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Property Value Heading South? 10 Issues Hurting Your Home’s Worth
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Even as you read these words, your home may be losing value – not at all what you hoped for (or planned) when you originally purchased it. Wondering how to increase property value? Review the 10 critical factors that can exert a negative influence on your home’s value:
Basic Economics: Supply and Demand
For better or for worse, the time-tested economic interaction of supply and demand plays a major role in influencing the value of your property. We have all heard this many times before: low demand and increasing supply will result in shrinking prices as fewer buyers compete for swelling numbers of available properties.
Basic Economics Part 2: Interest Rates
The vast majority of property buyers rely on financing to purchase homes. Mortgage lenders see most applications when interest rates are low, making the fluctuations of interest rates a factor to have the most profound effect on your home’s value.
Tell Me Your Age and I Will…
… tell you that if you are a property – in a relatively good condition – you are more likely to trade hands faster if newer. All properties deteriorate over time and require maintenance to be kept in good repair. Newer homes will normally call for less maintenance, their major structural and construction elements commonly in better repair.
As Local as Market Gets
The state of the housing market in your community will also have a strong influence on your home value. Even the most subtle of fluctuations in the local market’s economic circumstances – can cause a downward correction. This factor can also be scaled up: national economic challenges can result in diminishing property values.
Amenities and Features Nearby
Proximity to transportation, shopping, dining, and comparable properties can affect your home’s worth. If your property is far from neighborhood amenities, its value may diminish. If the area’s development, the best restaurants, the most visited bars, shy away from your immediate area, your home value may be negatively affected.
Your Property’s Past
Are storms common in your area? Was your home at some point in the past a breeding ground for mold? Was the local fire department called in to put out a small fire in your shed? Did anyone pass away in your home’s history? The public record is unforgiving, and potential buyers are becoming savvy researchers, carefully digging and sifting through the records, no matter how outdated some of them may be.
Your Property’s Past Sales
When considering how to increase your home’s value, you may also take a step back and look into its past sales performance. How did your property fare in the past? What price points has it commanded?
If the numbers fail to show a steady progression through time, your home’s value may come with a red flag and raise questions about whether its top pricing levels can be attained at resale.
Your Home Is (Most Likely) Not an Island
One of the most crucial influencers of a property’s value, your home’s location is the very reason behind its appeal. Naturally, and to the highest extent, your neighborhood’s schools and crime rates may have an impact on your home’s value.
Understanding How to Increase Property Value
The size and appeal of your home can play a decisive role in it being able to attract buyers in a specific range of “price per square foot.” Larger homes will naturally command higher price points, but so will homes with neutral layouts. Your home’s worth may be negatively impacted by any awkward spaces or elements that appeal to a specific taste.
All other things being equal, your property’s value will likely be determined by its usable space. Usable square footage typically excludes unfinished basements, attics, and garages.
An outdated home can gain value through updates and renovations: thoughtful kitchen and bath renovations will enhance a home’s value to the largest extent. Increasing the home’s curb appeal can also increase its value.
Changing Regulations
Planning and building regulations depend on local and national authorities and as such may be subject to change and may differ from one area to another. The vast majority of construction and in-depth renovation will require approvals and permissions to be issued by these authorities. In jurisdictions with fewer requirements, the value of property tends to be higher.
Your answer to a property with a rapidly diminishing value? You may want to seek out a no-obligation quote for a cash offer on your home.
