There’s more to a listing than a home’s condition. A solid neighborhood with features such as a low crime rate and highly rated schools can boost sales prices, several real estate professionals told Homes.com.
"A property’s community impacts its listing price heavily," said Adam Hamilton, CEO of REI Hub, a real estate software firm in Richmond, Virginia. "It’s also something that prospective buyers need to take seriously. Everything from schools to noise levels, to crime rates, to the busyness of nearby streets all impact how 'good' a home is."
Schools drive value
High-quality schools are a “huge value driver,” said Ben Mizes, president of Clever Real Estate, a real estate education platform in St. Louis. “In certain cases, we've seen this translate into a $50,000 to $100,000 or more value increase for a single-family home.”
More than half of homebuyers with children under the age of 18 said the quality of a school district is an important factor when buying a home, according to the National Association of Realtors.
Crime repels buyers
Real estate agents aren't allowed to offer an opinion on a neighborhood’s crime rate. That's because the Fair Housing Act forbids housing bias, and discussions of high or low crime could be perceived as steering clients to or from certain neighborhoods.
Agents can direct clients to public databases such as City-Data.com or local police departments. “Buyers are smart and will do their own research,” Mizes said. “We let the data do the talking.”
The nature of crime in a community has different effects on buyers, Mizes said. Violent crime is the biggest deal breaker and will cause some buyers to reject a home outright. Property crime can be less of a turnoff but still creates nervousness among buyers. “We’ve had houses in crime-prone areas sell up to 10% lower than comparable homes just a block or two away,” he said.
Busy street v. cul-de-sac
A street with heavy traffic or loud road noise can deter homebuyers, who are concerned about noise and safety for children and pets, Mizes said. Those factors can lower the sales price up to 20% compared to similar homes on quiet streets with little traffic, he added.
Cul-de-sacs usually have less traffic, making them safer for kids, he said, adding that they often bring a community feeling to the street, he said. A cul-de-sac can add $5,000 to $20,000 to a listing price, he said.
Neighborhood walkability propels value
A recent Homes.com survey, New Construction: What Buyers Want, found that nearly 60% of respondents who bought a newly constructed home in the past two years or expect to buy one in the next two said living in a walkable neighborhood with access to retail was very or extremely important to them.
A 2023 NAR survey, the Community and Transportation Preferences Survey, found that 78% of respondents said they would pay more for a home that was close to neighborhood amenities such as restaurants and places to shop. The survey found that the attraction was especially strong among young adults, with 90% of Gen Z and millennial respondents saying they would pay more for a home in a walkable community.
Buyers willing to trade longer commute for lower home prices
During the pandemic, workers embraced remote or hybrid working arrangements, according to a NAR report, Commuting and the Home Buying Decision. They are now more willing to live farther from a workplace, NAR said. Buyers also are willing to travel from more distant locations to take advantage of lower home prices, it said.
The community factors show that even run-down houses can be worth a lot if they're in the right location.
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