(Phot0 by Jeff Turner via Flickr)
The continuous decline of the housing market is spurring the increase of bargain prices for potential buyers and investors, according to the St. Louis Post-Dispatch.
William Rogers, associate professor of economics at a University of Missouri–St. Louis, studies the local housing marketing. Rogers was quoted May 24 in the Post-Dispatch story “Hitting rock bottom: Housing crash spawns dirt cheap sales.”
Rogers said foreclosures average 25 to 30 percent below the price of owner-sold houses in St. Louis. The discount varies by neighborhoods from deep discounts to near-market value.
But he notes the issues go beyond profit and can cause a drastic impact on the neighborhood.
Each foreclosed home shaves 1 percent off the value of all homes within an eighth of a mile. The effect is cumulative; two foreclosures trim prices by 2 percent, and so on. And lower values reduce homeowners’ ability to borrow on their equity in order to fix up their properties.
Rogers is an expert in regional economics, urban economics and public economics. His current research focuses on the impact homeowner associations have on the housing market and the effects public homeownership programs have on neighborhood development.
