How will _________________ affect my property values?
There seems to be a lot of things going on right now in the world that people want to know how they will affect property values in the future. Not IF they will affect property values, but HOW, and by HOW MUCH. Will the addition of a public water line and meter change the value of a property that was previously on a cistern? Will the addition of a public sewer system affect the value of a property that was previously on a septic system or holding tank? Will a housing addition where there used to be farm fields, or a park where there used to be a swamp, or an industrial park 3 miles away, etc.?
The short answer is yes to all of the above questions. Yes, each one of these will impact property values. The answer to “how” or “how much” is more difficult to answer because it would really require a crystal ball to know what other factors are going to happen between the time the question is asked and the culmination of the project. For example, we all know that smoking can cause lung cancer. What we don’t know is why some people who smoke get lung cancer and some don’t. We can’t tell people that if you smoke for 47 days you will get lung cancer but if you stop at 46 you will be just fine.
Sewers were recently added to my neighborhood. Prior to sewers, some residents were on holding tanks and some on septic systems. The big question at the time, besides the cost of the sewers, was how it would affect property values. Conventional wisdom would be that because more people in the area outside our neighborhood are more familiar with sewers than septic or holding tank systems that property values would go up and those electing to stay on the current system would see a drop in their property value. But has that proven out? I have no idea how to quantify that! The real estate market in our area has increased over the last few years, and more people are moving to the area, and there are more jobs at an industrial complex within a few miles, and the economy in general has been better lately and there are no two identical houses for sale at the exact same time – one of which is on sewers and one that isn’t.
It’s the same with something perceived as a negative addition to the neighborhood, town, community, area, etc. The question shouldn’t be how will or how much will this affect my property values, but how will this affect the quality of life in my neighborhood, town, community, area, etc. The quality of life or even the perceived quality of life is one of the main determinates of property values. The addition of a public sewer system is usually perceived more favorably than unfavorably. The addition of a landfill in the field next to a subdivision is usually perceived more unfavorably than favorably. There may be both perceived positives and perceived negatives; the weight of each is going to be different to each person.
The bottom line is this: Those who can tell you HOW MUCH some external addition or situation will affect property values should not be doing what they are doing. They should be playing the lottery. I don’t know even one person who will claim that they know with any specificity what is going to happen tomorrow, next week, next month or next year. The world is just too complex.
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