10 Things in The Neighborhood That Will Sink Your Home’s Value

If I present to you a 3-bedroom, 1-bathroom home that’s only 1,200 square feet and then compare it to a 5-bed, 3-bath home that’s 2,500 square feet, which do you think is worth more?

There’s a good chance that the bigger (and probably newer) home is worth more, but it’s certainly no guarantee. In fact, many well-established, high-price neighborhoods that are most desirable also come with older, smaller homes.

The point I’m making is that location matters in real estate. We’ve all heard the “location, location, location” advice when going house hunting.

But more than just the neighborhood or street that it’s on, proximity to other elements and circumstances can dictate your home value, too.

For instance, if you’re right across from a beautiful park, the best school in Sacramento, or in a luxury condo downtown by the arena, your property value may be higher.

However, there are things that can sink your home’s value, too, and you should be aware of these before buying.

Based on various studies, research, and the findings of appraisers, here are 10 things that will drop your home’s value significantly.

1.    Damage from a Sinkhole

In some parts of the country, sinkholes are a really big danger, and they harm property values accordingly. In fact, if your home is damaged by a sinkhole, you can probably knock 30% of its value just to start, and your home value will also be affected by nearby sinkholes.

2.    City Dump

Landfills and dumps in the vicinity drag down your property value, up 5.5% - 7.3% according to one prominent study. Of course, the effect to home prices is far higher in urban or suburban areas and almost nonexistent for rural properties.

3.    Power Plants

A Cal-Berkeley study revealed that houses within a couple of miles of a power plant sell for 3-7% less than similar houses further away.

4.    Neighbors who are Hoarders

If your neighbor has junk piled everywhere, an unkept lawn, and their property looks positively sloppy, it definitely could affect your home value, too. In fact, potential buyers may want to knock 5-10% of your home’s price just because of your messy neighbors!

5.    Noisy Neighbors

And if those same neighbors are bumping loud music day and night, that could knock 5-10% off your home’s value, too.

6.    Fracking

Fracking is controversial many areas of the country, so much so that a Duke University study found that property values fell up to 24% if you live within 1.25 miles for a shale gas well (used for fracking).

7.    Billboards

If your home sits within 500 feet of a billboard, studies show that your home is worth $30,826 less on average than the exact same house further away. Conversely, communities with strict billboard zoning rules tend to have higher average property values.

8.    Poorly Rated Schools

Good school systems are a huge priority for homebuyers, and homes around top-rated schools often sell for more. But bad schools can actually push your home price down, so it’s worth checking out the schools in your neighborhood even if you don’t have kids.

9.    Noise Pollution

If you live near a highway, train tracks, or close to an airport, your residential property values will be significantly lower than similar homes that don’t have those noise nuisances.

10. A Prison, Strip Club, Meth Lab, etc.

There are a host of other businesses, public services, or even illegal activities that could sink your home’s value if you live close.

The bottom line is that no matter what kind of home you’re looking for and what the neighborhood, it’s important to drive around (at several times of day or night) to see if there are any items on this list that will hurt your home’s value!