These 6 Factors Will Really Impact Your Property’s Value
The value of a home is affected by many factors. These include the property, external circumstances and the state of the house. economy Capital markets and other financial instruments.
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GOBankingRates surveyed professionals in the realty space to find out their opinions. which factors impact your property value and why it matters to have a thorough understanding of them.
Lage
A home’s location is one of the main factors that affects pricing. George Ratiu Senior economist at Realtor.comA property located in desirable locations is likely to be more valuable.
However, buyers may have different desires. Ratiu said that while historically, homes close to downtowns or employment centres have had higher property values, there were times when downtown living wasn’t as appealing and property values reflect this shift. “Conversely,” Ratiu said that some properties are valued highly because they are far from busy areas like rural estates or ocean-front homes.
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Size
It can have an impact on the value of a property’s size. Kevin Bazazzadeh founder of Brilliant Day HomesAccording to the MLS, a larger home is more valuable than a smaller one.
Bazazzadeh stated that buyers will almost always pay more for homes that are large enough to meet their needs and can be moved into immediately without any renovations or repairs.
Age and condition
The value of a house will also be affected by its age and condition. Older homes have a higher value than newer ones.
Also, homes with high-demand floorplans are more likely be sold for higher prices. Ratiu gives the example of an open-floorplan home that has a dedicated home office and high-speed internet access. These features are more popular during remote work periods, so the home will be more expensive.
Renovation Potential
Modern homebuyers want to remodel and renovate their homes their way. Brian Burke, the owner and managing broker of Brian Burke. Kenna Real EstateThese properties can have an impact on the property value of a home by being more renovable.
Burke said that there are many possibilities to expand the property’s floor space, add an additional room, or create a pool or outdoor patio. The increased demand for property increases the property’s value because it offers buyers the chance to personalize it.
Rates of Interest
Burke noted that interest rates could have a significant influence on the property’s perceived worth.
The Reserve Bank raises interest rates on loans and lenders follow. Burke explained that this means that the monthly mortgage payments of borrowers are higher and more expensive, and thus increases the property’s price. A cheap mortgage makes it more affordable.
Ratiu stated that “when capital markets experience periods with low interest rates, which offer more affordable borrowing costs to buyers, buyers are more inclined to bid up home prices.”
The Economy and the Creation of Jobs
The economy is another factor that can impact a home’s market value. Ratiu explained that in times of economic growth, where there is more employment and buyers feel financially secure than ever, home prices will reflect this growing environment.
Alex Capozzolo is a real estate agent and cofounder of Brotherly Love Real EstateAccording to the study, demand for employment is the most important external driver that impacts real estate values. Small businesses are often attracted to larger companies that expand in new areas.
Capozzolo refers to Comcast as an example. In 2018, Comcast completed a $1.5B skyscraper at downtown Philadelphia. This business expansion created a few thousand jobs in the city and helped Philadelphia’s real estate market take off. Comcast’s example was followed by smaller businesses. They opened more restaurants, breweries, and shops in different areas of the city.
Capozzolo stated that the local economy boomed, neighborhood transformations took place, and people from different income levels moved to the city to benefit from new job opportunities. Real estate values also skyrocketed.
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This article was originally published on GOBankingRates.com: Homeownership 101: These 6 Factors Really Impact Your Property Value