Appraising a Haunted House 👻: Lessons from the Amityville Horror

The notion of a “haunted” house may sound sensational, yet for appraisers it represents a legitimate valuation challenge.

At Baldwin Appraisal Services, LLC, we often encounter situations where buyer perception—not physical condition—drives market behavior.

Few examples illustrate this better than 112 Ocean Avenue, Amityville, New York, the site of the infamous Amityville Horror.

What Makes a Property “Stigmatized”?

A stigmatized property is one that suffers market resistance due to psychological or emotional factors unrelated to its construction or utility.¹

The Appraisal Institute’s AO-9 categorizes such conditions as detrimental influences requiring evidence-based analysis.

The 1991 “Ghostbusters” case, Stambovsky v. Ackley, established that if a seller publicly promotes a haunting, that reputation becomes material to value.

In other words, public perception itself can alter market value, even when the building remains sound.

Case in Point: The Amityville Horror House

Address: 112 Ocean Avenue, Amityville, NY 11701

Background: In 1974, six members of the DeFeo family were murdered in the home. The following year, George and Kathy Lutz purchased it for $80,000 (approximately $430,000 in 2025 dollars).

Within a month, they fled—claiming supernatural disturbances—sparking the Amityville Horror book (1977) and subsequent films.

Sales History Snapshot

Sources: Newsday archives (2010–2017); Realtor.com historical listings; Zillow transaction data; New York Times real-estate reports.

Market Behavior and Stigma Decay

Initial sales following the murders reflected a temporary stigma discount of 10–15 percent, consistent with studies on psychologically impacted properties.³

By the 1990s, however, renovations, time, and a deliberate address change diluted the effect.

By 2010–2017, the property sold within normal market ranges, demonstrating the “time-decay principle” often cited in the Appraisal Journal and AO-9—i.e., as publicity subsides and physical quality improves, stigma diminishes.

This trajectory underscores a crucial valuation point:

Market reaction, not folklore, determines measurable value impact.

Analytical Framework for Appraisers

1. Comparable Sales – Identify paired sales with similar notoriety or neighborhood conditions.

2. Public Awareness Audit – Confirm how widely the reputation is publicized (tourism listings, media hits, online search results).

3. Survey Evidence – Interview agents and buyers to estimate expected discount or extended marketing time.

4. Income Potential – If notoriety can be monetized (e.g., themed rentals, film licensing), model potential premium under proper zoning.

5. Time-Decay Adjustment – Evaluate resale performance over time to measure stigma dissipation, as demonstrated by Amityville’s appreciation trend.

Applying the Framework to a Typical “Haunted” Home

In a recent internal Baldwin Appraisal Services case study, a Victorian home of similar vintage with a regional haunting reputation yielded the following:

The discount closely mirrors the early Amityville resales and broader academic findings on stigmatized housing.³

Disclosure and Reporting Considerations

• Scope of Work: Document media coverage, public reputation, and market sentiment.

• Extraordinary Assumptions: Assume public awareness consistent with current publicity.

• Hypothetical Conditions: Apply only if valuing the property as un-stigmatized.

• Limiting Conditions: Recognize that public perception evolves; today’s stigma may be tomorrow’s curiosity.

• Ethics and Compliance: Follow USPAP Standards 1 & 2; maintain neutrality toward supernatural claims.

Professional Insights

• Stigma Is Quantifiable: Empirical research and paired sales demonstrate real, measurable market impacts.

• Marketing Matters: Rebranding or address changes, as with Amityville’s 108 Ocean Ave., can moderate effects.

• Income Potential Exists: Under proper permitting, “haunted” branding can generate niche revenue that offsets stigma.⁴

• Documentation Ensures Defensibility: Retain all evidence—press coverage, listings, survey data—in the workfile.

Conclusion

The story of Amityville Horror proves that even extreme stigma can fade over time, while underscoring the need for disciplined appraisal methodology.

At Baldwin Appraisal Services, LLC, our responsibility is not to judge the paranormal but to interpret how market participants react to perception—and to translate that behavior into a credible opinion of value.

Haunted or not, every property deserves an appraisal grounded in evidence, transparency, and USPAP-compliant analysis.

References

1. Appraisal Institute, Real Estate Damages: Analysis and Valuation of Impaired Property, 3rd Ed., 2022.

2. Mashvisor, “The Complete Guide to Buying a Stigmatized Property,” 2021.

3. Chapman, J.D. et al., “Stigmatized Properties and Housing Values: An Exploratory Study,” 2019.

4. McKissock Learning, “Appraising Stigmatized Properties: Challenges and Opportunities,” 2024.

5. Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. App. Div. 1991).

6. Newsday archives (2010–2017) and New York Times Real Estate section coverage of 112 Ocean Ave. sales.

7. Kiplinger, “Selling a Haunted House? What You Have to Tell Buyers,” 2025.

8. Winning with Wade, “Stigmatized Properties and FHA Appraisals,” 2025.

9. National Association of REALTORS, “Stigmatized Properties and Disclosure Trends,” 2023.

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