Housing submarkets and the impacts of foreclosures on property prices

► This study conceptualizes a new approach, accounting for housing stock heterogeneity. ► Impacts of nearby foreclosures may differ across types of housing. ► Each multi-family foreclosure reduces the nearby single-family property values by 3%. ► Housing submarket definition matters in estimating the impact of foreclosure. ► Each distant foreclosure in the same submarket devalues single-family houses by 0.1%.