So what's the Number #1 question I get as a Realtor? It's always some variation of 'what's going on with home prices'. Translated it means, 'what's going on with the value of my home', because that's what people really want to know, right? While each home in the Lehigh Valley is different in some way from the others in any given neighborhood, there are certain things that can give you a good idea as to whether your home's value is on the increase or the decrease. Many times it can depend upon the neighborhood itself; so how do you predict the value of a neighborhood? While no one can say for sure how home values in a neighborhood will rise or decline over time, there are big-picture economic factors that you can look for to help get handle on where they may be going.
1. Major regional employers. If a community depends upon one or two large companies for a high percentage of local employment, you can bet that as the company fares, so will the neighborhoods. While “company towns” are hardly the norm these days, don’t overlook the possibility.
2. Number of properties currently for sale. Sometimes there’s nothing wrong with a neighborhood just because the inventory (i.e. number of homes on the market) is high. Other times, something may be amiss. If you’re seeing street-after-street of “FOR SALE” signs, ask questions.
3. Major construction. Is that a new school they’re building, or is it a supermax prison? Did they clear that land for a new shopping center, or is it a new loop for the interstate? Certain types of construction can improve home values while others can hurt. Getting in touch with the local planning commission as well as the Morning Call or Express-Times can help illuminate what’s behind those bulldozers and cement mixers.
4. Rental density. People who own the homes they live in tend to take better care of them. Also, it’s preferable to have long-term neighbors versus high-turnover tenants. Absentee landlords or seasonally rented properties can also be a drag on a neighborhood. Get a feel for the rental density and the direction it’s heading. Rental density matters.
5. Environmental conditions. One industrial accident that poisons a water supply is enough to annihilate home values. How susceptible is the region to extreme weather? Don’t rule out environmental liabilities or benefits.
Nobody’s crystal ball is perfect, but to ignore major macroeconomic factors is dangerous. Even if you’re only planning on staying in a location for 5 - 7 years, do yourself a favor and try to position yourself to make, not lose money, on your home with these tips in mind.
Wondering about the value of your home or have questions about a particular neighborhood? Give me a call at 484-893-1234 or get your free home value report at lvmarketreport.com. The market is hot and homes are selling fast!