Download or read book Spatial Impacts of Micro Neighborhood Environments on Residential Real Estate Resale Values written by Wonseok Seo and published by . This book was released on 2008 with total page 217 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This study contributes to the hedonic pricing literature in housing. Despite the large number of such studies and the broad range of variables examined, prior studies have not systematically considered the impact on housing prices of the physical condition of their immediate neighborhood. Most likely this failure is attributable to the fact that such data do not exist in published form. Most hedonic studies base their analysis on published data or data easily derived from satellite images. Few studies make use of data collected in the field. Yet both theory and casual observation suggest that the physical condition of neighboring houses should contribute to explaining housing prices. The size of this impact is important also as it plays a role in the theory of neighborhood change, which attributes the downward slide of neighborhoods to the initial deterioration of a few houses, which through their negative externalities start a broader trend. This study set out to show that physical disorder matters in explaining property prices and to derive estimates of the order of magnitude of the impact of disorder on sales prices. While physical disorder is a prominent part of the literature on fear of crime and neighborhood change, it so far has been neglected in hedonic pricing studies. This study has addressed this deficiency. The hedonic analysis confirms the importance of physical disorder in explaining housing values and derives the impact on price of individual disorder characteristics. This study also shows that the presence of neighborhood disorder significantly reduces the final sales price of a property, relative to the original listing price. The contribution of current finding is that this decline is not fully anticipated by the realtor's listing price. This analysis therefore shows the importance of any information on disorder when estimating the listing price. Finally, the study shows the cost that neighbors can inflict on each other, by not maintaining their houses and neighborhood. For the first time, it provides specific estimates of the cost associated with individual disorder attributes. The results also are indicative of the importance externalities play in explaining neighborhood change.