Factors Impacting Property Values
RealtyU -March 20, 2014 Every neighborhood is affected differently by a new building project and as a specialist in your market you need to know all the issues surrounding all potential building projects affecting your neighborhood.
During the last century homeownership has grown dramatically and along with this growth has come the inevitable “change of value” resulting from an outside force such as a building project. These projects range from roads to prisons to schools to airports but not every one has a positive impact on building values in the area. Some that, on the surface, would seem to have a positive impact can actually produce the opposite affect.
Knowing where to find future building project information is the first step but understanding and being able to communicate those facts and the potential impacts to the consumer is the critical part. That is part of the responsibility of being a Neighborhood Expert that needs to be an integral part of the home buying and selling process.
Take for example, a new prison has been approved for construction in the near future. In some areas this would have a negative impact on property values, such as a suburban community in a large metropolitan area. The stigma of having the incarcerated next to neighborhoods of families and the potential for a prison break will definitely have a negative impact on house values. But, the same prison being built in a rural area might be viewed as bringing jobs to the area and having a positive economic impact – resulting in a favorable impact on property values.
Staying on top of potential building projects in your market is a two part process. The first part is the simplest and involves a little research to find the local source for potential building projects. Most city-planning departments have future building projects posted on their website. If not, make it a point to research how you can be notified of projects that come about.
The second part involves finding third-party data on the pros and cons of the building project. It’s not the responsibility of the real estate professional to render an opinion, but rather to present the facts. For example, a statement that might be construed incorrectly would be that of an airport closure that would relieve the area of airport noise. However, if the area home prices are based on proximity to the airport, the perceived increase in value because of less noise would be incorrect. Presenting all the facts for both sides of the issue is the bottom line – you are not making the decision but you are the key element in making sure the customer has all the facts necessary to make that decision.