6 Ways Your Home’s Value Could Decrease That Have Nothing To Do With Your House
Written by
Emily Fowler
Edited by
Jenna Klaverweiden
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No matter how much work you put into maintaining and improving your property to make sure it holds or increases its value, there are certain factors beyond your control — and sometimes even beyond your front door — that can significantly impact your house’s worth.
Here are several ways your home’s value could drop without you even touching a hammer or a paintbrush.
Also see 10 ways people skyrocket the value of their homes.
Bad Neighbors
Unfortunately, the neighbors you’re stuck with can do more than just irritate your family. They can also lower your home’s value.
Whether it’s the house next door that’s falling apart, a yard filled with junk, or constant loud noise from parties or barking dogs, bad neighbors can have a real impact on your home’s market appeal.
Neighborhood Foreclosures
Even if your personal finances are in good shape and your home isn’t at risk of foreclosure, any nearby foreclosures can severely impact your home’s value. When appraisers determine home values, they use comparable sales — homes recently sold in your area.
A foreclosure typically sells for much less than market value, driving down the comparable sales and, by extension, your home’s worth.
The values of homes neighboring a foreclosed property have been proven to drop 1% on average for every 7% drop in the value of the foreclosed home, reported Veterans United Home Loans.
Proximity to Certain Facilities
There are certain businesses that can hurt the value of your property if you live close by. Studies have shown that homes close to power plants and cemeteries, for example, can cause a drop in value.
The perception of safety, cleanliness and peace is critical for homebuyers, and nearby facilities that disrupt these could make your home less appealing.
Poor School Ratings
Many homebuyers prioritize living close to good schools, especially if they already have children or are planning to have a family. If the local school district‘s rating plummets, expect your home’s value to take a hit as well.
Even if you don’t have children yourself, be aware of the school ratings in your area, and know that declining school ratings can lead to fewer interested buyers when you’re looking to sell.
Local Crime Rates
A sudden spike in crime or a long-term increase in criminal activity can scare off potential buyers and decrease your home’s value. Whether it’s petty theft, vandalism or more serious crimes, no one wants to live in a neighborhood where they feel unsafe.
Higher crime rates can reduce a property’s value, and buyers are also wary of homes near registered sex offenders.
Market Conditions
Even in the best neighborhood, wider market changes can have an influence on property values. Factors like rising interest rates, economic downturns and an oversupply of homes in the market can all drag down property values.
If you’re trying to maintain your home’s value, don’t look at just your property itself. Be aware of external factors that can have a surprising and significant impact.
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