When you’re considering buying a house, you may be daydreaming about the number of bedrooms, the floors and countertops, whether or not it has a fenced-in yard, finished basement, or two-car garage.
But when you evaluate your home-buying budget, you may be surprised to realize how location and community features can drive up property values.
Location is usually the number one item on a home buyer’s wish list. Buyers may want to be in an area near award-winning schools, parks, shops, restaurants, recreation, public transportation, and more. However, each of these perks to homeownership comes with a premium.
On the plus side, these elements can also add to the resale value of the home should you decide to sell it in the future.
Here are some examples of how community features can increase property values.
Schools are the number one influencer for today’s home buyers. With bountiful information available online about school districts and school ratings, home buyers do their homework, often choosing the location of their home-based solely on the education system.
Even buyers who don’t have students living with them can benefit from living in an area with an outstanding public education system. Schools with high test scores, high completion rates, and low teacher-student ratios help sustain and appreciate homes in their district. Private schools can have the same effect.
Homes located close to well-performing schools tend to be more expensive, but even those who can afford the higher price may find that the demand for houses in that district is so high that it makes it difficult to find a house for sale in that area.
Studies estimate that each dollar invested in public schools in a community adds $20 to home values.
The National Bureau of Economic Research states there’s an indisputable connection between school expenditures and home values.
Additional researchers concluded that school districts in affluent neighborhoods, where home values are in higher price points, spend their funding more efficiently.
School districts also excel when parents and the community support the system, which is more common in wealthier neighborhoods.
Parks, Preserves, Open Spaces, Greenbelts, and Trails
Living near parks is a high priority for many homebuyers, especially those with young household members. Parks, open spaces, greenbelts, and trails invite residents outside, to be active, and to engage with other members of the community.
Many master-planned communities are designed with parks and trails in mind. When a neighborhood is embellished with well-maintained parks, mature trees, and soft, grassy areas, there’s a higher property value because you’re paying for those amenities and competing against other motivated buyers.
Living near a park can boost home values by eight to 10 percent, up to 20 percent for a home adjacent to or facing a park, and inner-city homes within 1/4 mile of a park have increased values of 10 percent. Furthermore, houses next to a more expansive greenbelt resulted in a 32 percent increase in home values, on average.
Homes shaded by mature trees, undeveloped tree-covered areas, lots lining up to wooded preserves, or heavily wooded land nearby can also add to the price of a house for sale.
Public Transportation, Freeways, and Highways
Many forms of public transportation can cause the price of a home to escalate.
People rely on buses, cable cars, commuter trains, light rail, monorails and tramways, ferries and water taxis, trolleys and streetcars, and more.
If you rely on public transportation for your commute, it’s important to you that your house is situated conveniently near public transportation. Just know that there’s a price to pay for that convenience.
Retail Stores and New Construction
Having your home near an array of stores is convenient, but can also raise a home’s value considerably, depending on the store brand.
Stores like Aldi, Costco, Kroger, Sam’s Club, Sprouts, Starbucks, Target, Trader Joes, Whole Foods, and other big box stores increase home values substantially.
If a house is within 1/2 mile of a Walmart, that value can go up by as much as 2-3 percent.
Locally owned small businesses and boutiques can also positively influence home values.
New construction also affects house prices. While it may seem inconvenient during the construction phases, new stores and shopping centers can revitalize older neighborhoods, also increasing those home values.
These stores all contribute to the wealth of the community by providing ample employment opportunities.
Living near a variety of restaurants with an eclectic selection of menus is a boon to homeownership, especially if those restaurants are within walking distance or just a short drive away.
Imagine being able to choose from your favorites like Applebees, Olive Garden, Outback Steakhouse, IHOP, Denny’s, and other recognizable restaurants.
Then, there are those quaint, little-known-about hole-in-the-wall restaurants that are hidden treasures in the community.
On average, Americans eat out between four and five times per week, which makes homes near restaurants more attractive to buyers, thereby driving up demand, and raising home values.
Master-Planned Communities and Property Values
Master-planned communities are created with features and amenities designed to drive up home values.
Master-planned communities may have gated entries, community pools, fitness centers, clubhouses, golf courses, man-made lakes for swimming, boating, fishing, and more.
These communities also tend to be close-knit with special events like parades, block parties, and festivals.
Master-planned communities encourage a lifestyle by design with everything you need close to a well-crafted home.
But it comes at a hefty price in real estate.
Homeowners’ associations govern many master-planned communities. While you may have the added expense of HOA fees, generally, HOA managed properties tend to increase property values.
If you’re a first-time homebuyer, you may be unaware of how location and community amenities can increase home values.
Your wish list may include an urban or suburban setting, in an excellent school district, near stores, with a variety of restaurants to choose from, convenient access to public transportation, and plenty of places to enjoy the outdoors like parks, trails, and open spaces.
But your budget might not stretch that far — and if it does, it may be challenging to find houses for sale that match that criteria due to high demand.
You may find that you have to compromise on either home features such as square footage, number of bedrooms, yard, or garage so that you can afford the location you want. Or, you may have to sacrifice location to have more of the features you’d like in your home.
Talk with your professional real estate agent at length about how schools and community features can raise home values, and how much real estate you can afford to buy.
Have Questions? Ask JTC Real Estate!
JTC Real Estate is the best source of information about the local community and real estate topics. Give Jane Caddell a call at 562-331-3301 to learn more about local areas, discuss selling a house, or tour available homes for sale