Quick Takeaways

  • Stigmatized properties have been psychologically impacted by events such as murder, suicide, alleged hauntings, or notorious previous owner.
  • Violent crimes and abandoned properties both have significant effects on property values and the surrounding neighborhood.
  • Some buyers are happy to overlook the stigma in exchange for an affordable price.
  • Agents should be aware of their state disclosure laws around stigmatized properties.

The National Association of REALTORS® defines stigmatized property as: "a property that has been psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any kind."

Many circumstances can stigmatize a property—location, murder or suicide in the house, alleged hauntings, or a notorious previous owner. Stigmatized properties can be a hard sell for some buyers, while others may be eager to take advantage of a discounted price, especially in a tight market. Agents may have an obligation to disclose, depending on state laws and the nature of the stigma.

Violent crimes tend to have a strong negative impact on property values for both the crime site and sometimes neighboring homes. Even when stigmas have less of an impact on value, they may still reduce demand and increase the time on market. Affected property values gradually increase again with the passage of time.

Vacant and abandoned properties represent 1.4% of homes in the United States, according to recent reports. Abandoned homes have a negative impact on neighborhood property values. However, they can also present an affordable opportunity for investors and DIYers. Purchasing and improving an abandoned property has a positive impact on an entire neighborhood’s value and attractiveness to buyers.

See References for more information.