We all hope our homes will hold their value over time, but in the short-term, home values often fluctuate up or down depending on a myriad of factors. Much of the value of a home correlates with the neighborhood and surrounding area in which it is located.
Five ways that characteristics of your neighborhood may contribute to a change in your home’s value – good or bad – include:
- Access to jobs
- Features that stand out
- History of home prices
- The visual appeal
Access to Jobs
One of the primary characteristics that helps your home to retain or increase its value is whether the area has a low unemployment rate. You also want to consider the average incomes of the individuals and households in the area. The presence of universities and colleges, government agencies and mediums such as TV, radio and publishing companies are other community features that increase access to jobs and the values of homes. You can find neighborhood information about employment options in an area using sites like the U.S. Bureau of Labor Statistics.
When you chose a hotel or resort to stay in during your family vacation, you probably considered the amenities the resort offers and things to do in the area. The same should hold true when you are looking for a home to purchase. Attractive features will help the home hold value and hopefully, increase its value.
What you consider an amenity may not be an amenity to someone else. However, some of the amenities that tend to help a home’s value include:
- Parks and recreational facilities
- Low crime rates
- Access to retail shopping
- Architectural features
- Educated residents and good school districts
[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]Features that Stand Out
Every community has a reputation for something. Make sure the area in which you buy a home has a good reputation and one that adds value to the home. For example, some families fight to get into certain neighborhoods because they’re in the best school district in the region or state. High demand for an area can help to not only maintain home values, but actually increase home values, particularly when the demand is so strong that home buyers are bidding up prices on homes.
History of Home Prices
The best predictor of future behavior is past behavior. That’s why it’s important to conduct some research on what home values have done in the area in which you’re interested in buying. Look at both the long- and short-term home values. When there were increases or dips in values, find out what was going on in the neighborhood or the economy during those times. Some of the best neighborhoods to buy in are those that have relatively steady home values.
Drive through the neighborhood at various times of the day and night for the visual appeal test. If you drive through the neighborhood during the day and nobody is outside, then it may look like a quiet and peaceful neighborhood. If you drive through at night and see groups of teens hanging out on the corners and making a lot of noise, the visual appeal and value of the homes in the area may suddenly change.
While these fives items are not a fail-proof test for finding a home that will hold or increase in value, they may be helpful to consider when making your home purchase.