When you’re house hunting in the real estate market, you might end up having to choose between an affordable house vs. a great location. While both choices have their own benefits, they have their own key differences and other important factors such as usable space.
The local real estate market can also be competitive. The property value may change at any given moment. This is why it’s important to keep up with real estate trends and news about the housing market.
You can also read on about the national real estate market if you want to expand your search options because real estate prices vary depending on if the property is a desirable place or not.
How Does Location Affect Property Value?
The location can have a big impact on a home’s price. Great locations tend to be surrounded by civic infrastructure, busy streets, hospitals, a grocery store, a good school district, and access to public transportation.
Whereas a residential property or housing supply located in not so busy street with little to no transportation options and few accessible facilities might end up decreasing the home’s value or become a vacation home for some home buyers.
Because land is a scarce resource, location has become an important factor in the buyer’s market. Naturally, people will look at the prices in the local market and this affects the home’s value and overall, real estate markets.
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What Determines The Price of a Property?
Aside from the lot location which affects the real estate value, there are also other factors that determine the price of a residential or commercial property. These important factors can make all the difference when it comes to real estate’s value.
Factors affecting the price of the house
Every home value is different. In the seller’s market, there are several factors that can drive the price upward. You have to consider the square foot of the house, available community spaces nearby, new schools, or even accessible subway stations which shortens your travel time to work.
Before you purchase a house, you might also consider the insurance considerations or which land developer constructed the house. These factors can greatly affect home values.
As such, here are a few of them:
To determine the value of the property, you need to also look at the sales price of other similar properties near its location which were sold recently. Other key factors that indicate the property value is the home’s location, nearby local schools, grocery stores, parking traffic, and safe neighborhood. Young families also tend to gravitate towards safe neighborhoods.
A good way to find out if the neighborhood is safe is by checking out the local crime reports. You can easily find this out by checking on the Internet where the information is readily available.
Home Size and Livable Space
You should also consider the area’s desirability and usable square footage when estimating the home’s resale value. The bigger the home, the more money you earn from the home sales.
Just note that usable square foot does not take unfinished basements, garages, and attics into consideration.
Age and Condition
Newer homes typically have higher prices. This is because important aspects of the home such as plumbing, electrical, and the roof are less likely to break down which is what buyers tend to aim for so they can save money for other expenses and payments.
As the saying goes, the older the house, the more likely you need to maintain it. And that might mean spending more than what you’ve anticipated from your budget. This could lead to unexpected expenses as well as time and effort on your part to make sure the plumbings and electricity should be working as they should.
Upgrades and Updates
Home improvement projects also tend to be a major factor in increasing a home’s values. These improve property values since the house is more or less fixed and upgraded.
Homebuyers prefer to buy ready-made homes with built-in modern plumbing, amenities, and appliances because it saves them more money in the long run.
Interest rates can also influence your ability to buy the home’s market value. If you’re currently paying for short-term and long-term interest such as car payments or mortgage payments and if the interest rates happen to increase over time, it might leave you with less money to afford a home.
Short-term interest rates don’t necessarily affect long-term interest rates. As long as you have your finances in order and know how to budget accordingly, you will be able to stay afloat and pay for the house without any worries.
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Price or Location: Which one is better?
Unfortunately, there is no clear winner on which aspect is better. It all relies on the person’s ability to afford the home value.
If you have the budget, then that’s a great opportunity to buy real estate in a great location. Not only would the property value have a higher price in the near future, but it could also be the best investment option you can have if you decide to move out and rent the property out.
However, if you don’t have the budget, consider the sale prices instead. There’s nothing wrong with buying an affordable home. The real estate location may not be your liking but the real estate values can only go higher.
What’s more, a residential property far from the city is more likely to have better quality landscaping and future appreciation potential. There might also be a chance for future commercial development which provides easy access to shopping locations and important amenities.