The value of your property is a complex mix of economic factors as well as highly subjective value judgments. Once all of these are considered, you may have a decent idea of what is considered valuable in the market. Are you looking to sell or buy soon? What are all the various factors, both objective and subjective, that affect the value of your property?
This is one of the fundamental factors that influences the value of property. Location creates demand and demand increases price. Although location could be a matter of preference, there are some concrete reasons that keep property values high in certain locations:
--The schools that are ranked the highest and have the best reputation.
--Accessibility to transit veins. The easier it is to commute via car, train, bike or foot, the better. Conversely, being too close to the infrastructure (like a train track or right next to the highway) can have the opposite effect.
--Proximity to amenities like grocery stores, shopping, recreational venues, restaurants, etc. Starbucks, Trader Joe’s and Whole Foods are especially good for property values.
Besides location, the home is incredibly important in how your property is valued. A variety of elements contribute to this:
--As a base, home prices are calculated according to their size in price per square foot. The larger the home, the larger the base value. Usually, garages, unfinished basements and attics are not counted in this calculation. Conversely, bedrooms and bathrooms are valued highly.
--The age and condition of the home are also incredibly important. The newer the home, the less likely there will be problems with the electrical system, the plumbing, or something like the roof. The better condition of the house, the less the buyer has to worry about when they move in and the higher the value.
--The amount of interior and exterior updates and upgrades affect the value of your home.
Generally, the better the view, the higher the property value. Homes with a sublime view of the mountains, the lake, or the ocean are much more in demand than homes with a view of the neighbor’s garage or kitchen. Even the view of a park or important yearly events like a parade or fireworks can raise the value of your property. Make sure to check with local authorities to research what the plans are for vacant lots or adjacent properties. That ocean view could be blocked by a hotel and decrease the value of your property once you have bought it!
The Local Market
Supply and demand are an important factor in the value of your property. The fewer available homes with more buyers than sellers increase the value. Conversely, the more homes selling in the area with fewer buyers decreases the value. In a seller’s market, the homes move quickly; however, when it is a buyer’s market, the homes are slower to sell which can further decrease the value, since the more days the house is on the market, the more the buyer may perceive there is something wrong with it.
Besides what is happening in your local market, broader economic forces can also influence the value of your property. A rise in unemployment or a decrease in wages nationwide can affect the amount of buyers who are willing to invest in property.
The value of a property is not always logical. A variety of subjective and—frankly—irrational factors can also influence this. For example, a death on the property is not valued highly, especially if the property is the site of a murder, suicide, or documented haunting. Some states require these facts be disclosed but others don’t. It’s probably best to keep the skeletons in the closet in order to keep the property value up!