When you purchase a house, you want to be sure you are buying in a reliable neighborhood to ensure the property value of your new home and, therefore, financial investment. The state of your neighborhood is subject to change over the years, but there are a few indicators to alert you as to whether your neighborhood is ultimately thriving or declining. For example, if people are moving out in large groups, this could be a sign your neighborhood is steadily declining in terms of popularity and safety.
There are several ways for you to identify whether your area is continuously thriving or if there have been sudden changes forcing the neighborhood down an unfamiliar path. If your neighborhood has steadily declined over the years, it may be time for you to consider the idea of moving as well. You do not want to remain in an unfavorable area, as this could comprise your safety or jeopardize your home price estimate when selling your home in the future. More information about ways to assess your neighborhood is covered below.
Average House Price is Influenced by the Economy
If you want to determine whether your home is in a declining or thriving neighborhood, take time to assess the current economy. Some people may have trouble affording their mortgage payments if the economy is in a recession. Your neighbors may have to sell their homes as a result of becoming unemployed. Your home value can also decrease if the houses around it start to go into disrepair or foreclosure.
Your local economy plays a role in how your property value fares as well. If you live in a town where the local economy is centered around one main employer or one business to generate all the revenue, this could be an indication your neighborhood may steadily decline over the years.
When you are choosing an area to settle into, you may want to stay away from towns where the economy is contingent upon the survival of one company. Businesses can change at a moment’s notice and the economy may be dragged down by any potential closings or lay-offs.
When you live in a town where the local economy is built by various companies with reliable profits and employment opportunities, you are likely to reside in a thriving neighborhood as a result of business diversity. Buying a home in a neighborhood undergoing renovations to add infrastructure to the community can be a beneficial investment opportunity, as the home value will increase with the surrounding property. If your community is building a chain restaurant or store nearby, this can add revenue and boost your local economy. In doing so, your neighborhood becomes more desirable and prosperous so your property value increases.
Vacancy Changes Property Value
A clear indication as to whether a neighborhood is thriving or declining is the number of vacant homes in the surrounding area. If you have noticed several vacant homes in your area that were previously occupied, this may be a sign your neighborhood is falling into a difficult situation. People may choose to move for a variety of reasons, from job opportunities to a change of scenery, but several people moving at once tends to originate from the same source.
You may wonder, “How do home values near me change the value of my home?” A home value estimator will consider the surrounding properties when assessing your house. Your neighborhood may be prone to crime-related incidents, which can prompt your neighbors to look elsewhere to raise their families. Take time to assess the security of your neighborhood to determine whether the area is as nice as you thought it was when you originally purchased your home.
Related Article: Beginner’s Guide to Housing Assistance Programs
Likewise, when homes are left vacant, this can increase the possibility of crime, which will also affect a home price estimate. The first of people to leave may sell for a higher price than those who choose to wait. Those deciding whether to wait until the neighborhood is revived may find that it will take decades for the property value to return if the surrounding area is considered dangerous.
If you notice several “for sale” signs cropping up in your neighborhood, take time to speak with your neighbors about why they have decided to vacate the area. Your neighbors might be able to provide insight into what is happening in your area and this can help you determine if your home value may be declining.
A Home Value Estimator Considers Local Schools
“How does the school system help the value of my home?” Areas with good school systems are often accompanied by thriving neighborhoods. If you live in a town where there is a popular school with great reviews, this is a sign of a prosperous neighborhood. The better the school system, the better the housing options are.
Even if you do not have children or do not plan on having children, you may want to consider the prospect of living in a town where the school system is highly recommended to retain your property value. In doing so, you are residing in an area with positive reviews and higher quality homes. Property assessors and online estimators, like Zillow Zestimates, factor school systems.
If you already reside in a neighborhood with a good school system but you have noticed the presence of children in your area has decreased, this may be an indication the neighborhood is on a decline. When a neighborhood is safe and prosperous, you often find children outside playing in their front yard or riding their bikes around the neighborhood. If children are living in the area but they are not often seen playing outside, this could mean your neighborhood has become unsafe.
If you notice a steady incline of families to your neighborhood, this could be proof your neighborhood and property value are thriving. Parents catch wind of affluent neighborhoods from other parents, family members and friends and often flock to desired areas to ensure the safety and well-being of their children.
If these same families choose to move out after a few years, this can additionally indicate the neighborhood has taken a turn for the worse in recent times. You may want to monitor the situation for a period to determine what the cause for the influx or decrease of families may be before concluding the quality of your neighborhood.
Related Article: Four Ways to Get Cheap Internet and Cable