Every Realtor, every HGTV show, every casual Sunday-morning house hunter… everyone says it. Location, location, location. This phrase is more than just a buzzwordy catchphrase. When it comes to real estate, it’s gospel (gospel, gospel).
No one really knows much about where the famous phrase originated or who coined it. References to it date back to the Chicago Tribune Classifieds in 1926, though it was used in a way that suggests it was a familiar expression already. Regardless of where it came from, it’s been on the tip of our tongues for 100-plus years, which shows us something profound about the housing market: Location matters.
Here are a few things about your home’s location that matter the most:
Lifestyle & Land
Beach-front, mountain-top, city-view — these are all highly sought after property types. The land the house is on and the lifestyle that goes with it is location’s first interest — whether it’s a quick elevator ride to a street full of restaurants or a sunset worthy of magazine photos. A lot may be forgiven if a property is close to or even within view of these things.
Take some of the dilapidated homes of Newport Beach, for example. A tiny layout, peeling paint and a grand total of three pictures online… and yet they’re still selling for a $1 million-plus.
Because they’re close enough to the beach that you track in sand, get seagull poop on your car and can smell the ocean when you open up the windows in the evening. These features (seagull poop and all) are worth the steep price tag, even if the house could benefit from a good bulldozing.
As a Seller: Play up the vibe — whether it’s mountains, city or beach. If someone is looking in your area, they likely know what it’s next to, but why not put it on display? If you’re by the beach, put towels and flip flops by the door. If there’s a city view, open up the curtains and show off the big windows.
As a Buyer: If the city view is driving up the price tag but you don’t see demand (if there are no other offers or a home’s been on the market for a while) your Realtor will help you negotiate down the price based on the inspection. In the Newport case, that peeled paint and need for new plumbing will be to your benefit.
Weather & Natural Disasters
There is no place immune to natural disasters and weather, but it’s not a dumb question to ask: Would you rather experience a tornado or an earthquake? A frigid winter or a hot, hot, hot summer? These (among a few other things) are some of the differences between living in Ohio and San Francisco, or between Montana and Texas.
In Flint, Michigan, no one can sell their house right now thanks to lead-contaminated water. In New Orleans, residents and new buyers weigh the city’s rich history with the risk of living so close to the hurricane-prone coast. The past and future of disaster zones greatly affects the value of homes in that area.
As a Seller: Temperate climate (and the optimism of spring) is the best time for selling. HomeLight suggests March and April are prime time for selling almost everywhere. The snow has melted but the heat hasn’t hit hard yet. If you’re putting your home up for sale, consult a Realtor in January or February.
As a Buyer: Don’t get discouraged when there are no homes for sale in July in Phoenix. It’s all about timing. Also ask yourself what disasters and weather you can stomach. If you can’t handle a tornado, don’t move to Kansas. If you can’t bear the idea of shoveling your driveway every morning, don’t look too seriously in Minnesota.
“Crime” is a term that has a wide range — from a lady getting her purse stolen at the supermarket to murders happening on street corners. “Crimes” are not created equal and so sometimes stats are hard to parse, as is the data about how crime affects home values.
The Center for American Progress conducted a crime report in 2012. It says “a 10 percent reduction in homicides would lead to a 0.83 percent increase in housing values the following year.” That said, just because a city has a reputation for a certain crimes doesn’t mean the whole place is bad news.
Take, for example, Chicago. Chicago has experienced some of the highest murder rates in the United States and has consistently made the news for it. However, high crime in Englewood and Fuller Park doesn’t mean you shouldn’t consider Chicago at all. It’s a big city. If you live in a safe niche like Forest Glen or Edison Park, your resale value will remain high.
To find crime information on a neighborhood, visit CrimeReports.com and use a zip code to search. Also visit the city’s official government website (example: Phoenix.gov) for statistics. The FBI website allows you to search for registered sex offenders living nearby too.
As a Seller: If you live in an area that has a great neighborhood watch program and has very few incidents of crime of any kind, talk to your Realtor about using this fact in your marketing description. Cul-de-sac in a gated community? You have location gold.
As a Buyer: Do your research. Let your Realtor help you determine what’s “up-and-coming” and what’s “never coming back.” She can also help you decipher what your city’s crime stats say about the areas you’re looking to move to.
The American Public Transportation Association and the National Association of Realtors commissioned a study of real estate values in five cities. The report reads: “Consumers are willing to pay more for housing located in areas that exemplify new urbanist principles or are ‘traditional neighborhood developments.’ These neighborhoods are walkable, higher density, and have a mix of uses as well as access to jobs and amenities such as transit.”
The economics of a city are layered and complicated. In a city that’s expensive to live in — say, Manhattan — many people live outside the city and commute into it for work. This is why NYC’s crumbling subway infrastructure has been a point of heated conversation lately.
From hospitality to retail, how will jobs get done if the people who work them can’t get into the city? This dynamic makes public transportation critical to the well-being of a city.
According to the above-mentioned report, homes next to public transportation in Boston, outperformed other homes in the region by 129 percent!
What public transportation is available in the area? A light rail system, a subway, a network of buses, commuter vans?
Also consider getting to and from a location. How far is the closest commercial airport? Does Amtrak come through town? Is the town big enough to have taxis or a ride-share service available? You might not think about this as you’re strolling through the jack-and-jill bathroom in your dream home, but the first 2.5 hour trip you take to pick up your in-laws at the airport will be an eye-opener.
More than what’s available in your city is what’s available in your immediate walking distance. Evaluate what’s around — a supermarket? The local pub? A gas station? A hardware store? If it’s important to you to be able to walk to Starbucks to get a latte and a newspaper every Sunday morning, make sure there’s one within a comfortable walking distance. Use Google Maps to see what’s around and use WalkScore.com to check out a home’s walkability score.
Get on the I-5, pull up to a zoo of brake lights and you’ll commiserate with all those ex-LA dwellers who talk about the traffic they “sure don’t miss.” I-5 might be a stark example, but if the noise or the time it takes to get places tests your patience, take it seriously.
A high-traffic area might include: if a home overlooks a freeway, shares a retaining wall with a main street, is right next to the railroad tracks or is in a flight path.
As a Seller: Being within walking distance of neighborhood essentials is a beautiful feature to tout. Tell others about the park across the way, the best restaurant in town and the Little Free Library that belongs to the neighbors down the street.
As a Buyer: Determine the amount of traffic you’re willing to sit in, road noise you’re willing to put up with and distance you’re willing to go pick up someone from the airport. Also think about how you will get to work every day. If you depend on public transportation, be sure you’re looking at housing in proximity to it.
Jobs & Schools
In 2012, the average home sale in Seattle was $260,000. Today, with big companies including giants Amazon, Microsoft and Starbucks in residence, the average home price has skyrocketed to $525,000. With such a demand for inventory, bidding wars often result in houses going for $100,000 over asking price and selling in the span of just a couple days.
Be careful of towns based around a single factory or company. Though you shouldn’t count them out, consider the value of your home (and your livelihood) should that factory close or that company move to a larger or less expensive place to operate. The small towns in the Rust Belt are a cautionary tale.
Though schools in a district can change fast, parents will often look at the ratings for schools around a house. Poorly rated or poor-performing schools bring down a neighborhood. Proximity to both private and public schools elevates it.
As a Seller: If your home is in the best school district in the country or major companies abound, say so! If you don’t have kids, or you’re just not up on the latest school board rankings, ask your real estate agent. The good ones will know all about the schools nearby.
As a Buyer: Research what’s around town before you start looking at houses. Know your school districts by visiting GreatSchools.org and what options you’ll have once you move. Also consider how far you’re willing to commute to work.
Location is a Complex Equation
“You can change the price of the house. You can change the shape the house is in. But you can’t change the location,” says Toni Spott, a top-selling Realtor in Milwaukee, Wisconsin.
Fortunately there are many factors that go into identifying whether a location is good or bad; it’s not all or nothing. A buyer looking for a house on the beach may value the location enough to ignore the abandoned lot next door. A house with a mountain view could lose a buyer’s appeal when they find out it’s located in a dangerous neighborhood.
When it comes down to it, everything surrounding a home matters… Location, location, location.