Spahr and Sunderman Receive Best Paper Award

For release:  December 4, 2014

Dr. Ronald Spahr, professor of Finance, and Dr. Mark Sunderman, Chair of Excellence and professor of Finance, received the Best Paper Award by the American Real Estate Academy in the category of “Real Estate Valuation” for their paper entitled, “The Impact of Default and Foreclosure on Housing Values.” The award was sponsored by the Appraisal Institute. The paper was co-authored by doctoral students Ying Huang, a former Fogelman Finance student currently attending the University of Manitoba, and Esra Ozdenerol, from the Department of Earth Sciences at the University of Memphis.

In this article, foreclosure spillover effects on residential sales from Shelby County, TN for 2001- 2012 were examined. Previously defined neighborhood boundaries were used. Spatial, temporal and locational effects over the recent housing market cycle were taken into account using hedonic models to control for property characteristics, neighborhood and time of sale fixed effects finding distinct locational, shape and demographic differences among neighborhoods. Significant non-linear negative convex impacts between foreclosure rates and housing values were found. Neighborhoods with high chronic foreclosure rates resulted in the highest negative price impacts while those with shorter, acute foreclosure rates had much lower price impacts.