Will new Housing developments help property value? (investment, price, townhouse)
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We have 2 large fields by our house that have been cleared and they are putting in 200-300 homes on each. Where we live lot sizes are small and expensive. Lucky for us,(until traffic increases) We live in the original part of the area in a non busy neighborhood with a nice size home and 1/2 lot.
My question is: Do large 200-300 home developments( $450k+ homes) increase home values in the area where someone lives? I know the actual amounts would vary depending on location, but generically speaking.
We have 2 large fields by our house that have been cleared and they are putting in 200-300 homes on each. Where we live lot sizes are small and expensive. Lucky for us,(until traffic increases) We live in the original part of the area in a non busy neighborhood with a nice size home and 1/2 lot.
My question is: Do large 200-300 home developments( $450k+ homes) increase home values in the area where someone lives? I know the actual amounts would vary depending on location, but generically speaking.
Generally, the developments themselves don't drive up value, but the extra retail and other services they might attract would. Somebody obviously thinks your area is a good investment.
That many homes may require new schools, and if the schools in your area are good, that would increase value.
If the homes are a lot higher priced than yours it might help your values. However if they are the same price as yours, keep in mind that people are not always rational and most will want to buy a new home rather than an older home. So it might cause your values to either stagnate or (depending on the amount of housing inventory) decline. (I'm not an RE professional, just an observer.)
Location: Stuck on the East Coast, hoping to head West
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This happened to us, actually. We have a single family home with lots of amenities (pools, trails, tennis courts, basketball courts, etc). Houses were built in the 1980's.
They have since added townhouses (1990's +) and additional single family homes (1990's + still building). They have no amenities and try to buy into our neighborhood amenities (we have very limited memberships available). My HOA controls all of that and we regularly vote on who gets to use our collective neighborhood property.
We have new shopping centers (wegman's, target, pier one, many, many more) + new elementary school + new high school to be finished around 2017. These were in the making before a lot of the new builds.
I think we're in the sweet spot. Houses in my neighborhood and the townhouses go for around $350,000 (without updates to single family, townhouses usually are updated). The newer single family start at $450,000 and go much higher.
The saying in my area is that, if you don't want a townhouse, my neighborhood is that last affordable single family home neighborhood in the area. The amenities definitely help.
I think the best part is that everyone (buyers included) know we aren't new build. Sellers in my area will tell buyers if you want an upgraded house, go across the street and spend at least $100,000 more. Sometimes they do. Most times they don't.
Prior to this, we lived in a neighborhood and the opposite happened: The new builds had better everything: roads, amenities, access to shopping. It really hurt home values.
It's a myth that new, more expensive houses will automatically raise overall property values. Sometimes it will, many times it won't. Another big myth is that new development is good for a community's tax base. New residential development generally is a net loss to a community--it generally costs more to service than it raises in taxes. Yet, developers continue to push the "tax base" argument.
Instead, look at the quality of life issues. Most people would rather live next to open space than next to 400-600 houses, with the inherent extra traffic and taxes needed to support that development. (But the latter is a long-term issue that most people don't realize.)
I forgot to mention the new high school that is going to be in the third field they cleared. So from what I can see so far they will build 500+ homes and open a new High school within the next 12-18 months or so.
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