A new study by a group of Virginia researchers suggests that when you’re researching the purchase of a home, there’s an item you might want to add to your list of things to check – the sex offender registry.
The study by four Longwood University professors of finance and economics, “Neighborhood Tipping and Sorting Dynamics in Real Estate: Evidence From the Virginia Sex Offender Registry,” found that registered sex offenders tend to cluster in certain neighborhoods, which suffer a loss of property values as a result.
Bennie Waller, professor of finance and real estate, said he and his colleagues were looking for a research topic on the general question of what factors affect housing prices. One member of the group, Scott Wentland, assistant professor of economics, had recently seen a study that showed a negative impact on housing values when a sex offender moves into a neighborhood.
The researchers obtained a detailed database of sex offender registrations from the Virginia State Police and another database of home sales information from the Central Virginia Multiple Listing Service, and started comparing the data. The researchers used standard statistical is analysis to control for many factors that can affect property values – including square footage of homes, time of year sold, and the unemployment rate – and were able to isolate the effect of sex offenders in the neighborhood.
“When we ran it, it came up real significant,” Waller said.
Initially, they found that the presence of a registered sex offender within 0.1 mile of a home resulted in an average 7 percent decrease in the selling price and 80 percent increase in the time the home takes to sell.
The researchers further found that if one or two more offenders move into the same neighborhood, there’s little additional negative impact. However, the impact reaches a “tipping point,” according to the study, if four or more offenders live within a quarter-mile radius of one another: “A cluster of four or more offenders leads [on average] to a sharp $25,099 (or 16 percent) drop in price of nearby homes.”
Find out which homes are most affected, and read the complete article, on the Chesterfield Observer.