The old adage in real estate is that location is the most important factor when calculating a property's value. This is true about the ZIP code where your home is located. If you are close to the beach or in a trendy area of town, the market value of your home will reflect the desirable location. However, there also are factors in your own neighborhood that may impact your property value and are more directly related to your individual circumstance than the general area of where your house resides.
When determining a property's value, real estate agents and appraisers refer to the most recent comparable sales within the closest proximity of the home. These comps, as they are called, should not be older than six months and should be as similar to your house as possible. Therefore, a recently sold home outside of your immediate neighborhood may not be a reliable indication of what your property is worth in the current market.
Location in Neighborhood
Where your house is situated in your neighborhood, helps to determine its value. A house on the corner or next to a busy street may be less desirable due to noise and traffic. This will bring your property value down compared to other houses in the area. If you have a high level of crime, or your home is situated near a sex offender, you may have a difficult time reselling the property.
However, one of the most important considerations for families is the ranking of the school district and proximity to the nearest school. These two factors serve to elevate the value of your home within your neighborhood. Other desirable attributes are being located at the end of a cul-de-sac, near a park or recreation center and convenient to shopping, public transit and major roads and freeways.
Condition of Neighboring Homes
Just because you live in a desirable location doesn't mean that your property values will remain steady. Unfortunately, an important factor that determines how much your home is worth and how quickly it will sell are your neighbors. If your next-door neighbors, or those whose homes can be seen from yours, have not cared for their property, you can lose money on your market value. Neighbors who have run down cars in the driveway, on blocks, or who have let the front exterior of the house deteriorate, are a hazard to your pocketbook. As a recourse, complain to the code enforcement department in your jurisdiction to attempt to force your neighbors to clean up the property.
Your house may be in an area with high real estate values in a great neighborhood location with conscientious neighbors, but if you neglect to review the future plans for your development, subdivision or city, you may overlook some serious objections from buyers. For example, a stoplight may be scheduled to be placed on the corner by your house. Additionally, a rock quarry can be slated in close proximity for a future date. Sometimes zoning laws change and force residents to conform, such as horse property being rezoned from agricultural to residential, not allowing farm animals. Ask your city or county planning department for information about your neighborhood so that you know if your property values will be impacted by an action of which you have not been made aware.