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Working Paper 13-1: Distressed Sales and the FHFA House Price Index

Published: 8/12/2013
Author:

​​​William M. Doerner, Senior Economist; Andrew Leventis, Principal Economist

Trends in residential house values can be expressed by changes in House Price Indexes (HPIs). HPIs are based on observed prices and help guide real estate activities. Since the recent housing crash, distressed sales have increased in numbers and have led to concerns about their effects on market valuations. This paper explores the extent to which distressed sales can be identified in transactions data and how they affect HPIs.

A revised version of this paper has been published as the lead article in the Journal of Housing Research (Volume 24, Issue 2, pp. 127-146) and can be accessed at http://aresjournals.org/doi/abs/10.5555/1052-7001.24.2.127​.  The results were discussed by a variety of sources like the Wall Street Journal blog, Appraisal Institute, HousingWire, Mortgage Bankers Association, Mortgage News Daily, and Mortgage Orb.

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