How a Neighborhood Holds Property Value
A track record of rising home prices
Buying a home that declines sharply in property value can put you underwater on your mortgage, erode your net worth and leave you unable to relocate for a new job or adapt to a change in household income, And one of the biggest factors that determines whether a home will rise or fall in value is its neighborhood. That’s actually a good thing, because you don’t need a crystal ball to evaluate a neighborhood’s direction.
Access to jobs
The single most important determinate of real estate prices in an area is employment opportunity nearby. Without that, a neighborhood is at risk of taking a free fall in real est3te values. There are a few telltale signs of areas with long-term opportunities for jobs;
– Low unemployment.
– High household Income,
– Seats of federal or state government.
– Creative industries (music, television, design, publishing or advertising).
– Research facilities,
– Large or prominent colleges and universities.
A wealth of desirable amenities
Having desirable amenities within the neighborhood Is a second major factor in whether a neighborhood will appreciate or decline in property value. Examples of key amenities that can add value to a neighborhood:
– Low crime rates
– Good public schools
– Pleasing views
– Distinctive architecture
– A variety of retail stores
– An educated population
Acing the “drive-through” test
Doing a drive-through of a prospective neighborhood is a good way to get a gut feeling for where a neighborhood is now and where it’s headed. Look at the neighbor’s lawns. Look at the neighbors’ houses. Do they take care of them? is there pride in the neighborhood?
Features that stand out from surrounding areas
Neighborhoods that protect homeowners values the most are those that combine good job opportunities and amenities in ways that are unusual for the area. For instance, if you live in or a round a metropolitan with poor schools overall, buying in a neighborhood that has good schools can keep your property values high even as the surrounding area falls.