Foreclosure Ripples: Where Home Prices will Drop Most: A Report

The cost of foreclosed properties hits entire communities. The average home (near a foreclosed property) will lose about $5,000 in value, according to a new study from the Center for Responsible Lending .

American families NOT facing foreclosure will see the value of their homes decline by an estimated $265 billion because of the ripple effect 2.2 million foreclosures would have in diminishing prices of surrounding homes.

A city can lose up to nearly $20,000 a year in lost property taxes and other costs for every property abandoned by foreclosure.

--Center for Responsible Lending

Here’s their state list, which is ranked on the estimated dollar value of home price declines. You can go to the Center’s website and click on: by State & Local Market.

Here's a quick summary from the report.

"Subprime Spillover: Foreclosures Cost Neighbors

• 44.5 million neighboring homes will experience devaluation because of subprime foreclosures that take place nearby.

• Homeowners living near foreclosed properties will see their property values decrease $5,000 on average.

Foreclosure Effect

..................... # Homes devalued...........Drop in House Values/Tax

California.........................8,396,887..............................$67.6 billion

New York........................3,945,030.............................$40.7 billion

Florida ............................4,318,020..............................$23.5 billion

Illinois..............................2,871,480..............................$17.5 billion

New Jersey.....................1,883,257..............................$11.9 billion

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