It’s a well-known fact that property values are affected by location. A home in the heart of a city will be worth more than one in a suburb, and a property with a view of the mountains or the sea will be worth more than one without. But how much do these views affect property values? And is it worth paying extra for a home with a good view?
It is the skill and knowledge of the real estate agent that will estimate a home’s value as accurately as possible based on location, house size, property enhancements, and the house-buying market.
In this article, we’ll look at some studies on location to answer the question of how it affects values. We’ll also explore what factors other than location can influence property values and find out if there’s any truth to the saying that “location, location, location” is everything when it comes to real estate.
Contents
Different Amenities and Their Accessibility
It’s no surprise that location plays a role in property values. After all, different locations offer different amenities and have different levels of accessibility. But just how important is location when it comes to property values?
Other Opinions
According to a study by the National Association of Realtors (NAR), location is the most important factor in determining property values. It’s more important than the property itself. The NAR study found that location accounts for 22% of a property’s value, while the property itself (e.g., the size, age, and condition of the home) accounts for just 20%.
Another study, by Trulia, found similar results. Trulia’s data shows that location accounts for 21% of a property’s value, while the property itself (again, size, age, and condition) accounts for just 18%.
So, both studies show that location is more important than the property itself when it comes to property values. But what about other factors? How do they compare to a location in terms of importance?
The NAR study found that the following factors are also important in determining property values:
- The local economy (accounting for 17% of a property’s value).
- The quality of the school district (accounting for 13% of a property’s value).
- The crime rate (accounting for 9% of a property’s value).
The Trulia study found that the following factors are also important:
- The quality of the school district (accounting for 16% of a property’s value).
- The local economy (accounting for 11% of a property’s value).
- The crime rate (accounting for 8% of a property’s value).
Both studies agree that the local economy, the quality of the school district, and the crime rate are important factors in determining property values. However, they disagree on the order of importance. According to the NAR study, location is more important than all these factors combined. However, according to the Trulia study, the quality of the school district is more important than the location.
It’s worth noting that both studies were conducted in the United States. The results may be different in other countries.
House Views
As we mentioned earlier, a property with a view of the mountains or the sea will usually be worth more than one without. But just how much more?
A study by the Appraisal Institute of Canada found that properties with a view can be worth up to 35% more than similar properties without a view. The study also found that the type of view makes a difference. A property with a mountain view is usually worth more than one with a water view, which is in turn usually worth more than one with a city view.
Another study, by the University of British Columbia, found that properties with a view of the water can be worth up to 30% more than those without. This study also found that the type of water view makes a difference. A property with an ocean view is usually worth more than one with a lake view, which is in turn usually worth more than one with a river view.
So, if you’re looking to buy a property, it’s worth considering one with a view. Just be aware that the type of view makes a difference. And, of course, properties with views are usually more expensive than those without.