housing and economic recessions, and delays in resolution do not mitigate its effects.
ISSN:1936-007X
1939-1935