What Impacts Home Value?


If one of your neighbors experiences a foreclosure, it will drag down the value of your home.

If that home is within 250 feet of yours, count on losing 1 percent of the value of your home, according to a 2010 Massachusetts Institute of Technology study.

Although that sounds puny, let’s take a look at it in number form. One percent of the value of a $300,000 home is $3,000. Through no fault of your own, a neighbor’s foreclosure may cost you several thousand dollars when you sell your home.


Since your house’s value is based on the sales price of comparable homes in the area, owning the most expensive home or over-improving your home may impact your home’s value.

The best improvements you can make to a home to increase its market value are cosmetic, but if you already own the most expensive home on the block, you most likely won’t recoup any of that money when you sell. The experts at recommend keeping your home’s value just below the top of the market in your neighborhood.


Before purchasing a home it’s important to know what the city planners have in store for the area. A power plant has a significant impact on nearby homes, according to a University of California at Berkeley study. The study shows that a power plant within 2 miles of a home decreases the value between 3 and 7 percent. The larger the plant and the closer the home is to it, the more impact it has on value.

Move into a neighborhood near a landfill and your home loses 6 to 10 percent of its value compared to comparable homes not similarly located, according to a study performed by the Pima County, Ariz., assessor’s office.

If that landfill is considered a Superfund site, where hazardous waste is dumped, your value will be 15 percent less than similar homes in other neighborhoods.

Rental Properties

“Rentals within one-quarter mile of a sold home had a negative impact on price,” claims Wendy Usrey in her master’s thesis for the Colorado State University Department of Economics. The threat to your home’s value from rental homes may be as high as a 15 percent drop in value, depending on the density of rentals, according to U.S. News and World Report. Interestingly, Usrey claims that single-family rental homes between one-quarter mile and up to one-half mile away actually increase a home’s value.

Transit Corridors

Whether a home that is near a transit corridor, such as a subway station or freeway, loses or gains value depends on several factors.

Overall, most experts agree that homes near transit corridors that don’t have direct access to the corridor decrease in value, while those with direct access increase in value.

One aspect the experts find it hard to agree on is how much a home’s value is impacted, with ranges between 3 and 45 percent, according to the Center for Housing Policy.

Open Space

Homes near parks and open space may be more valuable than similar homes not near these features. In 2007, John L. Crompton with Texas A&M University’s Department of Recreation, Park and Tourism Sciences, wrote about what he calls “the proximate principle.” This principle states that “the market value of properties located proximate to a park or open space (POS) are frequently higher than comparable properties located elsewhere.”

He also found that the type and condition of the park or open space influences the amount of value added to the home, with actively used parks actually causing a decline in value. Those parks and open space areas that are not used frequently generate the most in added-value to properties nearby.

There is little current homeowners can do to protect their home from some of these negative impacts on value. Homebuyers, on the other hand, with adequate due diligence, may avoid purchasing in an area where outside influences may affect the future value of the new home.

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Posted In: EHR News

About The Author

Joseph Sabeh Jr.

Please let me introduce myself, I am Joseph Sabeh, Jr a full time licensed professional realtor. I have been with Executive Homes Realty for over 13 years and was trained by my late father and Broker, Joseph Sabeh. I recently incorporated the company and we moved the office to 43513 Mission Blvd just last summer. I could not have found a more honorable place to work. After earning my experience selling high end Ralph Lauren suits and studying business management in southern California, I decided to pursue my dream of selling real estate and working with my father. He had already had such an excellent reputation and established a niche market of high end clientele that catered to the very best. I wanted to become the consummate professional just like him and have strived to become just that being just a phone call or email away from getting back to my client’s immediate needs! Known by my clients for my tenacity, perseverance , and excellence in negotia- tion(Certified Negotiation Expert), I have always strived to meet my clients high demands and goals. As a result of my professionalism, I have achieved an extensive portfolio of referrals from past and present clients. I credit my current values from my upbringing of my parents and the credit is due to them without question. Their integrity, pride, and willingness to sacrifice for the better of my life and my sister’s always left a mark on me that one day I will pass on. Their desire to achieve a better life and live it to the fullest is one that some families dream of and I certainly am appreciative of all of the education and etiquette I have learned from them both. I have sold condos up to 3.2 million dollar homes and I am here for any and all of your future real estate needs and wishing you the very best experience in your future real estate endeavors with me.

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