What’s in a neighbor? Well, the answer can be devastating. Your neighbor may be costing you money.
There are many different types of “bad” neighbors. We all know this first ones that come to your mind: the people who don’t mow their lawn or maintain their property, the “haunted house” of the neighborhood; Or the neighbor that is a convicted sex offender; Or the “party” people, the neighbors who are always having loud parties with dozens of cars parking up and down the street with the guests staying until the wee hours of the night. Then there are the others that we don’t think about as quickly; the commercial building with equipment all over the property; the warehouse with trucks loading and unloading all hours of the day; the foreclosed homes.
These properties DO effect your property value. According to a Yahoo Finance article they effect it substantially. Read Below:
Power Plants. The data is fairly clear on the impact of power plants on nearby home values — it usually hurts them. A study from the University of California at Berkeley shows that home values within two miles of a power plant can decrease between 4% and 7%.
Landfills. A study from the Pima County (Arizona) Assessor’s office shows that a subdivision located near a landfill (and all other residential factors being equal, like house size, school quality and residential incomes) loses 6% to 10% in value compared to a subdivision that isn’t located near a dump.
Robert A. Simons, an urban planning professor at Cleveland State University, says that if you live within two miles of a Superfund site (a landfill that the government designates as a hazardous waste site), your home’s value could decline by up to 15%.
Sex Offenders. Living in close proximity to a registered sex offender is one of the biggest downward drivers of home values. Researchers at Longwood University’s College of Business & Economics conclude that the closer you live to a sex offender, the more your home will depreciate. In the paper, Estimating the Effect of Crime Risk on Property Values and Time on Market: Evidence from Megan’s Law in Virginia, Longwood researchers say, “the presence of a registered sex offender living within one-tenth of a mile reduces home values by about 9%, and these same homes take as much as 10% longer to sell than homes not located near registered sex offenders.”
Delinquent Bill Payers. One surprising way that neighbors can bring down the value of surrounding homes, especially in town home or condo communities, is by not paying their maintenance fees or their mortgages. “Bad neighbors bring values down by not paying their maintenance fees, in some cases their mortgage payments, and not maintaining the home’s appearance,” says Pordes. “These homeowners usually do not care about real estate values.”
Foreclosed Homes. Perhaps the biggest single factor that drives nearby home values down is a foreclosure. A recent study by the Massachusetts Institute of Technology concludes that a neighbor’s foreclosed home can slash the value of homes within 250 feet of the foreclosed properties by an average of 27%. Says Federal Reserve Governor Joseph Tracy recently in his economic outlook for 2011: “The growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market… Problems in housing markets can impact economic growth.”
Lackluster Landscaping. Studies show that lawn care has a big impact on surrounding home values. Virginia Tech University released a report stating that pristine landscaping can jack up the value of a home by 5% to 10%. But if the lawn looks like it just hosted the world rugby tournament, it can be a green thumb to the eye of local home prices.
Closed Schools. Sometimes, neighborhood problems can stem from local government action. For example, if a cash-strapped city or town closes a neighborhood school, that can easily steer home values south. The National Association of Realtors says that 75% of home shoppers, the quality and availability of schools in the neighborhood is either “somewhat important” or “very important.”
Bobbie Files, C.D.P.E.
Certified Distressed Property Expert
Your Bristol and Plymouth County Realtor
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