The first and seemingly most important rule of Real Estate 101 is: “location, location, location.” This real estate principle that realtors put emphasis on basically means even though two houses may be identical in structure and design – where the house is geographically located makes a difference in value determination.
The worth of a home tends to increase with a house that is located in one or more of the following sought-after areas:
- In a good school district,
- Near recreational facilities,
- In a locale with a view (mountains, ocean, etc.),
- Close to shopping and entertainment and
- Close to public transportation.
This not an exclusive list – but rather just a sampling of some of the factors realtors, homebuyers, home sellers and appraisers take into consideration when determining the price of a home.
Is There a New Caveat to the Golden Rule of Real Estate?
There may be a new contributing ‘location factor’ involved that can influence both the desirability as well as the value of a home. A recent article in the Seattle Times last month discussed an interesting correlation between real estate market recovery and whether or not states allow foreclosure proceedings to be handled outside of the courtroom.
This more permissive legal environment in “nonjudicial states” – states that allow for home foreclosures to go forth without court assistance – is fostering a robust housing market recovery. In contrast, in “judicial states” home sales are slow and house values are not rapidly increasing.
Pro Teck Valuation Services, an appraisal company, recently conducted research on the current housing market. The CEO of Pro Teck noted in the article that, “Our hypothesis is that nonjudicial states have been able to work through the foreclosure (glut) faster, allowing them to get back into a nondistressed housing market sooner, and are therefore seeing greater appreciation.”
There are 28 nonjudicial states and 22 judicial states.
The judicial states, including Ohio, find themselves grappling with the existence of a stagnant pool of foreclosed homes that overflowed the market and are now slow to move out of the foreclosure process. Ultimately, these homes are bringing down the value of the homes located around them as well, creating an undesirable ripple effect.
The Real Estate Market in 2014
Overall, the housing market appears to be moving in the right direction in the New Year. According to Freddie Mac, there is continued optimism for the housing market next year. Freddie Mac predicts a 5 to 6 percent increase in house sales and the same percentage increase for home prices in 2014.
No matter where you live, the attorneys and staff at Clark & Clark and Associates and Lanco Title Agency wish you and yours a happy, healthy and prosperous New Year.