A new residential or commercial real estate development project can impact property values in the surrounding area, either positively or negatively. If you’re thinking about buying a house, ask your agent if any projects are scheduled to start in the near future or are under consideration so you can take that information into account when deciding whether to purchase a home in the area.
How Construction of New Homes Can Affect Property Values
When builders decide to construct new houses, they do so because they believe that the local economy is strong and that new homes will draw people to the neighborhood. Builders may decide to construct new homes because a large employer has moved into the area or is planning to do so, for example. As employment in the local area increases, that can boost demand for housing and push home values up.
A construction project that will bring a group of new homes to an area can raise property values for existing homeowners. An increase in population can help existing businesses, such as restaurants and stores, and may also encourage other people to open businesses in the area, which can further support the local economy.
How Commercial Growth Can Impact Property Values
Commercial development can lead to an increase or decrease in property values, depending on the nature and location of the project. A project that will bring in stores, restaurants, a performing arts venue, an art gallery, a coffee shop, a grocery store and other businesses may draw visitors who will spend money, boost the local economy and increase overall property values in the surrounding area.
In a congested urban center, public transportation can make it easier for people who live in the area to travel to and from work. Homes that are close to public transportation lines are desirable because of the convenience they offer and they therefore tend to go for top dollar. Property values in those areas may be significantly higher than home values in areas farther from public transportation networks.
A new factory, on the other hand, may hurt property values. It may introduce environmental pollution and may make the neighborhood an unattractive place to live. If you buy a house in the area, you may have a hard time selling it in the future and getting a good price.
Talk to Your Agent
Your agent should have an in-depth knowledge of the local area and can give you information on anticipated changes that may impact property values. He or she can tell you about construction projects that are planned and how they may affect home values, as well as property taxes. Based on that information, you can decide whether it would be a good idea for you to buy a house in the neighborhood.