Impulse buying doesn’t just apply to the grocery store! Sadly, there are some folks who even make financial investments impulsively. We see it often in real estate: Buyers that let their emotions rule rather than looking at a house for what it really represents – an investment.
Don’t get us wrong. We have nothing against spontaneous living! It is important, though, to let thoughts about the future intrude when you’re considering buying a home.
The financial considerations of buying a Southern Maryland house go beyond whether the home is priced well for the neighborhood and market and whether you can negotiate a better deal. We can’t give you a crystal ball to divine the home’s future values, we hope you’ll consider this aspect before signing a contract to purchase.
So, what determines the future value of a Southern Maryland home?
The same factors used to determine a home’s current value can be used when trying to figure out whether the home will hold that value or even increase. These factors include location, land values, market conditions, the economy, condition, size, age, layout of the home, and updates.
The two predictors you should concentrate most on are land values and location. Land is a finite resource, so it will never be subjected to the supply side of the supply-demand formula. Demand for land will rise and fall, of course, but it will do so according to how much is available, and we can never make more. Unless you live on the Big Island in Hawaii, where Mother Nature is busy pumping out additional land, what we see is what we get.
A home’s location has a huge impact on its value. This includes its location within a town or city, the street it sits on, and even the plot of land on which it is situated. Location trumps pretty much everything else.
And some things will remain constant: Cul-de-sacs will be in demand for families, condos with great city views with be worth more than those without, and a great school nearby will help a home hold its market value.
How to use this information when home shopping
It’s easier said than done, but you must fight those emotional responses when you’re house hunting. We know it’s exciting to finally find the kitchen of your dreams, but unless you plan on living in this home until you die, you will sell the house at some point. Even the most impressive chef’s kitchen won’t boost the home’s value if it has other factors working against it.
Next, start investigating. Start with the location, and check municipal records to learn of any land use changes or other plans that could have an impact on the home’s future values. These are red flags and a possible drain on the value:
- The rerouting of traffic through the neighborhood in response to new development (commercial or residential) nearby.
- Plans for a nearby hospital, shooting range, power plant, or waste facility.
- The neighborhood’s zoning. A multifamily designation may mean that you will one day be living next to an apartment building.
- Check local regulations if you’re concerned about the possibility of losing your view or even the amount of sunlight your landscaping receives if your neighbor decides to add a second story to his or her home. A view is worth money – lose it, and you lose value.
If the Southern Maryland home is close to a school, check its rankings. Houses near great schools are in higher demand and hold their value better than those near poor-performing schools. Other nearby amenities that can boost home values include:
- Parks – passive use parks (those without playgrounds, ball fields, etc.) tend to raise home values while active use (mainly because of the traffic and noise they attract) do not.
- “Active” transportation amenities, such as bike lanes, walking and biking paths and trails — homes in what are considered bike-able and walkable neighborhoods are worth far more than homes that lack these features.
- Nearby Walmart, Target, Starbucks or Whole Foods – these businesses actually have a positive impact on home values. Some however, such as Starbucks, have shown to cause a corresponding rise in property taxes.
Next, check the HOA documents. If the home is in a managed community, the homeowners’ association documents will tell you how residents are allowed to use the neighborhood. From landscaping requirements to parking prohibitions, this important information may impact the home’s future value in a positive or negative way.
It’s great to get advice about how to improve a home before putting it on the market, but if the location is undesirable, all the improvements in the world won’t raise its value. Before you invest your money, take the time to make sure you’ll realize a return on your investment.
Mechanicsville MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309
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