Impact of Investors in Distressed Housing Markets

  • Marcus T. Allen
  • Jessica Rutherford
  • Ronald RutherfordEmail author
  • Abdullah Yavas


We examine a recent trend in the market where investors purchase residential properties. We find that investors purchase at a discount of 9.5% compared to individuals purchasing in the same time period and geographic area. More specifically, we find that small investors purchase at a discount of 8.0%, medium investors purchase at a discount of 11.1%, large investors purchase at a discount of 13.6%, and institutional investors purchase at a discount of 7.7%. We also find that the presence of investor buyers in a market helps improve house values. A 10% increase in the percentage of houses purchased by investors in a census block leads to a 0.20% increase in house prices.


Investors Distressed markets Housing prices Externalities 


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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  • Marcus T. Allen
    • 1
  • Jessica Rutherford
    • 2
  • Ronald Rutherford
    • 3
    Email author
  • Abdullah Yavas
    • 4
  1. 1.Alico Eminent Scholar, Department of Economics & Finance, Lutgert College of BusinessFlorida Gulf Coast UniversityFort MyersUSA
  2. 2.Department of FinanceUniversity of South FloridaTampaUSA
  3. 3.Bank of America Endowed Professorship, College of Business, Finance Department, University of South FloridaUniversity of South FloridaTampaUSA
  4. 4.Robert E Wangard Chair, School of BusinessUniversity of Wisconsin – MadisonMadisonUSA

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