Factors That Can Lower Your Homes Value
Do you know what brings down property value?
Considering that your home is probably one of the most significant investments, it only makes sense to do what you can to preserve its value.
But if you are like most homeowners, you may not be aware of everything that can lower your property’s value.
Some are obvious; some are less so.
If you’re smart, you’ll look out for some of the items I’m going to mention to protect your investment(s) both now and in the future.
Many things that will lower a home’s value can be found in and around a property. Understanding how these factors can influence the long-term value of a home is critical.
Sometimes buyers get so caught up in the excitement of a home’s interior appeal that they forget the house is an investment.
External factors can significantly influence a property’s value.
For this reason, it is essential to do due diligence in real estate.
You not only want to know the history of a house but all of the surroundings and potential items that can influence the property value.
It’s too late when you conclude later on that you’ve bought a lemon nobody wants.
Here are some things to consider when selecting a neighborhood to live in. Understand what people want and don’t want!
Let’s examine all the things that can decrease property values. Understanding what hurts property value means avoiding them when making a home purchase.
A Stigmatization
Do you know what a stigmatized property is in real estate? It is one where there is stigmatization, such as paranormal activity, suicide, or murder.
Many buyers consider properties with these characteristics less desirable and avoid them. Fewer buyers mean these stigmas bring down the property value.
Abandoned or Condemned Houses
Not only are condemned or abandoned houses considered stigmatized, but they can also bring down the property values of other homes in the neighborhood.
This is especially true when the properties are unsightly. Dilapidated homes that everyone has to drive by daily are not appealing.
Proximity to Power Lines
Having large powerlines near a home can certainly bring down property value.
Power lines are vital in modern life, bringing much-needed electricity to everyone. Unfortunately, no matter how important they are, power lines are not a good thing to have nearby when you are a homeowner.
They buzz, are imposing, are unattractive, and make many people worry about adverse health effects related to living near them.
The adverse health effects of power lines are inconclusive. However, many people like to take the better be safe than sorry policy.
Some research projects suggest that living near high-voltage power lines can increase the incidence of cancer and other diseases. There is also some association with headaches, fatigue, anxiety, insomnia, rashes, and even muscle pain.
A home may seem like a genuine bargain if it is near power lines, but there is a reason for the low price. You should always consult a local real estate expert when buying near power lines to see how much it will impact a home’s market value.
Being next to power lines typically lower the value of a home!Click To TweetProximity to a Gun Range
While some people love having a shooting range nearby to participate in a hobby, this rarely translates well when considering purchasing a home.
If your home is a few miles away – splendid! If the gun range is next door, you better think twice about buying.
Not only can gun ranges be loud, but there is also the off chance of finding a stray bullet hitting your property or, worse, a family member.
It would be best if you always researched the shooting schedule when considering a home near a gun range. Some places shoot daily, while others might only be on the weekend.
Make sure you figure out your tolerance for hearing gunshots before purchasing a home.
Proximity to Train Tracks
Being close to a commuter rail is a highly desirable perk regarding homeownership. Lots of home buyers want to be located close to a commuter rail.
For example, where I’m based in Southborough, Massachusetts, buyers find the town desirable because the commuter rail to Boston is there.
On the other hand, being located next to train tracks is a different story altogether. When your home is located directly next to train tracks, it can bring down the value of your property.
Living next to a train means dealing with the noise at various hours of the day. Additionally, if a buyer has kids, it could deter them from purchasing for safety concerns.
Ask your real estate agent how much impact the train has on reducing the property’s market value.
Close Proximity to a Highway
While being close to commuting routes is ideal for home values, being on top of a freeway is not. If you can see or hear a significant thoroughfare, more than likely, it will hurt home values.
In my hometown of Hopkinton, Mass, we have two major highways, The Mass Pike and Route 495, that run through the town. Homes adjacent to these roads have lower values than identical homes elsewhere.
When the highway is visible, it can lower the property value even further.
Registered Sex Offenders
It is possible to look up the registered sex offenders in any given neighborhood – something that more and more buyers are doing now that they know they can.
If buyers see that there are one or more registered sex offenders in your neighborhood, it will drive down the value of your home.
One study showed the presence of a sex offender in a neighborhood could lower prices by up to 12%.
It is scary for any parent to consider purchasing a home with a sex offender nearby. Laws vary from state to state on disclosing registered sex offenders near you. A real estate agent may not have a handle if a sex offender lives nearby.
You should ask, and if you don’t get a satisfactory answer go to the local police department.
The Hoarders Next Door
Your neighbors matter regarding the price of your home – or, more specifically, how they keep up their property.
If your neighbors appear to be hoarders, buyers will likely steer clear of your home.
It doesn’t matter if they are technically hoarders or not.
What is essential is the way the exterior of the property appears. It will drag down your home’s value if it is filled with junk.
Understanding how to deal with a troublesome neighbor is crucial, especially when selling a home.
Nobody wants to look at an eye soar next door. Nuisances out of someone’s control are even more likely to make them skip a property.
Unusual Upgrades
When you own a home in a neighborhood, your property is part of a greater whole that affects your property’s value in multiple ways.
While a messy neighbor can cause problems, so can changes you make that are uncharacteristic of your neighborhood.
For instance, installing a pool in a colder climate where no one else has one can make your home less desirable. The same goes for improvements that require an extra level of upkeep, like elaborate landscaping.
Large fountains and exotic gardens are maintained by staff in luxury neighborhoods. They will probably just be seen as extra work in a regular middle-class area.
For this reason, real estate agents are often preaching about what improvements will increase a home’s value and that won’t.
There are surprising home renovations that don’t add value. Make sure you don’t expect an increase in value from these so-called “improvements.”
Excessive Noise Pollution
Noise pollution is something you can learn to live with – most of the time. But it is not considered desirable by most buyers.
Living near a highway, a loud factory, an industrial area, an airport, or any other regular, noticeable noise will be a negative factor when selling your property.
The louder the noise, or the more inconvenient – like noisy trains passing by and rumbling the windows at 2 a.m. – the more it will cause a problem with resale value.
Color and Interior Design
The color of your home can draw in buyers or push them away. The more unusual your color choice, the more likely you will struggle to find a buyer.
Most buyers want a home that fits in with the surrounding area, not one that sticks out. The same problem can arise with your home’s color and interior design.
No matter how much you like the way something looks, it may make it harder to sell buyers on it if it is too unusual.
The color of your rooms can make or break a sale if they stick out like a sore thumb. Color selection is often an awkward conversation to have with a seller.
The owner loves their color selection. On the other hand, the real estate agent knows it could affect the time of the market and the ultimate sale price. You walk a delicate tightrope in explaining this to a seller.
Real estate agents often explain the need to remove wallpaper when selling a home. It is highly personal and dates a home.
Homes with a lot of wallpaper are significantly harder to sell. Having neutral colors and removing dated wallpaper is part of properly staging a home.
Locating In an Undesirable School District
Many people who buy homes are thinking about having or already having children.
Even if they are not planning on having kids immediately, the home is usually a long-term purchase, so they will still look at the schools before buying.
That is why a lousy school system can negatively affect the price of your home.
Research has repeatedly shown that home buyers will pay more for properties in a top school district.
From experience, those homes in the best school districts hold their value better when market conditions are not ideal (buyer’s market).
There will always be a better demand for homes with the best schools.
An area where the school system is considered poor will negatively impact the value of all properties in a given city or town.
Billboards Near The Home
Billboards are seemingly everywhere, even near residential homes. Studies have shown that proximity to a billboard can bring down a property’s value.
The closer the billboard, the more negative impact it has on the price of the home. A nearby billboard can drag down a home’s value by tens of thousands of dollars, which is why many neighborhoods are instituting a no-billboard policy to protect home values.
Located Near Fracking
Fracking operations have exploded across North America to take advantage of natural gas deposits that were previously inaccessible.
Unfortunately, there is a worry that the fracking process causes problems with groundwater wherever fracking is conducted.
While there is no solid evidence either way about the effects of fracking on groundwater, the fact is that buyers will tend to avoid homes near fracking if at all possible.
If your home is within a few miles of a fracking operation, you will notice a decrease in your home value. When buying a home with well water, it is always a good idea to do a quality and quantity test.
Located Near A Strip Club
Another external factor that can bring down property value is being near a strip club. For many people, this is not a desirable business to have nearby.
Located Near a Cemetary
You wouldn’t think being close to a cemetery would decrease property value. After all, they are the quietest folks on the block.
Unfortunately, that is not the case.
Being Located Near a Landfill or Dump
Few buyers find living near a city dump an attractive feature. Some are worse than others. If you purchase near a landfill, you can expect it to lower your property’s value.
Having Noisy Neighbors
Your neighbors are not only a problem if they are messy but also if they are noisy. Noisy neighbors can drive down the value of your home.
The noisier they are, the more people will want to avoid living in the area. It can be even worse when you are in tight quarters, such as a condo or townhome.
Numerous Foreclosures
One foreclosure in your neighborhood will probably not impact your property’s value.
But if you happen to be in a neighborhood filled with foreclosures, it will hurt the value of your home.
Multiple foreclosures imply something is wrong with the area. They also mean the neighborhood is more prone to squatters, vandalism, deterioration, and general unpleasantness.
A report by The Alliance for a Just Society, a coalition centered on economic, racial, and social equality, found a statistically significant reduction in surrounding home values and increased local tax rates.
According to RealtyTrac data and other sources, homes nearby are proven to drop an average of one percent for every seven percent of the foreclosed home value.
Final Thoughts on What Brings Down Property Value
As you can see, some factors can decrease the value of a home. It is essential to consult with a local real estate agent to determine exactly how much.
Be sure you understand how your appreciation rate will change with one of these problems in proximity to your home. Far too many people do not realize the impact of external forces on real estate values.
Hopefully, you now better understand what will lower property values.
Additional Helpful Home Buying Articles
- Avoid these first-time buyer mistakes – see what you don’t want to do when buying your first house.
- Buying a home after a natural disaster – learn what you need to know about purchasing a house after a natural disaster.
Use these additional professionally written real estate articles to make intelligent decisions when buying a home. Learn what affects home values and what doesn’t. Best of luck!
About the Author: The above Real Estate information on what brings down property value was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 37+ Years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
