How New Developments Change Property Values.

Changes in property values seem scary to many homeowners, and with the volatility of the market always increasing it makes it hard to know if the value of your home is going to rise or wall.

New developments as either new residential buildings or pieces of commercial real estate make many property owners sweat. Those things can have an effect on property taxes and how potential buyers see a home being put up for sale. Not to mention a few other things.

Let's look at the following examples to see what would bring about the biggest changes to the market value property values in a short amount of time.

New campus for a school.

Good school districts tend to increase the desirability of a home. In the real estate market, proximity to good schools will up the price of each square foot of a house. However, when looking at an example like this there are a thousand factors to keep in mind.

Nuance is important here: the value of a home can decrease during the construction of said school if the home is close to the construction site. It may be hard to justify a higher price on a sale when people in the open house have to speak louder because of construction noises.

Conversely, a home further away from the construction but still within a walkable distance from the school can demand more money. The higher list price would be justified by the easy access to the school.

Meanwhile, if your route home from work passes by a busy road because of the school it can become a hindrance toward buying a single-family home that is other amazing.

If this is starting to feel like a tennis match it's on purpose. The simple fact of living close to a school says nothing about what that does to a property's value.

Elated sellers pr des[pmdemt residents need to take into account a bunch of other factors to see if their mortgage is suddenly a steal or a racket.

What can make a difference over years may not be felt right away. Easy access to public transportation to the school can increase property value but that may be offset by the property taxes residents have to pay.

Additions to a neighbourhood need to be evaluated on a per case basis but sometimes just the fact that many people are selling or buying a home in one area can affect a buyer's perspective of the area.

More buyers can create a seller's market but once the first sold properties are gone, the rest may find themselves in a buyer's market from the lack of demand. Whether the new development will be profitable or not for an owner or a buyer is often purely speculative, especially in the short term.

A Fire Station.

A property assessment is a lot easier to do when a home hasn't been ravaged by fire; when the exterior paint is still there and not charred black. Still, there are downsides to living near a fire station.

Anyone who lived in Manhattan will know the pain of ceaseless traffic but a spare few all over North America have had a fire station across their yard.

Everyone wants firefighters nearby in case of natural disasters but the noise pollution from the sirens at any and all hours is something nearby residents have no other option but to accept.

Just like a school, a fire station will create both positives and negatives for a home. Its property value will be affected but the way in which it is affected depends on how far it is from the facility and to what extent it can affect the home.

To determine whether a location will be affected by an increase or decrease in property values is a gamble in all but the simplest cases.

Then where does worry come from?

What often causes worry or people is an assessment notice, upcoming property tax reassessment, that lists their home as being worth a lot less than what they are paying in terms of their mortgage. It rightfully sets off alarm bells but one thing to keep in mind is that that notice does not automatically translate into the price the owner is expected to sell.

While many buyers will be curious about property taxes, the housing market will be the key factor responsible for dictating the value of a sale.

To be "under the water" for your mortgage means you owe more on your mortgage than your property is currently worth. This can be a difficult situation to be in, as it can be difficult or impossible to sell the property until you have paid off the difference. Many people find themselves in this situation during a housing market crash when prices drop significantly and they are unable to afford their current mortgage payments.

This is the key fear when it comes to new developments that could drive the value of a home in a downward spiral. It's not something to be underestimated but it's not something that happens overnight - outside of a massive systemic crisis.

Changes to the home itself.

While people in town councils are able to effect changes at a municipal level by making their voices heard, there are still homes that end up by train tracks or right next to the local funeral home.

There's no going around the fact that some things will cause the property value of some homes to plummet in the real estate market. Still, there are ways to counteract the negative effect that things beyond your control have on your home.

Economic factors and interest rates are things we wish we could control but we simply cannot, not as individuals. What a homeowner can do is be aware of upcoming changes to a neighbourhood and act accordingly.

Deferred maintenance, taking too long to address repairs that the home needs, is one of the biggest things that will drive the price of a home downward.

It might seem strange to make an investment in a home that might have its value reduced by outside factors but making the home more attractive to buyers can make it easier to sell the house if you are planning on moving anyway.

The price per square foot can go down because of changes in the house's location but some key renovations can more than shore up the cost for people that don't mind things like fire station sirens or busy roads because of schools.

A location's value depends on the market but homeowners still have their own individual preferences and one homeowner's nightmare is a non-issue to another.

At the end of the day, it's important to keep an eye out for developments in your neighbourhood so you can make an early decision with regard to your house. Should the new development affect your home, you can find ways to sell to either get a profit or prevent losses down the line.

At the same time, it pays, literally, to be patient and understand how shifts in property value can eventually swing things in your favour in the long ru

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