Values of a property can go down for a number of reasons. In general, the economic condition of the area, availability of mortgage funds and jobs can increase the values of properties in a solid market. These are also what brings down property value. For example, when the economic condition falls and when jobs become scarce, this would also reflect on the property value.
In this article, we’ll have a deep dive into the above-mentioned factors that make property value decrease plus more reasons for property values falling. In some of them, it requires governmental action to change the condition, but in others, you can actually do something about it. We’ll include tips on how to increase your property value.
Important Things That Bring Down Property Value & How to Solve Them
Knowing what brings down property value helps you know how to protect your home. After all, your home is one of your biggest investments (if not your biggest investment). Want to know what causes property values to decrease? Read on.
When there are only a few job opportunities in your area, with layoffs happening and home ownership is at risk, property values drop. Consequently, fewer people can afford to purchase a home. Homesellers decrease their prices to be competitive in a diminished market. Foreclosures and short sales become more common and property values go down. It now becomes a buyer’s market and owners now have no other choice but to drop the prices of their homes to compete.
Short Sales and Foreclosures
The fair market value of your home decreases when there are a number of homes in your neighborhood that are available as short sales and in foreclosure. The thing is buyers interested in your home can choose to buy lower-priced homes within your neighborhood.
To be competitive, you need to make sure your house has something that other properties don’t have. Enough that they are willing to put in more money to buy your home. What you can do without breaking a bank is to spruce up your grounds, paint your exterior, and repair affordable defects.
Generally speaking, people don’t want to live on a property near a power plant or a landfill, or anything in an environment that can be harmful to your health. One study shows that the construction of a power plant within 2 miles of a house decreases its value between 4 percent and 7 percent. Landfills, as expected, also reduce the home value, dropping between 6 percent and 10 percent when your home is near a landfill. Moreover, hazardous waste sites drop the property value by up to 15 percent.
Non-availability of medical facilities, lack of good schools, and bad roads may hurt your property value. If a crime recently happened in your neighborhood, it can also drive away potential buyers.
Poor Curb Appeal
First impressions matter when it comes to selling a home. A property with a strong curb appeal is proven to sell more than half the homes on the market. A rotting fence can instantly scare buyers away or can easily add to their list of why they should put on a lower offer for your home.
Get rid of artificial installations around your yard if you have too many. Even water elements such as pools and ponds could drop the value of your homes, especially for buyers with small kids or for buyers who simply want to start a new yard. Also, make sure your yard is clean. Plants are trimmed. If you buried your pets in the backyard, be prudent enough to remove any grave markers.
Another thing you should address is old, faded, peeled, or cracked exterior paint. It can also hurt your home’s value. When giving your house a fresh coat of paint make sure to go with neutral colors in the shades of white, gray, and beige. These colors appeal to most buyers.
The same thing is true with doors. You can never go wrong with neutral entry door colors such as brown, gray or black. Navy blues and deep shades of red are also classic front door colors that have continued to stand the test of time. You can also choose to highlight the natural material or grain of your wood door by staining it instead of painting.
Poor Maintenance in the Neighborhood
You have a well-maintained yard and your house is in good condition, but your neighbor’s lawn needs lots of TLC and cleaning with trash, junk cars or other unsightly things haphazardly placed in their front lawns. This can also hurt your property value. This can be the case in houses outside a controlled community or one that has no strict regulations on how residents maintain their property.
Old/Outdated Interior and Maintenance Issues
Buyers don’t like outdated kitchens and baths, old appliances, and a long list of maintenance issues such as leaky faucets and stained ceilings. These will pull down your home’s value. A roof that needs replacement and an old air conditioning system, these are also included on the list of what makes property value decrease.
Make sure to get rid of any clutter. Depersonalize your home by putting away family photos when the buyer comes to visit. If you have the budget, care to put a fresh coat of paint on old, faded ones or over wacky colored walls.
Aside from cleaning, painting, and decluttering, take care of serious problems such as a busted plumbing, molds, leaky roof, frayed electrical wires, termite problem, crumbling foundations, and defunct HVAC. These issues can definitely chunk off a big portion of your asking price.
Home Improvements Done Wrong Or Failed to Meet the Code
Ideally, home improvements should increase your home’s value but when it’s done incorrectly it can be on the list of what brings down your property value. Additionally, if building permits are forgotten when doing home improvements it could also mean code violations. Bad wiring or plumbing can also affect insurance claims. You don’t want to spend thousands of dollars on any fire or flood damage.
Mistakes during construction or renovations can also decrease your property value in the final appraisal. Errors such as these usually happen due to DIY gone wrong or a contractor compromising quality trying to save money or time during a build, renovation, or repair.
Shoddy workmanship adds on to the list of issues that will make the buyer present a lower offer to offset the money needed to take care of all the repairs. Classic examples of these are crooked tiles, uneven decking and railings, warped flooring, and awkward home additions.
The months of May through August are generally considered the peak season of selling and buying homes since families can move without interrupting the kids’ school years. Historically, home sales and values drop the month of September when buyers become more scarce. October to January are also slow in areas with four seasons. But if your home is in a sunny climate where winter visitors flock, homes can increase in value during the September-to-February period, and values also decrease when buyers are only few.
Homes on busy streets or on main roads tend to sell at a discount between 5 percent and 10 percent. This is because most people prefer less traffic and noise. Buyers may walk away or offer less if they find the inside of the home too noisy.
Registered sex offenders in the area
Having registered sex offenders live in your area can lower your property value because of safety concerns.
Vacant or Deteriorating Zombie Houses in the Neighborhood
Seriously neglected or zombie homes can negatively affect the property value of homes sitting around them. Their dilapidated facades can spoil an otherwise pleasant neighborhood.
How to Improve Your Home Value?
Now that you know what brings down property value, it’s time to discuss what makes your property value go up. Here are proven ways you can do to increase the value of your home:
Make your property more appealing
First, make sure you have a strong curb appeal. An attractive exterior will make a potential buyer want to see more, and will make them want to see what’s inside. It also sets the right tone. Your existing landscaping should be well-maintained. If your yard seems lackluster compared to your neighbors, consider planting flowers or repainting your front door.
Aside from the exterior, you should also make the kitchen and bathroom appealing. Having outdated kitchens and bathrooms can hurt the valuation of your home. You don’t necessarily have to go all out in remodeling your kitchen. On average, a minor kitchen remodel gives 81% return on investment and a mid-range bathroom remodel with new flooring and a few updated fixtures recoup 70% of its cost in added value.
Make your home low-maintenance
Buying a home is expensive so most buyers don’t want to put up with a home that needs constant maintenance. Ease their fears of an emergency repair in the near future by replacing major components such as the water heater, furnace, or roof. You may also want to replace easily stained carpets with hardwood floors. Such improvements make your home easy to clean and maintain, and at the same time, may also increase its value.
Make your home more energy efficient
Want to significantly increase your home value? Consider adding energy conservation features to your home. You can avail of Energy-efficient mortgages (EEMs) which will allow you to take on additional debt to cover both the purchase of the house and its energy-efficient upgrades.
Make your home more efficient by installing double-pane windows, LED lighting, efficient appliances, and enhanced attic insulation. If you have a bigger budget, install solar panels on the roof. But keep in mind that solar panels are a big financial and structural commitment and you are looking at a long-term increase in value, not a way to instantly boost property value during a resale.
Set an appointment with your utility company or a certified energy auditor who can assess your home on where it is wasting energy and what upgrades to do so you can save the most money.
Make it larger
Another way to significantly increase property value is by adding square footage to your home. In general, bigger homes command higher asking prices, and even if an appraiser doesn’t officially recognize the full value of added space, the buyer will usually take note of it. You can add a new room or simply build an additional living space by turning the basement into a man cave or another bedroom or living area or building a deck.
By doing the above tips and addressing issues mentioned earlier on what brings property down you can protect your home from devaluation. These are proven ways to improve your home value but you should set realistic expectations. Updates and improvements rarely recoup 100 percent of their cost, but they can make you live more comfortably and can also help to find the property values near Cincinnati to sell your home faster.