We’ve all heard the real estate mantra, “Location. Location. Location.”
This is the simple answer to a complex question asked by nearly every home buyer of the past 50 years: “What are the top things I should consider when I search for a home?”
In a nutshell, “location” refers to a very simple question, “Is the home located in an area where a large number of people would want to live?”
Why is the location of a home so vitally important? With large numbers of people wanting to live in a particular area, the demand for homes in that area will outpace the available supply of homes, which will result in increased prices over time. The Law of Supply and Demand never fails to deliver!
Purchase a home in a great location and you may see the value of your home increase dramatically in just a few years. Purchase a home in a terrible location and you may see home prices decline, remain the same, or increase ever so slightly over the same time period. As one can see, “location” is vitally important because it is the number one factor that will determine if buying that home was a good or a great investment.
But what factors should you consider in determining whether or not a home is located in a “good location?”
Quality of the Neighborhood
Most people want to live in a nice neighborhood, one with well-kept homes, quality roads, and in a great school district. The location of the neighborhood, including its accessibility to major highways and stores, is a key factor in the desirability of a neighborhood. Most people will never spend $400,000 on a home with potholes in the road large enough to sink a four-wheel drive truck, and those spending top dollar for a home also don’t want to live adjacent to a major highway with road noise and dust from traffic.
But when looking at the quality of the neighborhood, one also needs to consider what the neighborhood will be like in the future. Neighborhoods clearly can be on an “upswing” or in a “downturn.”
A neighborhood on an “upswing” is still in the process of being developed, with many more new homes being built, which can spur even further growth (roads, stores, schools).
A neighborhood in a “downturn” will have a large number of older homes, but few if any new homes being built. Unless these older homes are well-maintained or new homes are being built, statistics show the neighborhood may begin to decline over time.
Another major factor to consider is the economic growth of the area—existing and planned. More good jobs in an area will result in a much stronger demand for homes within a short driving distance of those high-paying jobs.
Value of Home in Comparison to Other Homes
The value of a home in comparison to other homes in the neighborhood is also a very important “location” consideration.
A good rule of thumb is that you will want to avoid purchasing the most expensive home in a neighborhood. Why? Years of research have demonstrated that not only is the most expensive home typically more difficult to sell in a neighborhood, but this home also tends to increase in value much more slowly than more moderately priced homes in the area.
Think about it. Do you really want to purchase a home that is already priced at the very top of the real estate market for that neighborhood, or one that has room to increase in value as improvements are made in the home?
If you’re looking at your home as an investment, this is an easy answer.
Location of the Home in the Neighborhood
This is probably the second most overlooked aspect of “location.”
Two similar homes in the same neighborhood may differ in market value by tens of thousands of dollars simply because of the location of the homes inside the neighborhood.
Factors such as being located at the quiet end of the street or on a cul-de-sac, and even the quality of the view from the home, can result in a higher market value than other homes in the same neighborhood.
Imagine two similar homes in the same neighborhood, one overlooking a busy city street and one at the back of the neighborhood with a view of the beautiful surrounding mountains or valleys. Which one do you think will attract the most potential buyers?
Again, the location of a home is very important, even in the same neighborhood.
Utilities/Internet/Cell Phone Reception
In the last few years, we have seen more potential buyers walk away from what they first thought were their “dream homes” because of the lack of utilities, lack of internet accessibility, and even poor cell phone reception. Today, these are probably the most overlooked factors in “location.”
With more people working from home and using the internet to connect with potential clients and customers regionally and world-wide, having access to high-speed internet is becoming a necessity for many. For some home buyers today, not having high-speed internet is an immediate deal breaker.
A few buyers also consider the availability of utilities, such as city water/sewer and natural gas, as a major factor in deciding which homes to purchase. In addition, the strength of their cell phone signal is now nearly always checked by potential buyers, especially those who use their cell phones for work. As the availability of utilities, access to high-speed internet, and the quality of the cell phone signal are not issues a homeowner can typically control, these are definitely “location” issues in today’s high-tech world.
Landmark Realty Services will take the time—and great care—to help you find your dream home in the perfect location for you and your family! Call us today at 304-842-5298 to schedule an appointment with one of our wonderful real estate professionals!