What is the effect of neighborhood foreclosures on your Knoxville real estate value? Coming out of the harshest national housing downturn many homeowners have seen, we have all heard about the multitude of foreclosures that have taken place all across the United States. Knoxville real estate, while not hit as bad as many areas in the U.S., was not completely immune. Many families have been impacted directly by the loss of their home and the severe financial consequences that are introduced through the loss of what typically is their largest investment. These losses including but not limited to the extreme downgrading of their credit, loss of savings and retirement, and physical eviction.
But are there consequences to those families who live near those foreclosures? You might think yes, of course if there are large quantities of homes being foreclosed in the same neighborhood then there will no doubt be loss of tax revenue and the surrounding homeowners or homeowners association will incur costs to remedy those visible maintenance issues that so often go hand in hand with abandoned/foreclosed properties.
However, for this discussion we are most interested in the effect on homeowners living in close proximity to a Knoxville foreclosure and their ultimate loss through a depreciation in the value of their home. Researchers from the Center for Responsible Lending produced a report on this home depreciation caused by nearby foreclosures. Using data from the federal government as well as Lender Processing Services, they were able to calculate the loss in value of homes within a 1/8 of a mile proximity to a foreclosed home.
Their findings show that in all neighborhoods, the loss in value of homes within the 1/8 mile proximity equals 7.2 percent.
As we tell our clients daily, there are many factors that effect your home’s value. You must be sure to take them all into consideration when you are looking at Knoxville homes for sale or selling any Knoxville real estate.