The classic call of “Location, location, location” may have fallen out of disuse in the real estate industry, but its basic meaning still pertains to property value today. While square footage, energy-efficient utilities and landscaping are a large part of how much a home is worth, the surrounding neighborhood has a considerable effect on sale price as well. There are three main factors that determine whether the surrounding neighborhood will cause house prices to rise or fall.
1 – Location and Logistics
Property values are higher in neighborhoods with quality school systems, convenient access to major roadways and public transportation and nearby grocery or retail shops, service businesses, restaurants, parks or playgrounds and entertainment. Although these things are preferred within a short driving distance, they should not be too close to the houses to create traffic problems or too many strangers walking or driving through the residential streets.
Other location-specific considerations include proximity to emergency services, noise concerns such as train stations or airports, nearby prisons or industrial zones.
2 – Safety and Security
The safety of the neighborhood is primarily determined by crime rates in the area. Although rates for murder and other violent crime, sexual assaults and robbery are easily found with a bit of online searching, some less obvious criminal activity can still affect property values. These could be as simple as a teenager going on a vandalism spree or police being called to a house repeatedly for domestic issues. Although these have nothing to do with your house in particular, they add up to an overall decrease in neighborhood desirability.
3 – Cleanliness and Continuity
A neighbor with a resting hulk of an old car in the driveway and trees falling onto his lawn will bring down property values for the rest of the street because nobody wants to buy a house next to that. Many people prefer to live in neighborhoods with Homeowners ‘Associations for this and other reasons. A neighborhood that is clean, well-ordered, well-maintained and with houses that follow the same design scheme usually has higher home prices than one with aesthetic problems.
While it is impossible to orchestrate a positive spin on neighborhood layouts, safety and other properties upkeep, these are the things that prospective buyers look for when choosing a place to live. One of the best ways to ensure stable or increasing property values is to buy in a community that already has these factors in place. This will help you realize a considerable profit when you decide to sell your home in the years to come.
Roman Temkin is a real estate expert. Temkin’s been working in real estate development for the past 5 years in NYC.