Four Factors That Can Depreciate Home Values

factors that affect home value

Homeowners wishing to sell their home may obsess over the home’s physical characteristics to try and get a higher price, but often it is factors outside of their control that make a larger impact on the sale price.

You will find four outside factors that affect the value of your home below.



We are all familiar with bad neighbors, especially the ones who embarrass the rest of the neighborhood with their unkempt lawns and dilapidated homes.

Their unsavory yard and home can knock off up to 10% of your home’s value from the sale price.

Bad neighbors come in many other forms as well.

Even if your neighbors have the look of a potential backyard bud, their behavior, such as arguing with other neighbors or playing loud music, can drive them into bad neighbor territory.


Natural Disasters

This year has broken multiple weather records, including the number of tornadoes in one month’s time and river levels.

As extreme weather becomes our new normal, potential homebuyers may be more interested in the home on top of the hill or with an extra secure basement.


Location. Location. Location.

As always, location reigns supreme. Is the new highway being built next to your home? Is there a new school in a better district starting in the fall?

No one wants an eyesore or dangerous road near their house.

Schools continue to be a high priority on the list of what people look for when buying a house. Be aware of changes in your community so you are able to be flexible for your own financial wellbeing.

Condo and apartment complexes have multiple units on small cuts of land.

The increased supply of homes they create can bring down the value of surrounding homes.


Economic Environment

Economic weakness can lead to higher rates of unemployment, which means fewer qualified buyers in the marketplace and a surplus of properties for sale.

This can lead to longer periods of homes being on the market and lower sale prices.

Mortgages – the way many homeowners acquire their homes – play a major role in whether property values increase or decrease.

Mortgage interest rates affect the buyer’s ability to sustain a mortgage, which affects their ability to purchase a home.