A home's value is built on more than just the property itself. Where it's located can have a big impact on its worth. When someone buys a home, they are also buying into that neighborhood, and neighborhoods with certain characteristics can be non-starters. How can you know what will raise or lower a home's value? The secret lies in property data.
Can Property Data Help Price a Home Correctly?
Property data and real estate data are the twin keys that unlock the true value of a home. Armed with knowledge about a neighborhood in addition to what buyers value, lenders, brokers and realtors can present houses with their best foot forward. To that end, it's important to know what decreases a home's value so you're always prepared. Here's a list of some of the top factors that can drag property values down:
Messy Neighbors - Neighbors can bring down a home's value by as much as 5-10 percent if they're lacking in curb appeal. Curb appeal matters a lot to buyers; an unattractive neighborhood sets the tone that this neighborhood isn't worth investing in. Things like peeling paint and overgrown lawns on one house can bring down the value of other houses on the block. Five percent might seem small, but that much off a home listed at $400,000 comes to $20,000.
Foreclosures - Foreclosures were found to cause an average price decline of $7,200 for every nearby home. Another study found that homes within 300 feet of a foreclosed residential property experienced a 1.3 percent decline in value; those 300 to 500 feet away saw a drop of 0.6 percent. The tricky thing about foreclosures is that you always can't tell when a house is in foreclosure upfront. Using a site like DataTree can give you behind the scenes information on things like foreclosures.
Sinkhole Damage - The presence of sinkholes in the area understandably makes buyers wary. Sinkhole damage can knock 30 percent off the asking price, according to a Florida real estate investor and realtor with experience selling these homes. Another way they can be costly? Sinkholes can make it difficult to get homeowners insurance.
Close Proximity to City Dumps & Power Plants - A study done in Cleveland, Ohio, found that houses near landfills experienced between a 5.5-7.3 percent decline in market value, depending on how close they were. Similarly, a 2010 University of California at Berkeley study found that neighborhoods within two miles of power plants experienced 3-7 percent decreases in value and rent. The size of the plant also changes how much the price of a house is affected.
Living in a Fracking Hotspot - Fracking sites also have a negative impact on real estate value. Noxious fumes and constant noise aren't typically considered perks, especially around homes, parks and schools. Furthermore, Resources for the Future found that Pennsylvania homeowners who used local groundwater for drinking lost up to 24 percent of their property value if they lived within 1.25 miles of a shale gas well.
Noise Pollution - Noise from planes passing overhead, nearby freeways or rattling trains is a sore point for many homebuyers. One study showed that houses on busy roadways experienced a 5-10 percent decline in value. Another study from Sweden showed that homes could experience a 0.6 percent price discount per decibel of noise pollution, leading to a 30 percent reduction of the overall home price in a noisy location versus a quieter one. It goes to show that, even in real estate, silence is golden.
Proximity to Billboards - No one wants to stare down a massive advertisement for a personal injury lawyer while sipping on their morning coffee. A study done by an urban planner found that homes within 500 feet of a billboard are worth $30,826 less on average at the time of sale than others farther away. The same study found that for each additional billboard within a census tract, there was a decrease in value of nearly $1,000. Doing a quick count of how many billboards are near a home can tell you how much you might stand to lose in property value.
Proximity to Detention Centers - Detention centers are unsightly and can be a source of traffic and noise. For example, median house prices in the same zip code as the Bexar detention center in San Antonio, Texas, are listed at $95,500 by the San Antonio Board of REALTORS. Houses just a 20-minute-drive away are listed much more favorably at $220,000.
Real Estate Data That Matters
It's crucial to have data on the neighborhoods you work in, given the many features than can affect a home's value. Having the best data helps you set the best price. DataTree collects property data throughout the entire U.S. that can give you the insight you need for your real estate work. Sign up for a free trial to see the possibilities for yourself.