7 Factors That Impact Your Property Value

It might come as a surprise, but some things beyond your control can directly impact your property value. Let's take a closer look at 7 things that could affect your property value.

1. Distressed Property Sales Impact

Distressed property sales near your home can significantly impact your property value. Consider that neighbor who might be 250 to 500 feet away from your home and is going through foreclosure or a short sale. Unfortunately, we can't control this, but it will impact property values.

According to a study by the Massachusetts Institute of Technology (MIT) in 2010, having a short sale, foreclosure, or any distressed property sale near your house can result in a loss of about 1% of your property's value. That might not sound like much, but if your home is worth $500,000, that's a $5,000 loss through no fault of your own. Market conditions, whether a seller's market, a buyer's market, or a stabilized market, will ultimately determine how many of these types of sales you might see around your area.

 2. Sexual Predators and Property Value

This is unfortunate, but we can't control who becomes our neighbor. The presence of sexual predators in your area can affect property values. A savvy home buyer and their buyer's agent might research this information before making an offer.

If you're wondering how many sexual predators are around you, please visit the National Sex Offender Public Website. This resource can help buyers and sellers make well-informed decisions. Understanding the impact of such factors can help you prepare better when buying or selling a home.

 3. Home Improvement ROI

We all love to add value to our homes, whether by installing a new roof, adding wood or tile floors, giving our kitchens a full makeover, or other renovations. However, keeping your emotions in check and staying realistic about the market is crucial. Unless you plan on keeping the home forever, consider the return on investment (ROI) of your improvements.

According to Zillow, if you make a lot of renovations, you should not price your home more than 10% above the highest comparable property in your area. This helps keep your price in line with market statistics. 

 4. Property Value and Location

Location, location, location! It might sound cliché, but it's a crucial factor. We should always be aware of city planners' forecasts for the area where we're buying a house. What happens if a power plant or an industrial complex is built nearby?

A joint study conducted by Princeton University and the University of California, Berkeley, shows that if a power plant is built within a half-mile radius of your home, you can expect to lose as much as 11% of your property value. Similarly, if you live near a high-traffic landfill, you could lose as much as 13.5% of your property value, according to Montana State University

 5. High Traffic Areas and Home Value

High-traffic areas can also impact your property value. While some people don't mind living close to a street or freeway, it's essential to consider how this might affect future resale value. Homes next to high-traffic areas typically sell for less than those in quieter parts of the same neighborhood.

When looking at homes, you might have noticed that identical houses in the same area can have significantly different prices. This price difference often boils down to location within the neighborhood. Being realistic about the impact of high-traffic areas on property value can help you make better decisions when buying or selling a home.

 6. Wide Open Spaces

Parks and vacant land around your property can be a double-edged sword. On the one hand, they can add value to your home; on the other hand, they can also detract from it. John L. Crompton from Texas A&M University conducted a study in 2007 that explains this phenomenon using the proximate principle.

The study found that the market values of properties near parks or open spaces are often higher than comparable properties elsewhere. However, this depends on the type of park or open space and how frequently it's used. For instance, heavily used parks can actually decrease nearby property values, while less frequented parks can add value. For more on Crompton's study, visit Texas A&M University's website.

 7. Homeowners Association Impact

The presence or absence of a Homeowners Association (HOA) can also affect your property value. Some people dislike the rules imposed by HOAs, but these rules help preserve property values. Without an HOA, you might end up with neighbors who don't maintain their property, which can detract from your home's value.

An HOA can help ensure that homes in the community adhere to certain standards, which can make the neighborhood more attractive to potential buyers. Conversely, lacking HOA rules can lead to a more chaotic environment, which might turn off buyers. Understanding the impact of HOAs on property values can help you make informed decisions when buying or selling a home.

For more insights and tips, please consider subscribing to my YouTube channel.

Please contact me if you plan to buy or sell a home in the Las Vegas, Nevada region. 

Thank you for reading. Peace be with you. 

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