We’ve all heard the real estate mantra: location, location, location. It’s true, where you live is important for many reasons. It gives you a sense of belonging, social structure, and emotional well-being. There are also more tangible reasons to carefully consider when scouting the location of your home. Location significantly impacts real estate values, meaning desirable neighborhoods can cost a lot to buy into but also make a lot of money if you need to leave. Here are some things to think about.
The schools in a certain area can have a significant impact on home value. Schools perceived as having a high quality of education and positive outcomes, such as high graduation rates and college acceptance rates, can attract families to the neighborhoods. Buyers are often willing to pay more for homes in areas with these schools, which can drive up home values in those locations.
Various organizations often rank schools based on academic performance, teacher attributes, and other factors. Schools are usually funded through property taxes, meaning areas with top-notch schools may have higher property taxes. While this may deter some homebuyers, it can attract others signaling the community values education and is willing to invest in it.
Many homebuyers also look at the amenities available near neighborhoods. Properties located near desirable amenities, such as parks, restaurants, shopping centers, and entertainment venues can be perceived as a higher value due to their proximity to these attractions. This is especially true for properties located in urban areas if walkability and convenience are highly valued.
Properties that are near natural features or have scenic views such as the mountains of WNC can also have higher values due to their aesthetic appeal. Areas with lower crime rates, desirable schools, and other safety features can also have higher real estate values. Homebuyers often prioritize safety and security when choosing a home, especially if they have children.
It’s important to remember that underserved communities continue to experience disparity in accessible amenities as they can be priced out of the ability to become homeowners in these areas. Increased attention to inclusiveness can have a positive effect on communities.
Property taxes are the most obvious when talking about homeownership. Property taxes are assessed based on the value of a property, but income taxes can also have an impact on home values. Higher-income taxes in an area can lower the value of a home, as buyers may be less willing to pay more for a home if they will be paying more in taxes.
On the other hand, property tax deductions can have a positive impact on home values. In areas where property taxes are high the ability to deduct those taxes from federal income taxes can make owning a home more affordable and attractive. This can increase home demand in those areas and drive up home values. Local tax rates, such as sales tax, can also impact home value by increasing the desirability to live in areas where they are lower.
A Note About Gentrification
We would be remiss if we didn’t mention some of the concerns about gentrification and home values. Gentrification is a complex issue that can significantly impact low-income and historically marginalized communities. Acknowledging gentrification is a critical first step in addressing its impacts. Here are some ways that communities can recognize gentrification:
- Listen to community members.
- Acknowledge the history of the neighborhood.
- Conduct community impact assessments.
- Develop equitable housing policies.
- Support local businesses and organizations.
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