TN Mountain Land, Location, Location, Location: What’s the Impact on Value?
| What key characteristics of a home’s location — not the features inside — push sales values up or down most dramatically? Just about anybody who’s bought real estate or is in the business knows the mantra “location, location, location,” and has opinions on what matters most. But new research by the National Association of Home Builders uses sophisticated statistical analysis techniques on a massive housing database to come up with a definitive list of the top locational characteristics that raise and depress property values the most. |  |
The “standard” home for the purposes of the analysis is defined as being constructed after 2003, with 1,850 square feet of living space, two full baths, three bedrooms, dining room, kitchen and a “miscellaneous” room, a basement, garage, fireplace, and “no special (locational) amenity or disamenity.” The starting valuation of the “standard” or baseline new house ranged from $163,540 in a non-metropolitan area in the Midwest to $589,551 in a large southern California metro area. The study then examines what happens to that valuation when positive and negative locational characteristics are introduced into the equation. For example, in a Midwest suburb the baseline house with no special locational amenity would be valued for sale at $212,137. Put that same house in a location that has parkland or open spaces nearby and the value rises to $215,510. Put the house in a gated community and the value rises to $225,772. Put it in an area that is convenient to public transportation and the value jumps to $238,340. And locate it on waterfront and you get the biggest positive impact of all — its soars in value to $303,760.
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