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Your Property's Connection to the City Where it's At
Buying a new home is an exciting prospect that consists of purchasing not just a place to live but in some cases a whole new way of life. A fresh lawn, a new place to call home, new neighbors, all of it comes with a home purchase. However, the purchase entails more than just building materials and pavement.
Like it or not, buying a piece of property ties a home owner into the city, both socially and financially. As the financial state of the city around your property changes, so, too, does the potential equity level of your property. If a builder surrounds your high value property with low value developments, that can have an irrevocable effect on your significant investment.
Using that knowledge can help you as you go through the process of picking a home and picking an area to live in. As you look at homes, inquire from either your real estate agent or other expert what the surrounding environment is like. Has the commercial fate of the surrounding area improved lately? Have homes decreased in value over time? These are extremely valuable questions to ask.
Understanding the current state of the neighborhood around your potential home is a crucial part of the real estate process. While many people spend time investigating things like the quality of the school district or cleanliness of the neighborhood, not everyone investigates the financial state of the surrounding area and the general flow of population in and out of the region.
Are the businesses in the area of a potential home faring well? Have commercial developments seen a lot of turnover? While it may seem like an unrelated development, if businesses start migrating away from a potential area, the prospect of an eye sore abandoned strip mall increases. An abandoned strip mall may seem like a small portion of an entire local economy, but it is a symptom of economic decay that potential buyers are constantly reminded of as they drive to showings.
Just as this enters into your own determination, so, too, will it enter into the determination of potential buyers as they research homes in your area. As buyers are deterred from your area, prices will have to be lowered to attract new residents and that decrease will affect the value of your property.
While the current economic state of your area certainly plays a role, the future value of your property is even more important as it will dictate the sale price of your property when it comes time to sell. In addition, future development can be very difficult to forecast, leading to a lot of uncertainty over how a home will fare.
There are a few things you can take into account when you try to forecast the economic future of your investment. Population statistics are available for the United States that can tell you the amount of people that have come to and left a particular area. If people are leaving, an area is likely to see an economic downturn and that can affect your property value. Your realtor can also be a good resource in this regard as time spent buying and selling properties can build up a high level of expertise in pinpointing when areas are beginning to hit a downturn.
So, as you go through the process of choosing a new home for you and your family, keep in mind that when you pick a home, you pick its immediate neighborhood too. With the considerable amount of money you are likely to pour into a mortgage, you need to protect your investment as best you can. To do that, understanding what might be the financial future and financial present of the surrounding area can give you valuable information as you choose your new home.
Call us, 509.438.9344, Email us, or fill out the contact form below.
We respond right away! -Colleen Lane, Realtor®
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