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The Impact of Housing Submarkets and Urban Form on the Foreclosure Crisis in U.S. Urban Counties

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  • Indro Ray
  • Subhrajit Guhathakurta

Abstract

In this article, the authors introduce a novel way to define and measure housing submarkets in relation to foreclosures. Instead of the traditional methods of identifying submarkets a priori, this study uses an approach that empirically delineates housing submarkets based on spatial contiguity and housing attributes. The spatial clustering algorithm developed for this study identified submarkets in each of the urban counties. A spatial regression model was then used to assess the impact of submarket structure on foreclosure rates. In addition, the study also incorporates a measure of sprawl in its analysis. It was found that sprawling counties are not more likely to have higher rates of foreclosures compared with average rates. However, the counties with smaller and more fragmented housing submarkets are likely to have lower rates of foreclosures. The results suggest that urban form is less consequential than housing market structure in affecting U.S. housing market dynamics.

Suggested Citation

  • Indro Ray & Subhrajit Guhathakurta, 2015. "The Impact of Housing Submarkets and Urban Form on the Foreclosure Crisis in U.S. Urban Counties," Housing Policy Debate, Taylor & Francis Journals, vol. 25(3), pages 549-573, July.
    • Handle: RePEc:taf:houspd:v:25:y:2015:i:3:p:549-573
    DOI: 10.1080/10511482.2014.971043
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    References listed on IDEAS

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    1. Rothenberg, Jerome & Galster, George C. & Butler, Richard V. & Pitkin, John R., 1991. "The Maze of Urban Housing Markets," University of Chicago Press Economics Books, University of Chicago Press, number 9780226729510, September.
    2. Daniel Immergluck, 2008. "Community response to the foreclosure crisis: thoughts on local interventions," FRB Atlanta Community and Economic Development Discussion Paper 2008-01, Federal Reserve Bank of Atlanta.
    3. Kristin L. Perkins, 2009. "The geography of foreclosure in Contra Costa County, California," Community Development Working Paper 2009-03, Federal Reserve Bank of San Francisco.
    4. Francisca Richter & Youngme Seo, 2011. "Inter-regional home price dynamics through the foreclosure crisis," Working Papers (Old Series) 1119, Federal Reserve Bank of Cleveland.
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