You probably saw the famous real estate slogan, “Location, location, location”. The problem is that most homebuyers don’t know what it really means.
- Location determines real estate value. Where the land sits is very important.
- Appearance, accessibility, and amenities affect a neighborhood’s value.
- Future development affects value when you sell your home.
- Centrality to urban amenities creates value for certain lifestyles.
- A lot’s proximity to noises, busy traffic, and lack of parking lowers value.
- Larger tracts of land trump the quality of a home as land tends to increase in value.
Why Real Estate Location is Important?
How did “location, location, location” become so popular? When you buy a home, you buy the land. Where the land sits is very important. The house can always be remodeled, renovated, or torn down. Yet, the land remains. You can change a house but not the land’s location.
Investing in a home means investing in its location. A city block or its neighborhood may be labeled as “good” or “bad”. This makes the location very important when it comes to value.
Some blocks or neighborhoods may house a majority of baby boomers or millennials. What baby boomers’ or millennials’ tastes and preferences shape the desirability of a location.
Due to their age, Millennials favor locations with good schools, a feeling of community, and great transportation links to cut commuting times. Urban living offers entertainment, international dining, and an uptown lifestyle.
Baby boomers, also due to their age prefer good public transportation, recreation centers, close by parks, and shopping. Therefore, a quiet suburban location appeals to baby boomers.
So, one factor important in deciding what is a good or bad location is the buyer’s age.
Let’s explore other factors of a good location
1. Lot location
You must consider where the home is actually located.
How about a house next to a commercial property? Many houses are available next to a gas station, or a supermarket. Can you handle the traffic, parked cars, and lack of parking spaces on the street? Community centers and large churches also increase traffic and reduce parking access.
Do you want to buy a house on a very busy street or close to the freeway? It will probably cost less but may become difficult to sell years from now.
On the other hand, a home near a large body of water or with a beautiful view will cost more but will continue to keep its value when you decide to sell.
Personal choice determines the value of a neighborhood. Yet, great neighborhoods offer key common factors like appearance, accessibility, and amenities.
Appearance of a neighborhood is important. Quality landscaping, large trees, and nearby parks may appeal to you. You may discover a neighborhood’s popularity by how long homes for sale stay on the market. Quick turnovers mean popularity.
Accessibility requires looking to see if a neighborhood is close to major transit routes with more than one point of entry. Commuting to and from work (or school) becomes a big part of most families. Easy access to public transportation and streets may appeal to you than a home tucked away with only one access.
ACCESS YOUR WALK SCORE FOR ANY NEIGHBORHOOD HERE:
Amenities like shops, grocery stores, restaurants, and entertainment may appeal to you. The closer you live to important amenities the more desirable the home. Unless you like driving long distances to get to your favorite amenities. When you decide to sell does your home offer many amenities to buyers?
Schools become important amenities to families. Even if you don’t have children, consider the future when you want to sell.
ACCESS SCHOOL REPORTS ACROSS AMERICA HERE:
Safety is another important amenity. Neighborhoods with low crime rates offer safety for wandering outdoors and socializing with neighbors where most people want to live.
ACCESS CRIME REPORTS ACROSS AMERICA HERE:
Choosing to live in a town or a city affects how much you pay for a home. A city like San Francisco is highly developed with no room to expand is expensive. Contrary, cities with many uninhabited homes and areas in disrepair are much cheaper.
The U.S. Census Bureau shows that population growth creates urban sprawl. Eventually, population exodus occurs in urban sprawling cities. This results in a severe decline in property values. It’s the law of supply and demand.
Yet, a suburban setting while more expensive than an urban one may appeal to your lifestyle.
While current amenities matter, future ones do too. Research any plans to improve public transportation, schools, and other civic infrastructures. These will increase property values. Commercial developments also increase property values.
Knowing what’s coming gives you a step up on the potential for the desirability of the surrounding area.
Beware: A home’s close proximity to a hospital, fire station, community center, or a large school may lower property value due to noise and traffic.
5. The Home Itself
Last, but not least, the home itself needs evaluation regarding its future value.
Your house hunting may result in choosing between two different homes. Both are located in a great neighborhood. But one is a fixer-upper needing repairs and updates but sits on a large lot. The other one is in great shape but nests on a lot half the size. Both homes are similarly priced. Which do you choose?
Most real estate experts will recommend the fixer-upper. Why? It’s a better investment. Homes depreciate because of age. On the other hand, a large lot will maintain its value or even appreciate. Bulldoze both houses and the larger lot is worth more. You can always update, add on to, or replace a lesser attractive home while the lot remains.
Best Neighborhoods to Buy a Home for Value – Conclusion
Finding the best neighborhoods to buy a home for value requires looking at 5 factors:
- Lot location if it sits near heavy traffic, noises, and offers parking access;
- Neighborhood and its appearance, accessibility, and amenities (like safety);
- Centrality and how close to an urban center you want to live in;
- Development where future plans may increase values or lower them; and
- The home itself and the ability to improve it for greater value or enough land to expand.
We focused on factors affecting future home value for finding the best neighborhood. Yet, location is very subjective depending on your tastes and preferences.
Our past blog posts help buyers including our recent “Worst Neighborhoods to Buy a Home”. In addition, other helpful posts for home buyers:
- “Win A California Home Bidding War”;
- “Avoid Buying A House Needing Major Repairs”;
- “How To Avoid First-Time Home Buyer Mistakes”; and
- “How to Find a Growing Real Estate Market”.
Want to Find the Best Neighborhoods to Buy a Home for Value in San Diego?
Big Block Realty offers experienced Realtors who know all the neighborhoods in San Diego County. We even use the unique RealScout program to quickly find the best-listed homes for sale meeting your needs and preferences.
Steven Rich, MBA – Guest Blogger
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