The values of the houses in any particular area vary with a number of factors. These include:
- the supply of housing in the neighborhood
- the demand for housing there
- the location of the place: Is it in a scenic place such as a beach, or close to a major tourist attraction?
- the amount of crime in the area
Consequently there are factors that can threaten neighborhood home values; it is these that we will be examining in the sections below.
Bad neighbors
The bad apples can spoil the entire barrel; one bad person living in a neighborhood can upset the rest of neighborhood’s impression. His or her way of life may discourage people from moving in. Such bad habits can include:
- having large numbers of visitors who make noise partying and take up parking space
- having dogs that bark loudly
- not taking care of his property, having litter strewn everywhere, leaving the grass unkempt and the hedges poorly trimmed
In short, those who show a lack of consideration for their neighbors are not good people to live near.
Businesses in the vicinity
Threats to home values can also come from certain types of businesses being located nearby. A nuclear power plant, for instance, can decrease, by four to seven percent, the value of real estate located two miles away.
A landfill can have an even more devastating effect: as much as ten or even fifteen percent if it has been designated by the government as a “hazardous waste site”.
Laws and regulations
As a result, many communities have passed laws that regulate what can and cannot be set up within a certain distance of residential areas.
Almost every community has laws that prohibit people from having junk all over their yards and driveways, and registered sex offenders may be barred from purchasing a house in a neighborhood where families with children are living.
The price of a house has two meanings: For the owner it is a selling price, a way of making a profit, while for the buyer it is a buying price, a way of making an investment that should pay dividends in the future.
Having prices of real estate depreciate for the reasons above means, of course, that people will be able to spend less on new homes, but they will not do so unless they are desperate and cannot afford to spend more on a house.
