January 24, 2019
How Area Noise Has Been Shown to Affect Home Valuations
From time to time we encounter a client who has bought, or is considering buying, a home in an otherwise pricey area whose price is listed a bit lower—because it is near an airport or backs to a highway. There are hale and hearty buyers in any market who, whether because of its similarity to where they grew up or some other element, are not bothered by proximate noise, also sometimes referred to as “noise pollution.” So their concerns generally tend to be along the lines of: Will I be able to re-sell this home for a decent price? Will it appreciate in value alongside the other homes in the area?
It’s a tricky issue for a number of reasons. For one thing: the fact the house was less expensive to buy than others in the area is already a factor. So long as it was priced low not for reasons of disrepair, which can be fixed with some work on the property, but because of its location, there will likely always be a difference in its local comps. An experienced assessor will know that any property with more noise than others in the area is not likely to be valued as high.
But then, there are other elements at play within the market. For one thing, there’s the matter of whether the property is being bought and sold in a buyer’s or a seller’s market. When there is low inventory and high demand, the chances of a house with noise selling for a higher price than it might otherwise fetch naturally goes up—generally in lock-step of percentage with the surrounding area. But one must take into account the percentage below the other nearby properties at which one bought it in the first place, particularly if the market in which one initially bought was also a seller’s market. In a buyer’s market, where inventory is high and demand becomes relatively low, one will find fewer potential buyers willing to put up with noise for a good value. But there will be buyers out there who may. The key then is making the property as appealing as possible in every other respect within the seller’s control.
For those who choose to buy in noisier areas—and for those who don’t—we here at Topouzis & Associates, P.C. are proud to provide the peace of mind that, after purchase, a new home’s title will not be subject to any nasty surprises. Whether you’re looking to engage in the market in Providence, Rhode Island; Boca Raton, Florida; or Peabody, Massachusetts, feel free to contact us for more information.