For many of us, a home is the biggest investment we’ll ever make — yet most Americans are clueless about their home’s value, including the things that can ruin it.
From unappealing renovations to an unfortunately-placed sinkhole, numerous factors can devalue your greatest investment.
We’ve rounded up 11 threats that could torpedo your home’s value:
While there's insurance coverage specifically for sinkhole damage in case your property is hit by a sinkhole, they still hurt property values.
'It definitely stigmatizes the property,' Rob Arnold, a Florida real estate investor and realtor who has bought and sold more than 30 sinkhole properties in the last five years, told CF13 News. He tells owners of damaged homes to knock 30% off their asking price, plus the cost of any repairs.
When researchers looked at five municipal landfills nearu00a0residential property in Cleveland, Ohio, they found the stench was enough to drag down property values by 5.5% to 7.3%. Landfills are most hurtful in populated, expensive, residential areas. The effect was basically nonexistent in sparse, rural areas.
Likewise, the University of California at Berkeley found homes within two miles of a power plantu00a0drop 3% to 7%u00a0in value.
Foreclosures are eyesores, and can easily drive down the value of your home.
Across America, foreclosures were found to cause an average $7,200 price decline for every nearby home. Another study found that homeowners living within 300 feet of a foreclosed residential property experienced a 1.3% decline in home value -- and those 300 to 500 feet away saw a drop of 0.6%.
If you live in a fracking hotspot (fracking is a controversial method of extracting shale gas), your property value may be threatened.
A team of Duke University economists and nonprofit research organization Resources for the Future found Pennsylvania homeowners who used local groundwater for drinking lost up to 24% of their property value if they lived within 1.25 miles of a shale gas well.
And that's even without solid evidence that fracking really poses a threat to drinking water u2014 public perception alone is enough to drive down home values.
The publicly available National Sex Offender Registry is one way to vet your neighbors, but it's also made it easier for interested buyers to vet homes before moving in as well. Sex offenders have been proven to drive down property values.
Houses located next door to a registered sex offender dropped by up to 12%, according to a 2008 study by the American Economic Review.
In 'Beyond Aesthetics: How Billboards Affect Economic Prosperity,' urban planner Jonathan Snyder found that homes within 500 feet of a billboard were worth $30,826 less on average at the time of sale than others farther away.
On the flip side, areas where communities implemented strict billboard controls had higher median incomes, lower poverty rates, and lower home vacancy rates.
School quality is often a top priority for homebuyers, and that means neighbourhoods almost always benefit from being in close proximity to the cream of the crop.
A 2010 study by the St. Louis Federal Reserve Bank found that 'the price premium from school quality remains substantially large, particularly for neighbourhoods associated with high-quality schools.'
Unfortunately, the flip side of this scenario is that neighbourhoods near closed-down or low-ranking schools are less attractive and tend to see their property values lowered.
The color of your home is one of the first things a buyer will notice u2014 if it stands out in your neighborhood, it could torpedo your home's selling price.
The same goes for the interior u2014 a bright pink living room could discourage potential buyers, as they may not be able to picture themselves in that home.s.
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