There’s a reason why “location, location, location” is a tried-and-true mantra in real estate. A property’s value is heavily influenced by the company it keeps: its neighborhood. When working with clients, especially those home buyers relocating to the Bay Area, I first concentrate on lifestyle questions to determine which areas are the best fit for their family. Neighborhoods in the Bay Area can vary widely. Some have a more urban feel, where the downtown is a major hub of activity and nightlife. Other neighborhoods cater to families, offering amenities like city parks and walking/biking trails. Whatever your lifestyle, choosing the right neighborhood can affect property value at the time of purchase… and when you’re ready to sell.
Top Influencers to Neighborhood Value
According to the 2015 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends report, the number one factor that influences buyers to choose one neighborhood over another is quality. 69% of buyers polled said that the quality of the neighborhood impacted their decision.
Number two on the NAR list? Convenience to a job. 52% of home buyers select a neighborhood because of proximity to work.
Will Self-Driving Vehicles Affect Home Buying Decisions?
While driving around the Bay Area you may have noticed Google’s self-driving cars. These odd-looking vehicles with their radar-like sensors are all part of Google’s project to build prototype vehicles designed to make it easier for us to get around safely without having to drive. Of late I’ve had several conversations about this emerging technology and how it may affect real estate values. There are two sides of the argument.
On one hand, self-driving cars can make commute times more productive — basically extending the work day and reducing the stress of sitting in traffic. As a result, home buyers, with the aid of a self-driving vehicle, may be willing to live farther away their job.
The counter view? Corporations are already chartering buses and subsidizing vanpools, essentially providing the same stress reduction and productivity boost. Yet employees still aren’t thrilled with long commutes. So how will self-driving cars be any different? Whatever your opinion, self-driving technology isn’t expected to become mainstream for another decade or so.
- Overall affordability
- Convenience to family and friends
- Convenience to shopping
- Quality of the school district
- Design of the neighborhood
- Convenience to schools
- Convenience to entertainment, leisure activities, parks and recreational facilities
- Availability of acreage or larger lot size
- Convenience to health facilities
- Home within a planned community
- Proximity to public transportation and airport
All Things Considered
As I work with my clients, I also look for and point out other elements they may not consider.
- High renter population. This could mean a concentration of apartment buildings or rentals. It’s thought that if homeowners are in residence, there is more attention in maintaining or improving curb appeal.
- Cemetery or funeral home. While these neighbors are probably very quiet ;), some buyers can be superstitious or uncomfortable living near mortuaries and cemeteries.
- Hospitals & Fire Stations. Knowing that help is close by is one thing. Hearing sirens throughout the day is another.
- Power plants, substations and other utility facilities. Many of these types of facilities were originally built on the outskirts of cities away from residential areas. With population growth and the need for more housing, some neighborhoods are now encroaching on electrical substations, water treatment plants and other reminders of our urban and suburban infrastructure.
- Other unsavory elements. It’s no surprise that a Realtor.org study found that proximity to shooting ranges, homeless shelters and strip clubs negatively impacted home values and desirability.
Is there anything on the list that surprised you? Anything missing?
Photo credit: Daniel Hartwig