Stigmatized properties and housing values: an exploratory study
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Stigmatized properties and housing values: an exploratory study David Chapman1 · Marty Ludlum1 · Ramachandran Vijayan2 · Weichu Xu3 · Burle Steelman1 · Dan Range4 · Deependra Dehariya1 Received: 12 August 2018 / Accepted: 27 March 2019 © Springer Nature B.V. 2019
Abstract The purpose of this research is to provide an understanding of the potential effects that stigmatized properties may have for potential house purchasers’ decision making, as well as how a purchasers’ willingness to pay might be impacted. The originality of this research emerges from the distinct lack of empirical evidence in the current literature base with only one such study having investigated this phenomena in the past. Most research that has investigated aspects of stigmatization, have focused on the analysis of transaction prices from a quantitative perspective, with limited scholarly attention paid towards the psychological factors that may effect a purchasers willingness to purchase a property, their willingness to pay for a stigmatized property, as well as understanding if real estate agents should fully disclose stigmatization to prospective buyers. The study employed a qualitative survey that was designed to answer these fundamental gaps in the literature base, through a sample of 410 individuals. The results demonstrated that while some ambivalence existed, there was general consensus that such properties would incur a reduction in price, and would impact upon the selling potential of the property, if such stigmas were fully disclosed. Keywords Stigmatized properties · Buyer behavior · House prices · Willingness to pay
1 Introduction The current real estate knowledge base pays significant attention to the role of amenities in understanding residential property values. These studies have focused on analyzing the impact of a diverse range of externalities and whether positive or negative effects have occurred. From a negative perspective, research has explored issues such as air quality and * David Chapman [email protected] 1
University of Central Oklahoma, Edmond, USA
2
Oklahoma City Community College, Oklahoma, USA
3
East Stroudsburg U. of Pennsylvania, Stroudsburg, USA
4
Coventry University, Coventry, UK
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pollution (Simons et al. 2015; and Freybote and Fruits 2015), land contamination (Wisinger 2014; Epley 2012; Simmons and Saginor 2006; Aalberts and Hoyt 2000; and Thomas 2002), crime (La Roche et al. 2014; Komuves 1997), underground storage tanks (Simons et al. 1997), pipelines (McElveen et al. 2017), wind turbines (Hoen and Atkinson-Palombo 2016 and Hoen et al. 2011), fracking (Throupe et al. 2013), foreclosures (PenningtonCross 2006), and power lines (Ukpevbo and Egbenta 2016; Seiler 2014; and Francois 2002). Other research has examined the positive impact of externalities on property values, including amenities such as ocean views (Wyman and Worzala 2016; Mothorpe and Wyman 2017), open space and parks (McCord et al. 2014; Anderson and West 2006; Irwin 2002), school qua
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