The Impact of Location on Property Values: Factors to Consider

The Impact of Location on Property Values: Factors to Consider

In the exciting journey of buying or selling a home, it's easy to get caught up in all the details – from the size of the bedrooms to the color of the kitchen cabinets. However, recent survey’s conducted post-pandemic suggest that more than half of homeowners across the nation are looking for more than just a nice house. They want neighbors who share their interests and a community they can really be a part of.

Amidst the excitement of finding the perfect community, it's crucial to recognize that the location of your home directly impacts its value. Now, more than ever, where your house sits on the map matters big time. Whether you're a young professional, a growing family, or enjoying your golden years, the right neighborhood can significantly enhance not only your lifestyle but also the value of your property. Here are a few factors to consider.


Neighborhood Quality: Safety & Cleanliness

The safety and cleanliness of a neighborhood have a large impact on property values. When it comes to picking the perfect place to call home, these factors are non-negotiables for most people. Beyond mere statistics on crime rates and security concerns, the perceived safety of an area profoundly influences prospective buyers. The perception of safety can make or break a neighborhood's reputation. One too many negative news reports, and suddenly, potential buyers are looking elsewhere.

But safety isn't the only thing that matters. Cleanliness plays a huge role too. Think about it: who wants to live in a neighborhood where the streets and parks are overgrown and neglected? A well-kept community shows that residents care about where they live, and that pride shines through in the property values. Well-maintained public spaces, from manicured lawns to vibrant community gardens, create an inviting atmosphere that makes people want to put down roots and call it home. So, when you're scoping out a neighborhood, keep an eye out for those little signs of care and attention—they could be the key to finding your dream home.


School Districts

The quality of nearby schools and school districts can have a significant impact on property values, as many home buyers prioritize education when choosing a location. According to NAR’s Profile of Home Buyers and Sellers, more than half of home buyers with children in the home under the age of 18 years said that the quality of school districts is an important factor when purchasing a home. Homes located within highly rated school districts often fetch higher prices and experience greater demand from families.

A lot has been happening in America’s schools lately. Battles over the appropriateness of classroom curriculum and books in school libraries have captured the national conversation. For REALTORS®, this may lead to more questions from your clients about the suitability of local schools for their children. You must remember that it’s a violation of fair housing law to give customers your opinion about school quality and steer them toward or away from certain schools. But you can point customers toward data, resources, and the right people to talk to about their concerns.

An important detail to note is that school spending has been proven to increase home values. A study done by the National Bureau of Economic Research found that home values increased $20 for every one dollar spent on public schools in a community.


Proximity to Amenities

When it comes to choosing where to live, convenience is key. That's why the distance to essential amenities like shopping centers, parks, and grocery stores can greatly impact property values. Picture yourself as a potential buyer or renter: wouldn't you prefer a place that offers everything you need right on your doorstep? That's why neighborhoods with easy access to these amenities are often in high demand, driving up property values in the process.

But what counts as an amenity? It varies from person to person. Some people might prioritize having a fitness center nearby, while others might prioritize easy access to grocery stores or dining options. Even the brand of the grocery store can influence a neighborhood's appeal. And while you might not care about having a park or restaurant down the street, these features can still add value to your home by attracting buyers who do.

The presence of well-known brands in shopping centers is a sign of confidence in the area's future growth. If your home is conveniently located near retail centers, you could see a significant increase in its value. Studies have shown that suburban homes within a mile of retail centers or urban homes within a quarter mile can experience a 6-8% increase in value.

So, while amenities might not be a top priority for you, they could be a deal-breaker for someone else. And when it comes time to sell, having these conveniences nearby could make your property much more attractive to potential buyers.


Economic Factors

The economic landscape of an area can also have a major impact on property values. Factors like property taxes, local job markets, and overall economic stability all play a role in determining how much your home is worth.

Property taxes vary from one area to another, and they can significantly affect the overall cost of homeownership. Lower property tax rates are often more attractive to buyers, while higher rates can put downward pressure on property values.

The job market is another important consideration. Thriving towns with diverse industries tend to attract more potential buyers, driving up demand for residential real estate. Properties located near business centers or major employers are particularly sought after and can yield a higher return on investment.

Infrastructure and transportation are also key economic factors to consider. Properties located near well-maintained roads and convenient transportation networks tend to be more attractive to buyers. Additionally, planned business developments in the area can further boost property values.


Historical Significance

Living in a historical district is good for the resale value of your home. While some buyers may see restrictions on property modifications as a downside, the uniformity and uniqueness of historical districts often increase property values over time.

There are more than 2,300 local historic districts in the United States and most have guidelines in place to preserve the character and integrity of the area. These standards ensure that properties maintain their historical charm, which can significantly boost their value. Studies have shown that properties in historic districts command a higher value per square foot compared to non-designated properties.

Buying a home in a historic district means preserving its character for future generations. The unique charm that attracted you to the home will continue to appeal to buyers for years to come, ensuring a lasting legacy for your property.


Environmental Factors

When it comes to real estate, Mother Nature plays a significant role in determining property values. Environmental features such as proximity to bodies of water, scenic views, natural landmarks, and green spaces can all elevate a property's desirability—and price tag. 

Imagine waking up to the soothing sounds of waves or enjoying sweeping scenes of rolling hills. Homes with such coveted views often fetch premium prices. Likewise, access to green spaces like parks and trails adds to a property's allure, offering residents opportunities for relaxation and connection with nature.

Environmental features play a crucial role in shaping a neighborhood's appeal. Whether it's the serenity of a lakeside retreat or the tranquility of a wooded area, nature's presence can enhance a property's value, creating a perfect blend of urban convenience and natural beauty.