Everyone knows the importance of location to property value, but some interesting details might surprise you. Parts of your community you hadn’t considered significant before could impact the way your house performs on the market. The reality is, your neighborhood affects your property value in unexpected ways. You might even call some of these trends downright strange.
With the ability to search and find desirable properties online, people can spend time looking up neighborhood properties too. And because of this accessibility and variety of options, they make a point to avoid areas with certain features that are off-putting and ugly. It’s a natural part of the home buying process, of course.
So how is your neighborhood value impacting your home’s value? In this article, we’ll list seven weird ways that your neighborhood affects your property value — aspects you might’ve considered harmless, but in actuality can make or break a potential deal.
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1. Concentration of Renters
What correlation is there between the number of rental buildings and the property value in a neighborhood? Why an apartment complex would affect the price of homes in an area isn’t immediately apparent, but the numbers suggest that it’s a powerful deterrent to those searching for a property.
In fact, a high concentration of renters in an area can reduce property value by almost 14 percent. A potential cause behind this shift in value is the desire for a distinct separation between the rental lifestyle and homeownership. Many potential homebuyers are likely looking for an established community feel, which is hard to accomplish with neighbors constantly shuffling in and out of the area. There’s also the reality that owned homes may contend with dissonant, unsightly buildings if landlords are lax.
2. Local Cemeteries
Cemeteries are common in many communities. Unfortunately, proximity to one can jeopardize the value of your home. Some attribute it to superstition and others to the unsettling idea of living beside so many buried bodies, just out of sight. Spooky, right?
Properties that are close to a local cemetery see a drop in value of around 12 percent. Most home buyers don’t want to pass a grim reminder of their own mortality on the way to work every morning. On the other hand, a hardy buyer could nab a great deal if they’re up for seeing tombstones in their backyard.
3. Proximity to Cafés
Here’s something a little less dark. One surprising neighborhood feature can have a positive influence on property value. Homebuyers enjoy cafes within walking distance of their residence, and may even pay more for the privilege. The presence of a nearby coffee shop, also known as the “Starbucks Effect,” has a powerful impact on the way buyers assess worth.
Over 17 years of collecting data, Zillow found that homes adjacent to a Starbucks rose in value by 96 percent, and more distant properties appreciated by 65 percent. The quality of the coffee shop is also a consideration, however, with Dunkin’ lacking the same appeal as its competitor. Moving forward into a community-minded future, boasting walking distance to a locally-owned café could boost your property value even more.
4. Sexual Orientation
Neighborhood inclusivity is attractive for many individuals seeking a sense of community or refuge. Given this context, it’s really not a surprise that sexual orientation can have an impact on neighborhood property values. Gay neighborhoods often see a significant boost in property value for home buyers seeking neighbors with their own sexual orientation.
Trulia’s research found that almost all of these neighborhoods in their study were more expensive than their metros as a whole. Over three years, they calculated that cost per square foot in neighborhoods for gay men rose from $188 to $238. In neighborhoods for gay women, it rose from $133 to $157.
5. Age of Neighbors
Thinking of your property value within the context of your neighbors’ physical attributes is a strange concept, but the average age of those who live in the homes around a property correlates with its value. It’s important to note that this isn’t causation, and age discrimination isn’t necessarily to blame.
Many young people in search of job opportunities seek them in metropolitan areas. This leads to massive emigration from zones with a high concentration of seniors. This transition raises the value of properties close to the industry while reducing the value of properties where much of the workforce is retired. Younger homebuyers just don’t find as much neighborhood value in a community far from their workplaces.
6. Presence of Hoarders
Those with messy homes and legitimate hoarders are two very different groups of people, and that distinction is important. A hoarder’s accumulation of trash in and around a property poses not only a health and safety hazard to themselves, but to the entire neighborhood.
Hoarders are not typically known for keeping a beautiful home, and outside this aesthetic consideration, too much garbage can attract vermin — and in some extreme cases, cause a house fire. A concentration of hoarders in an area often reduces property value by five to 10 percent, according to one appraiser. If you consider the effects of hoarding, it’s not really a surprise that a run-down set of houses in your neighborhood affects your property value.
7. Address Suffix
Perception has a powerful influence on property value, whether that perception is perfectly accurate or makes very little sense. In the case of an address suffix, it’s a bit irrational. The name on signs can both positively and negatively affect a home buyer’s perceived value of a property.
Research found that homes located on drives, lanes, avenues and boulevards have a higher cost per square foot than homes on streets. A suffix can mean a whopping 36 percent difference in the asking price of a home, regardless of its actual worth. Between Cherry Lane and Cherry Street, most will prefer the former.
Property Value is a Strange Thing
Whether or not you think they’re rational, a number of strange factors influence perceived property value. The price of a home fluctuates based on things we consider and many things we don’t. This can be something as simple as an address suffix to the complicated conundrum of renter concentration.
But this isn’t always bad, and you can sometimes use it to your advantage. If you’re searching for a new home, knowing how the neighborhood affects your property value can help you strike a better deal. All it takes is a little compromise to save big.