Essays in real estate finance and housing economics
Abstract/Contents
- Abstract
- This thesis provides three essays applied to the literature of real estate finance and housing economics. Chapter one documents the imbalance of U.S. foreclosure sales with respect to recourse laws on primary mortgages. Using geographic state borders as a sharp discontinuity design, and individual housing transaction data located close to state borders, I show that the average relative volume of foreclosure sales (with respect to regular sales) was 13 percentage points lower in recourse states from 2008 to 2010. Such gap disappears in the years prior to 2008, and after 2010. Further evidence from a hedonic pricing model suggests that foreclosures in non-recourse states were sold at a larger discount after 2008 (6 percentage points from 2008 to 2010 and 9 percentage points from 2011 to 2012). Such result on housing prices is likely due to a supply shock on foreclosures induced by less restrictive recourse laws. Results are robust to differences in borrower characteristics at the loan origination, differences in model specification, and sample selection. Chapter two (based on a paper co-authored with Marco Giacolletti, a Finance PhD Candidate from the Stanford Graduate School of Business)investigates the behavior and performance of asset dealers acting as middlemen in housing markets. We use a unique dataset covering house sales and remodeling jobs in the main urban areas of California from 1998 to 2012. On average, dealers extracted substantial economic rents. Nevertheless, dispersion in the performance of single transactions is large. Since most middlemen are involved in only a small amount of trades at a time, transaction-level risk is relevant. Despite positive average economic rents, asset dealers intermediate a smaller fraction of trades in housing markets than in other decentralized market. The magnitude of transaction-level risk may help explain this fact. Chapter three assesses impact of the Neighborhood Stabilization Program (NSP), a federal program designed to convert foreclosed properties into renovated affordable housing through public investment. To identify the impact, I exploit a discontinuity in how neighborhoods were selected with respect to a critical threshold. The program caused non-foreclosure housing prices in targeted neighborhoods to appreciate 6.5\% between 2009 and 2011. These pricing gains remained stable through the end of my sample in 2014. Furthermore, the program caused changes in neither the supply of foreclosures nor neighborhood income. This suggests quality improvement externalities were behind the price appreciation. Lastly, low market liquidity and asymmetric information in targeted neighborhoods may justify the NSP public initiative, despite foreclosure resale profitability after 2009.
Description
| Type of resource | text |
|---|---|
| Form | electronic; electronic resource; remote |
| Extent | 1 online resource. |
| Publication date | 2017 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Associated with | Westrupp, Victor |
|---|---|
| Associated with | Stanford University, Graduate School of Business. |
| Primary advisor | Binsbergen, Jules H. van |
| Primary advisor | McQuade, Tim |
| Thesis advisor | Binsbergen, Jules H. van |
| Thesis advisor | McQuade, Tim |
| Thesis advisor | Grenadier, Steven R |
| Thesis advisor | Lustig, Hanno |
| Advisor | Grenadier, Steven R |
| Advisor | Lustig, Hanno |
Subjects
| Genre | Theses |
|---|
Bibliographic information
| Statement of responsibility | Victor Westrupp. |
|---|---|
| Note | Submitted to the Graduate School of Business. |
| Thesis | Thesis (Ph.D.)--Stanford University, 2017. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2017 by Victor Westrupp
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
Also listed in
Loading usage metrics...