Many factors affect home values nationwide including demand for real estate, consumer confidence in the economy, job growth and interest rates. However, the actual value of your home can be dramatically affected by a combination of local factors which can cause its value to substantially depreciate. Below are three factors that can cause your home to accidentally lose its value.
- Unexpected developments
At times, new developments in the neighborhood can also cause your home to lose value. Sudden announcements of a sewage treatment plant or high voltage power lines being constructed near may adversely affect the value of your home. Likewise, having a landfill or dumping site situated nearby can also have a negative impact on the value of your home; affecting liveliness, and creating environmental and health concerns.
For homes known for their great view, this can change when a new development begins to come right in front of your property, obscuring your view of the Pacific Ocean, for example. This will also have a negative impact on the price of your house as the picturesque view is normally a selling point.
- Home renovations
The listing prices of homes are set by looking at what the comparable houses are selling for in the same market, and the number of bedrooms is one of the most important characteristic that is used to compare properties. When you begin to eliminate bedroom space, you will completely change the comparable value of your house in the neighborhood.
Additionally, by reducing the number of bedrooms in your home you will also reduce the number of potential buyers who might be interested in your home. There are individuals who will not look at two bedroom or three bedroom homes.
Other home renovations that could lead to the depreciation of your home include, removing closets and turning the garage into living space. If you want to sell your house and you`re not getting any interested buyers due to some of the renovations you had previously done to your home, you should contact a cash buyer. By doing this you will be to avoid high repair costs that are required to increase the appeal and value of your house. We buy houses DC and can help you avoid these repair costs and agent commissions.
- Short Sales/foreclosures decrease neighborhood value
Another factor that can lead to the accidental depreciation of the value of your home are short sales and foreclosures in your neighborhood. These negatively affect the value of your home by skewing the comparable house sales in the neighborhood down.
For instance, you`ve a 3 bedroom, 3 bath, 1600 square foot home. One comparable house sold for $400,000 and another sold for $350,000. A third house was foreclosed on and it was sold for $250,000. This foreclosure has a significant on the comparable prices and can decrease the value of your home.
Having short sales and particularly foreclosures on your street can cause the value of your home to decrease. Even if they`re not directly comparable, as in same number of baths and bedrooms and square footage, they`re in your immediate neighborhood, and as a result they can make the whole area depreciate in value.
If a neighborhood has many short sales or foreclosures, the prospective buyers might be hesitant to purchase there since they`re not sure if it`s stable and may also worry about the future value of their house.
Although the above factors, are out of your hands, there`re many things you can do to increase the appeal and value of your home. For example, buyers almost always select airy and light houses over dark ones. It`s therefore, beneficial to do whatever you can to create a sense of space and light in your home. Other factors, like a tidy lawn and fresh paint, can also have a great first impression.