You’ve heard the real estate adage that “Location, location, location” is the most important element when buying property? Well, it’s more than a cliché.
Of course, the quality and features of your home and land are crucial as well, but the nature of the surrounding neighborhood can play a huge part in whether your future life is serene and happy or clouded by drama and misfortune. In a recent survey by the National Association of Realtors, in fact, 78 percent of U.S. home buyers ranked neighborhood quality as more important than the size of a prospective home.
Unfortunately, even the most charming home with the best amenities won’t pay off if you inadvertently end up in a neighborhood that’s poorly maintained, subject to irrational zoning laws, riddled with crime or prone to unreasonably high taxation. And you should know that your real estate agent is prohibited by the Fair Housing Act from voicing his opinion about the quality of a given neighborhood, though he can answer certain questions and point you to resources that may help.
That’s why savvy home shoppers conduct their own research about a home’s surroundings before submitting any offers. In many cases that may require checking city records, talking with neighbors and area vendors and spending time in the neighborhood to observe what it’s like during different days and times.
While everyone’s priorities will be different, here are some questions to consider when vetting a potential neighborhood.
- Are most of the houses well maintained? Do neighbors seem to care about their yards and home exteriors, or are they cluttered with refuse? Their indifference may not bode well, since your home’s value is dependent on what other area homes can sell for.
- How sociable are the residents? You may prefer a quiet area in which residents keep to themselves, or you might consider it a positive if they’re frequently outside grilling, walking, riding bikes, mingling and playing with their kids and pets.
- Are the streets navigable? Are they in good repair, well-lit and easy to drive through, or are they pothole cursed, prone to flooding, hopelessly crowded during rush hour and/or used as short cuts to other major routes?
- What are you hearing? Are the normal neighborhood sounds mostly birds chirping and children playing, or is it prone to ambient noise from traffic congestion, highways, airports, hospitals, bars and clubs, buses, trains or new construction? Does your next-door neighbor favor yippy dogs, loud motorbikes or garage jam sessions featuring his death metal band?
- What are you smelling? Do your neighbors have their own cat farm, marijuana lounge or illegal burn barrel? Or do residents routinely deal with emissions from the local Limburger cheese factory or wind drifts from an area hog farm?
- How high are property taxes? That amount may be an unpleasant surprise and may seem nonsensical based on neighborhood quality and amenities.
- What school zone and school buildings are assigned? That could make a huge difference to your children’s educational experience and will also impact property taxes. Check test score records and ask around about the district’s reputation.
- What businesses, parks, churches and recreational facilities are included? Too many, such amenities are a huge plus, especially if they’re within walking distance. In the aforementioned NAR survey, the majority of respondents identified their ideal neighborhood as suburban and featuring a mix of houses, shops and businesses, while the least popular option was a suburban neighborhood with just houses. But in some cases commercial and public properties may attract undesirable people or traffic near your home.
- Are you close to public transportation? Again, that could be a plus or minus. But in many cases being within walking distance of bus or train stops or depots is a huge bonus or even a necessity.
- What’s the area crime rate? Read local papers and perhaps check out sites such as City-Data.com or CrimeReports.com for an objective overview.
- Is the home in a flood zone? Sellers are not legally obligated to disclose whether a property is in a flood zone, so make sure you check this out. Unfortunately, even the best, most expensive homeowners insurance rarely covers flooding. In low-risk areas, flood insurance costs an average $600 per year, according to Homes.com, while high-risk areas may incur costs of some $9,500. High-risk areas denote a 25 percent chance of flooding over the course of a 30-year mortgage.
- What’s the projected growth rate? Is the now-quiet and remote plat due to become a bustling community because of area employment growth? Is that what you want, and how might that affect your home’s value?
- Are home values rising? When possible, seek an area in which home values are rising faster than the national average; the National Association of Realtors typically records such data. Growing household incomes (medians are available through the census) can also be a good sign.
- Is the neighborhood diverse? Real estate agents are legally prohibited from commenting on such demographics, but census data or a Google search of the zip code can fill you in.
- Are most homes owner-occupied? Because owners commonly take more pride than renters in the appearance of their homes, you may want to aim for a community in which 25 percent or fewer houses are rentals.
- Do historic or homeowners associations enforce restrictions? If so, you may face certain maintenance requirements or fees or be limited in changes you can make to the home itself.
When house shopping, it’s easy to be swayed by the appeal of a particular home. But ultimately, the atmosphere surrounding that home could have an even bigger impact on your future happiness.
“Ask yourself if the neighborhood matches your taste in a living environment — and if it meets your criteria,” suggests Liz Gray on HGTV.com. “Just because it's a nice neighborhood doesn't mean it's the one for you. If the neighborhood meets your list but still feels wrong, search out another area. Trust your gut feeling — after all, you're the one who has to live there.”