Anchors that will drag down your home’s value.

If you own a home, you’re probably especially interested in its value. Most likely, you pay attention to news reports about the local real estate market, watch with baited breath as your neighbor’s home sells, and even ask their favorite Realtor (like me) for a Comparative Market Analysis.

We also focus on ways we can increase our home value, like painting, replacing the roof, or even putting in an addition.

But there are just as many things that could potentially decrease the value of our home, too. Many times, these factors don’t even have anything to do with our house, and there’s nothing much we can do to control them.

Today, we’re going to be covering some of these home value anchors, as I call them. According to numerous studies and national home sales data, the presence of these elements will also drag your home value down. They’ve also assigned a percentage to the potential value drop (compared to similar homes in your county that aren’t near those things):

These things can act as anchors, dragging down the value of your home:

Substandard school:

Home buyers pay very close attention to schools in the area they’re considering, and that extends to schools that are underperforming or just plain poorly rated. In fact, if your neighborhood school is rated “bad” by GreatSchools.org (considered 3 out of a possible 10 or less), your median value may be a whole 22.2% less than comparable homes near top-rated schools! As a Realtor, I’m not allowed to give you specific school information, but I can refer you to some helpful resources if you wish.

 Hospital:

On the one hand, it’s great to have vital services and amenities easily accessible to where you live. On the other hand, it seems that people really don’t want to live near a hospital. Between the sound of ambulance sirens, police cars, increased traffic, and possibly even medical helicopters coming and going, a 2015 study found that homes in the close vicinity of a hospital earned 3.2% less when selling.

 Strip club:

It’s not hard to see why the presence of a “Gentleman’s Club” would bring an unsavory element to any neighborhood, and one study that correlated home sales near 2,000 strip clubs around the country found that they sold for about 14.7% less than similar homes in ore family-friendly confines.

 High crime rates (but not all types of crime):

According to a study conducted by Florida State University that was published in Regional Science and Urban Economics, there are two main types of crime; property and violent.

However, they discovered that only violent crime exerted a “meaningful” influence on reducing property values. In fact, a 10% increase in violent crime within a specific area has been proven to lower home values by up to 6%.

One thing that can spell a death sentence (pun intended) for the price of your house is if a particularly gruesome, strange, or highly-publicized crime takes place on or right near your property. 

Substantial billboards (and those with the wrong ads):

Of course, billboards are everywhere these days along highways, large intersections, and casting their shadow in commercial areas. We often just “tune them out” and don’t really notice after a while, but that same trick won’t work for your home values.

In fact, studies show that if a billboard (particularly large ones) are within 500 feet of your house, your home value would be $30,826 compared to similar homes without a billboard nearby.

Furthermore, it’s not just the mere presence of a billboard but what’s on it that cause your home to be worth less. Research suggests that billboards advertising strip clubs, politicalcandidates (either party!), laxatives (or other personal items), or public service announcements for drug addiction can further sink the value of homes in that immediate area.

Sinkholes:

Sinkholes are a relatively new phenomenon, with reports of the ground opening up and swallowing up cars, houses, and even whole blocks, in certain parts of the country (especially Florida). If this happens to you, insurance may pay for the damage to your home, but home prices in that area will likely never recover, as they take an average 30% hit virtually overnight – if they are sellable at all, even if they were not affected!

Dumps and power plants:

It may not be right next door, but no one wants to live near a dump. That’s the conclusion of a study that found that even if you live within two miles or less of a dum or landfill, your home could be worth up to 7.3% less than it otherwise would be.

Similarly, power plants raise some safety concerns, sometimes creating “cancer scares,” (Whether justified or not). So, homes within two miles of power plants will usually be worth 5.3% less.

High foreclosure density: 

It seems that foreclosures and other distressed properties (like short sales, bank repos, etc.) beget more foreclosures – or, at least lower property values. Even if you pay your mortgage on time every month and have plenty of equity, but those around you are in default, your value could fall by an average of $7,200. In fact, it’s estimated that for every foreclosure in your neighborhood within 1/8^thof a mile, your home value drops by 0.09% on average.

Fracking and water issues

Bad water? That probably means your home value will start going down the drain, as research in Flint, Michigan and other high profile cases shows. In fact, confirmed issues with drinking water, or just the presence of fracking or drilling operations that often cause those problems, will drop the area home values by up to 24% within a 1.25-mile radius.

Neighbor nuisance:

Sometimes, it’s neighbors blasting their music every night (and it’s never good music that they play loudly!). In other cases, they’re filling up their yard with junk, or inviting over 100 of their closest friends for a Civil War reenactment on their front lawn every weekend. Having bad neighbors can drop your value by up to 5 or even 10% when it comes time to sell!

Shooting range:

The presence of a shooting range in your neighborhood can exert a negative influence on your home value, as buyers may have safety concerns. However, the average drop in home value is only 3.7% (just a little more than having a hospital in your neighborhood), alluding to the fact that some buyers may actually feel safer with a shooting range in their proximity.

Casino:

For decades, homeowners, community organizations, and developers debated the positive economic benefits of having a casino open in a certain area. However, an intensive 2015 study by the National Association of Realtors found that the presence of a casino had an “unambiguously negative” impact on home and property values in the area. Furthermore, communities within a 10-mile radius of a casino experience higher than normal rates of foreclosures, crime, and other blight.

Home value “balloons” – 15 unexpected things that may increase your home’s price tag.

Every homeowner wants to see their value on the rise, and every home buyer wants to purchase a property that has the potential to go way up in price. Of course, buying a beautiful, big home in the best neighborhood possible will ensure that happens, and there are also countless blogs and articles that go over how to boost your home’s value by improving its curb appeal, remodeling kitchens and bathrooms, and the like.

However, there are some other, far more unexpected, factors that play into your home’s value. I assure you that although these factors may seem frivolous and even illogical at times, they are all based on credible data and studies into home prices.

Therefore, by paying attention to these fascinating home value “balloons,” you may be in for a value increase, too!

15 Home value balloons:

 1. Access to public transportation.

The American Public Transportation Association has found that market values are higher on average for homes that are located near popular public transportation hubs. Although it’s inconclusive just how much these properties will rise in value, one estimate is that they’re worth 42% more than comparable homes that are not near public transport. While that number seems stunningly high to me, there’s no denying that homes with easy access to transportation are more attractive to buyers.

2. A good school district.

There’s much debate about the influence good or bad schools play on home prices, and some think that it’s actually good neighborhoods that make a school, not the other way around. But studies have shown that there’s a direct correlation between higher-priced communities and good school systems. In fact, it’s estimated that buyers will pay between 1 to 10% above their budget for a home in a better school district.

Likewise, research shows that if a school is named a National Blue Ribbon School, the surrounding homes have the potential to increase by up to 5%.

3. The Starbucks Effect.

The presence of a Starbucks coffee shop in your neighborhood is such a clear boon to home values, that there’s a name for it! It’s true – homes that are less than a mile from a Starbucks increase in value 30% faster than comparable homes further away.

4. Other coffee shops?

Does that home appreciation magic extend to coffee chains other than Starbucks? Maybe, but it’s certainly not as prevalent. For instance, if your home is within a mile of a Dunkin Donuts, it’s likely to appreciate faster than the national average – but nowhere near the Starbucks Effect’s 30%!

5. A Trader Joes or Whole Foods.

A study by a national real estate website found that proximity to a Trader Joe’s appreciated in value up to 40% faster than homes further out, and a Whole Foods could increase your values by 34%. Of course, this price appreciation doesn’t happen immediately when one of these establishments opens next door but exerts its positive influence over time.

6. Close to parks and outdoor recreation areas.

If you’re lucky enough to live within a stone’s throw of a nice park, jogging trail, or even golf course (Ok, maybe you don’t want to be TOO close to the driving range!), then you could be looking forward to rapid home appreciation. A comprehensive study found that homes in those locations are worth, on average, 8 to 20% more than similar homes that aren’t close to these outdoor amenities.

7. Mature trees and well-manicured landscaping.

If your neighborhood enjoys mature trees, your home value may increase by up to 3 -10% more than similar structures in neighborhoods that don’t have them. Additionally, well-maintained landscaping in yards and public areas is at a premium and may boost your home’s value by 3-15%!

8. Street names – not numbers.

Believe it or not, your street name may factor into your home’s value. A New York Times study concluded that homes on streets with names – not numbers (like 3rd Street) – went up in value 2% faster. Likewise, if your address contains “Lane” or “Place” instead of just “Street,” then your home price may increase at a faster rate. Furthermore, uncommon or unique street names can also boost values more than ordinary street names.

9. Privacy.

It seems that we don’t want nosey neighbors and passer-bys seeing what we’re doing at home, so we’re willing to pay more for privacy! In a study of home prices in 1,836 counties across the country, properties that rated higher privacy scores also had higher values.

10. A wide lot.

Often referred to as “frontage,” homes with particularly wide lots see a boost in their values in many markets around the country. However, country and suburban properties see the most prominent value gains by wide frontage, not city properties.

11. Backyard views.

Curb appeal and street views are important but don’t neglect the view from your backyard, too. In fact, a national study found that homes with larger view angles (no matter what they saw from that vantage point) routinely had higher values.

12. A down-sloping backyard.

One study measured housing prices cross-references with the slope of their respective backyards. They found that homes with downhill slopes in their backyards sold for significantly more than homes where the backyard sloped uphill.

13. Military base.

A study by a national real estate website found that homes near military bases went for a premium, as much as 34.8% higher than the median home average in those areas!

14. Drop in crime.

Of course, we can assume that high crime rates will drop a home’s value. But what’s interesting is that research shows as those same crime-blighted communities start to clean up their streets, property values will rebound accordingly.

15. Walkability.

Homeowners love being able to leave their front door and walk around their community, particularly to local restaurants, coffee shops, or other stores and amenities. Studies show that this “walkability” feature is so attractive that it actually improves neighborhood home values.

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