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How Neighborhood Affects Home Value
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars – not because they’re dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
School quality
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
Stores nearby
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for 8 percent less than average).
Freeway access
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities – especially those that make lots of noise or produces noxious odors.
Neighborhood foreclosures
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Public services
Some communities have a wealth of quality public services available to them – including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
If you are looking for an experienced real estate agent, connect with us here.
How Reliable Are Home Valuation Tools?
What’s your home worth?
It seems like a simple question, but finding that answer is more complicated than it might seem. Sites like Zillow, Redfin, Eppraisal, and others have built-in home valuation tools that make it seem easy, but how accurate are they? And which one do you believe if you get three different answers? Online valuation tools have become a key part of the home buying and selling process, but they’ve been proven to be highly unreliable in certain instances. One thing that is for certain is that these valuation tools have reinforced that real estate agents are as vital to the process of pricing a home as they ever were – and maybe even more so now.
There are limitations to every online valuation tool. Most are readily acknowledged by their providers, such as Zillow’s “Zestimate”, which clearly states that it offers a median error rate of 4.5%, with varying accuracy across the country. That may not sound like a lot, but keep in mind that amounts to a difference of about $31,500 for a $700,000 home. For Redfin and Trulia, there are similar ranges in results. When you dig deeper into these valuation tools, it’s no small wonder that there are discrepancies, as they rely on a range of different sources for information, some more reliable than others.
Redfin’s tool pulls information directly from multiple listing services(MLSs) all over the country. Others negotiate limited data sharing deals with those same services, but also rely on public records, as well as homeowners’ records. This can lead to gaps in coverage. These tools can serve as helpful pieces of the puzzle when buying or selling a home, but the acknowledged error rate is a reminder of the dangers of relying too heavily on them.
Home valuation tools can be a useful starting point in the real estate process, but nothing compares to the level of detail and knowledge a professional real estate agent offers when pricing a home. An algorithm can’t possibly know about a home’s unique characteristics or those of the surrounding neighborhood. They also can’t answer your questions about what improvements you can make to get top dollar or how buyer behaviors are shaping the market. All of this – and more – can only be delivered by a trusted professional whose number one priority is getting you the best price in a time frame that meets your needs.
If you’re curious what your home might be worth, Windermere offers a tool that provides a series of evaluations about your property and the surrounding market. And once you’re ready, we’re happy to connect you with a Windermere agent who can clarify this information and perform a Comparative Market Analysis to get an even more accurate estimate of what your home could sell for in today’s market.
How Reliable Are Home Valuation Tools?
What’s your home worth?
It seems like a simple question, but finding that answer is more complicated than it might seem. Sites like Zillow, Redfin, Eppraisal, and others have built-in home valuation tools that make it seem easy, but how accurate are they? And which one do you believe if you get three different answers? Online valuation tools have become a key part of the home buying and selling process, but they’ve been proven to be highly unreliable in certain instances. One thing that is for certain is that these valuation tools have reinforced that real estate agents are as vital to the process of pricing a home as they ever were – and maybe even more so now.
There are limitations to every online valuation tool. Most are readily acknowledged by their providers, such as Zillow’s “Zestimate”, which clearly states that it offers a median error rate of 4.5%, with varying accuracy across the country. That may not sound like a lot, but keep in mind that amounts to a difference of about $31,500 for a $700,000 home. For Redfin and Trulia, there are similar ranges in results. When you dig deeper into these valuation tools, it’s no small wonder that there are discrepancies, as they rely on a range of different sources for information, some more reliable than others.
Redfin’s tool pulls information directly from multiple listing services(MLSs) all over the country. Others negotiate limited data sharing deals with those same services, but also rely on public records, as well as homeowners’ records. This can lead to gaps in coverage. These tools can serve as helpful pieces of the puzzle when buying or selling a home, but the acknowledged error rate is a reminder of the dangers of relying too heavily on them.
Home valuation tools can be a useful starting point in the real estate process, but nothing compares to the level of detail and knowledge a professional real estate agent offers when pricing a home. An algorithm can’t possibly know about a home’s unique characteristics or those of the surrounding neighborhood. They also can’t answer your questions about what improvements you can make to get top dollar or how buyer behaviors are shaping the market. All of this – and more – can only be delivered by a trusted professional whose number one priority is getting you the best price in a time frame that meets your needs.
If you’re curious what your home might be worth, Windermere offers a tool that provides a series of evaluations about your property and the surrounding market. And once you’re ready, we’re happy to connect you with a Windermere agent who can clarify this information and perform a Comparative Market Analysis to get an even more accurate estimate of what your home could sell for in today’s market.
How Neighborhood Affects Home Value
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars – not because they’re dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
School quality
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
Stores nearby
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for 8 percent less than average).
Freeway access
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities – especially those that make lots of noise or produces noxious odors.
Neighborhood foreclosures
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Public services
Some communities have a wealth of quality public services available to them – including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
Building Your Home’s Amenities Into Experiences
Indoor-Outdoor Pools
- In much of the country, an outdoor swimming pool isn’t that uncommon. The simple luxury of a private space for recreation can be the centerpiece of a home’s charm.
- Expanding that possibility is the indoor-outdoor pool, which segments a pool into a covered, indoor region, as well as an outdoor area.
- Anyone who loves spending time in the water but lives in too cool a climate to use a pool year-round can enjoy an indoor oasis in the winter that flows seamlessly into an outdoor space in the warmer months.
Creative Wine Cellars
Credit: Spiral Cellars / SpiralCellars.com
- Who among us wouldn’t love a wine cellar? It’s an opportunity for self-expression that echoes back upon centuries of vintage creativity.
- Not every home has the space to build a traditional wine cellar, but a bit of creativity can open the door to other possibilities.
- The underground, spiral cellar, as pictured above, is one way to add a stylish centerpiece to your home that will undoubtedly create a unique experience for your guests.
Outdoor Home Theater
Credit: Pinterest / Realtor.com
- The indoor home theater is far from passé but building upon that experience with an outdoor theater can take your movie nights to the next level.
- The key to this design is versatility. If you live in a sun-kissed state you can construct a lightly covered space for viewings. An artful canopy or raised trellis can be the enclosure.
- Wetter or dustier climates pose a greater challenge, but a retractable awning is a multi-functional feature that can transform your yard into a private cinema no matter the weather.
Building Your Home’s Amenities Into Experiences
Indoor-Outdoor Pools
- In much of the country, an outdoor swimming pool isn’t that uncommon. The simple luxury of a private space for recreation can be the centerpiece of a home’s charm.
- Expanding that possibility is the indoor-outdoor pool, which segments a pool into a covered, indoor region, as well as an outdoor area.
- Anyone who loves spending time in the water but lives in too cool a climate to use a pool year-round can enjoy an indoor oasis in the winter that flows seamlessly into an outdoor space in the warmer months.
Creative Wine Cellars
Credit: Spiral Cellars / SpiralCellars.com
- Who among us wouldn’t love a wine cellar? It’s an opportunity for self-expression that echoes back upon centuries of vintage creativity.
- Not every home has the space to build a traditional wine cellar, but a bit of creativity can open the door to other possibilities.
- The underground, spiral cellar, as pictured above, is one way to add a stylish centerpiece to your home that will undoubtedly create a unique experience for your guests.
Outdoor Home Theater
Credit: Pinterest / Realtor.com
- The indoor home theater is far from passé but building upon that experience with an outdoor theater can take your movie nights to the next level.
- The key to this design is versatility. If you live in a sun-kissed state you can construct a lightly covered space for viewings. An artful canopy or raised trellis can be the enclosure.
- Wetter or dustier climates pose a greater challenge, but a retractable awning is a multi-functional feature that can transform your yard into a private cinema no matter the weather.
How the Neighborhood Impacts a Home’s Value
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars—not because they are dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
School quality
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
Stores nearby
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for eight percent less than average).
Freeway access
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities—especially those that make lots of noise or produces noxious odors.
Neighborhood foreclosures
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Public services
Some communities have a wealth of quality public services available to them—including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
Building Your Home’s Amenities Into Experiences
Indoor-Outdoor Pools
- In much of the country, an outdoor swimming pool isn’t that uncommon. The simple luxury of a private space for recreation can be the centerpiece of a home’s charm.
- Expanding that possibility is the indoor-outdoor pool, which segments a pool into a covered, indoor region, as well as an outdoor area.
- Anyone who loves spending time in the water but lives in too cool a climate to use a pool year-round can enjoy an indoor oasis in the winter that flows seamlessly into an outdoor space in the warmer months.
Creative Wine Cellars
Credit: Spiral Cellars / SpiralCellars.com
- Who among us wouldn’t love a wine cellar? It’s an opportunity for self-expression that echoes back upon centuries of vintage creativity.
- Not every home has the space to build a traditional wine cellar, but a bit of creativity can open the door to other possibilities.
- The underground, spiral cellar, as pictured above, is one way to add a stylish centerpiece to your home that will undoubtedly create a unique experience for your guests.
Outdoor Home Theater
Credit: Pinterest / Realtor.com
- The indoor home theater is far from passé but building upon that experience with an outdoor theater can take your movie nights to the next level.
- The key to this design is versatility. If you live in a sun-kissed state you can construct a lightly covered space for viewings. An artful canopy or raised trellis can be the enclosure.
- Wetter or dustier climates pose a greater challenge, but a retractable awning is a multi-functional feature that can transform your yard into a private cinema no matter the weather.
How Neighborhood Affects Home Value
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars – not because they’re dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
School quality
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
Stores nearby
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for 8 percent less than average).
Freeway access
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities – especially those that make lots of noise or produces noxious odors.
Neighborhood foreclosures
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Public services
Some communities have a wealth of quality public services available to them – including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
If you are looking for an experienced real estate agent, connect with us here
