Good Location
- Real Estate

What is a “Good Area”? – How Location Can Affect Your Property Value


Very few of us need to be told that the location of a house is probably the biggest factor, external to the property itself, which can hold sway over market value. What is perhaps less well understood is the various ways in which home value can be affected by the surrounding area, whether that be the street, the neighborhood, the district, or even the whole town.

Knowing about how area affects home value is of interest for home sellers and buyers alike. City Home Collective, a real estate brokerage with experience in luxury homes and condos, recommend that, for buyers, the best bet is to look for an area which is in development so that property can be expected to increase. For sellers, the trick is to sell at the right time, which can either mean waiting for value increase (if it is going that way) or selling before the effects of an area’s decline sap too much value from the property itself.

How Area Affects Home Value – An Example in Action

To illustrate the complex relationship between area and value, we can consider a hypothetical example.

Say you are selling property and it is located within the catchment area of a good elementary school. This is naturally one aspect of the location which will add value to your home. Now, say that this school is soon to move premises, only to be replaced by a string of stores, bakeries, and so on. You might think this is something that will decrease your home’s value but what if the home you are selling is the type of two-bedroom condo popular among retirees? The target buyer for your home, as it were, would perhaps benefit more from the new stores than they would from the presence of a good elementary school. Thus, we can see that this area development would actually increase your home’s value, not decrease it.

So, we can see that how location affects value is not as straightforward as you might think, and it can affect different types of homes differently.

How Area Affects Value

Nevertheless, there as some generally accepted ways in which an area can affect the value of a home. Here follows some of the most prominent:

Where in the Neighborhood?

A neighborhood might be considered good, but is the property up a cul-de-sac or does it back onto a main road?  The former would add, and the latter subtract value – even though it’s the same neighborhood.

Schools in the Vicinity

Good schools typically add value but consult our previous example to see how this matter can sometimes be complicated.

Future Development

Future development can be good or bad. If it is certain that the development is going ahead, then it can even affect value before it appears. Whether the development it is swing park or a noisy manufacturing plant makes all the difference.

The View

Views are great value adders. But of course, it depends on what the view is. Future developments that might obstruct that view (or open up a new view) can have their effect too.


Regression refers to the value of a superior property being dragged down by inferior properties around it. Is your home the biggest and fanciest on the block? Those inferior homes across the road could be sapping its value. Nevertheless, bear in mind also that, for buyers, finding a regressed property could be a terrific way to bag a bargain on a fantastic home.

The key take-away here is that area and value are linked by a complex intersection of factors – not a straight equivalence.

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