July 2010:Abstract:
This paper explores the effect that living near a sex offender has on the marketability of one’s home. Specifically, we estimate the impact on a home’s sales price and the length of time it takes for the home to sell. Since the 1994 passage of Sexual Offender Act (known as Megan’s Law), persons convicted of sex crimes have been required to notify local law enforcement about their current domicile and any change of address. Since then, sex offenders’ residencies have become publicly available information allowing anyone to lookup whether a sex offender resides nearby. Using cross-sectional data from a central Virginia multiple listing service we find that sexual offenders have robust and economically large effects on nearby real estate. Our results indicate that the presence of a nearby registered sex offender reduces home values by approximately 9%. Moreover, these same homes take as much as 10% longer to sell than homes not located near registered sex offenders. These results prove robust over numerous specifications and modeling techniques commonly found in the literature.
For the remainder of this paper: by Raymond T. Brastow, Longwood College -and- Bennie D. Waller Jr., Longwood University -and- Scott Wentland, George Mason University
This study and similar other ones fail in this respect: They fail to investigate what methods are used to effect a sale. The studies only look to the results of a sale. Everyone knows that politicians use "sex offenders" to advance themselves politically, newspapers use "sex Offender" stories to increase sales as do iPhone applications which provide limited and often incorrect information about "sex offenders' in the community.
No study has investigated the pressures the presence of "sex offenders" in proximity to a home for sale, place on those who are involved in the sale, including the homeowner. Many of these pressures are simply unrealistic, false, or only in the minds of those involved in the sale. Further research is needed into this essential area before drawing any conclusions. Are risks real or perceived? Who is perpetrating that homes should be selling at lower prices? see "From the Study" below.
UPDATE: Why do sellers tend to lower their prices? No research into why. Also, 13 days on the market longer than other properties, 13 days is insignificant in real estate sales and the study blows this out of proportion. The value of the property is set by the assessor's office which makes no distinctions as to whether a sex offender lives close to the property. Lower value is a perceived problem with no real foundation. Consider if sale price is juggled (lowered based on perceived fears), certainly studies based on sale price will show that, but the studies fail to check into why, they assume it is the former offender causing the problem.
"From the Study" p-9: "While sellers tend to sell their properties at substantially lower values when a registered sex offender lives nearby, they may not be lowering their sales price enough. Sellers and their agents may have difficulty estimating a property’s expected value if a sex offender is near. That is, a reduced offer price may not attract enough potential buyers, resulting in a longer marketing duration of the home. Table 4 shows that homes located near (within .1 mile of) a registered sex offender spend abut 10% more time on the market. This works out to be about 13 days longer on the market than other similar properties, which are also competitively priced. In relative terms, this is roughly equivalent to selling your home in the “off” season of fall or winter (as compared to the summer or spring)."
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