From Engineering on May 22, 2009 in General
Photo credit: RickC
One of our Readers recently posed a question via the Comment function. Heres what they wrote:
My neighbors are complaining about a garden in the neighborhood, which is also being taken care of by another one of our neighbors. There are some people who insist that this garden is bringing down property values, and I strongly disagree. I think that what brings down property values are abandoned homes and trashed out lots, and also reassessment values. Am I correct?
In an article called Home Buyers Guide: Assessment vs. Market Value, writer Ann MacDonald says that market value is determined by looking at comparable home sales in the local area, competitive home listings, the square footage, location, amenities, and condition of the property. Assessment values are calculated according to formulas specific to the county and/or city in which the property is located—dealing with factors such as purchase price of the home, replacement cost of the home, and land value. This general information points to the effects of the condition of neighboring properties, although it doesnt speak to specifics.
Another article, Identify Good Real Estate Investment Property, gets down to the nitty gritty on Buy-and-Sell-House-Fast. The old saying in the real estate business is that the three factors in selling a home are location, location, and location. What is the location like? No matter how wonderful the house is, youll have a difficult time selling it for top price in a bad neighborhood.
Things such as the abandoned homes and trashed out lots mentioned by our Reader would most certainly have an adverse effect on the neighborhood, and thus the perceived value of the homes there. What these neighboring conditions indicate is that the area is in transition, and likely not for the better. However, with the changes in todays real estate market affecting so many homeowners, abandoned homes and lots that are not being maintained may not affect a neighborhood as much as during other prevailing market climates.
Determining whats really likely to be occurring in a neighborhood is a process of discovery. Ask your neighbors what they think is going on. In general, keep your ear to the ground for not only your neighborhood but the surrounding areas. Talk to real estate agents who have listings close by. Home Gain, another source on assessing property values says, Your homes value is a moving target. A qualified real estate agent can conduct an in-depth price analysis of your home based on recent home sales in your neighborhood.
As far as our Readers neighbors concerns about the garden in question, it may be that they are understandably edgy about anything that might appear to be adversely affecting the neighborhood as a whole. With the fluctuations in the overall real estate market, this might be especially true for people who bought their homes when property values were higher than they are now.
Talking about the situation with the people who own the garden property is a reasonable first step. Many people tend to shy away from raising uncomfortable issues with their neighbors, but in many cases these things can be approached with sensitivity and openness and resolve in ways that strengthen a neighborhoods value by building a sense of community and cooperation among its residents.