Location plays an important role in home values, especially since a property’s location can’t be changed.
Desirable schools and safe neighborhoods are important factors to many buyers, and can result in higher home prices in an area.
Proximity to public transit and amenities can also raise home prices in an area.
Local redevelopment plans can bring added appeal to the neighborhood, increasing home values.
“Location, location, location.” It’s an adage many homebuyers have heard. But what does it mean? How does location affect property value, and why is it important?
7 location factors that can affect property value
Schools are often a contributing factor for homebuyers, even homebuyers without kids. If the house is in a desirable school district, that can drive property values up. Buyers can use school ratings as a first step, but should conduct their own investigation to determine their desired schools and school districts.
Buyers often care about the safety of their neighborhood. How buyers define “safety” can vary, and may include such factors as crime rates, traffic, and cleanliness. Note that crime statistics may be incomplete, skewed, or biased, and may not accurately illustrate the safety of a neighborhood or city.
3. Public transportation
For commuters, proximity to public transit and local highways is often a must. That means homes that are easily commutable to desirable work locations can carry a higher price tag. However, if the house is too close to a highway or train tracks, it can negatively impact the home's value because of noise, pollution, vibrations, etc.
4. Amenities and attractions
What amenities and attractions are nearby the home? Is there a great park across the street? A fitness studio and a hip coffee shop right around the corner? These nearby amenities could drive home prices up.
5. Local development plans
If the area has development plans to add more amenities, jobs, or access to the community, that could impact home values. For example, let’s say a big tech company plans to build a local campus in town over the next three years. That will likely bring more house hunters to the area, as people take jobs at the company. Higher demand often brings higher home values.
6. Neighboring businesses and buildings
Your neighboring businesses and buildings can help make or break property values. If there’s an abandoned factory next door, it may be seen as an eyesore or safety concern by potential buyers. On the other hand, if there’s a reputable daycare or beloved restaurant down the block, that could improve your home’s value.
7. Growth potential
The growth potential of an area can also affect property value. Neighborhoods can change, and what once was a less-desirable neighborhood could become the next up-and-coming jewel highlighted by major media outlets. When areas are redeveloping, property values will often rise to reflect the increasing desirability of the neighborhood.
Remember: you may be able to change the house and even the land to some extent, but you can’t change the property’s location.
This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.
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