Not alone

In an Atlantic Article Matthew Yglesias makes some pretty compelling statements, especially as they relate to the externalities. He quotes an "academic study" (Most likely one by the the Woodstock Institute, There Goes the Neighborhood: The Effect of Single-Family Mortgage Foreclosures on Property Values) which suggests that property values decline by 0.9% to 1.136% for houses within one eighth of a mile of a foreclosed property. When you read the report it becomes even more stunning. The study done by Woodstock was done on an area in Chicago. It also includes some smaller estimates of effect and some larger ones. My suspicion is that the cumulative effects of more than one foreclosure has a larger effect. The Study was done by Daniel Immergluck and Geoff Smith and can be found on the Woodstock Institute Site.The organization is Chicago based and has a purpose of promoting community reinvestment and economic development in lower-income and minority communities.

The image is of foreclosures notice that the central valley of California seems to be ground zero of this problem.