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We see it quite often, a neighborhood or street with somewhat similar houses, and a couple of higher end houses tossed in. Do the values of the similar mid-range houses benefit by being next door to the bigger higher end house? All other modest homes considered equal is there a premium value based on being next door to a larger more valuable home?
Could the reverse be possible? do those homes suffer value wise because the neighboring home is above and beyond?
I'm not talking about these newer developments where every house looks the same and one may have higher end finishes, I'm thinking street/neighborhood with primarily modest homes (think raised ranches & capes) with a couple higher end large colonial and or contemporary homes tossed in.
I know that is the general idea, but in this case i'm not looking at buying the fixer upper or smallest house on a good street. What about a good block of well maintained modest middle class homes with a couple high end homes tossed in. There is no "worst" house as they are all well maintained and similar in construction and finish, with the exception of a couple much larger homes. Is there any benefit or detriment to being the house next door to the best one on the block?
I guess what I am trying to get at is the high end home may not realize it's full potential as the more modest homes may essentially "drag it down". If the high end home were surrounded by other similar homes in a high end development it may demand a higher price tag than in it's current setting. However, does the high end house help the values of the homes around it even when it is not on a block of similar style homes.
For example, I'm looking at a home on a nice quiet side street in a decent middle class town. Housing on this street consists of mainly 80's built homes of split entry's and capes. All similar finishes/updated throughout the years, and well maintained. Sprinkled on this block are a couple of larger higher end colonials and over-sized capes. Let's just say for comparison, the average home would likely sell in the low to mid 300k range, but, the higher end homes likely in the mid 400+ range. If these higher end homes were in a different neighborhood with similar homes in the same town they would likely sell for a premium, lets say upper 400k+. Does the average split entry that is next door to the higher end homes in the current setting command a premium over the split's located on a different spot on the street surrounded by other splits?
Being right next door to the best house versus being a block, or several blocks if it's the same neighborhood, away is really irrelevant in terms of the value.
The cheapest house you can afford on the best block you can afford is your best bet. You have a benefit to living next to the best house on the block, I don't see any downside for that scenario. It gives the impression of a better value to live next to the best house, but unless you sell for cash it's up to the appraiser to determine the value of your home based on nearby comps to your house.
Being right next door to the best house versus being a block, or several blocks if it's the same neighborhood, away is really irrelevant in terms of the value.
But the perceived value and possible added speed of sale makes it more valuable.
If I lived in a $200K home I would rather have my neighbors to live in $400K homes rather than other $200K ones. That way when you friends or family come to see you they will say what a great neighborhood you live in.
But the perceived value and possible added speed of sale makes it more valuable.
If I lived in a $200K home I would rather have my neighbors to live in $400K homes rather than other $200K ones. That way when you friends or family come to see you they will say what a great neighborhood you live in.
That's what I was wondering, I personally don't see it as a negative, although one could always find that friends or family could always look at the impressive house next door and say, that this one doesn't measure up.
Where we are looking doesn't have any bad area's really IMO, although some areas we are simply not looking in which would probably be the worst parts of town (not really bad by any means) and most of the town is middle class suburbia with this particular street being being on what I think the upper mid tier of town housing stock. Other neighborhoods are certainly nicer but price/value wise this one may work for us the best.
Was looking to see how others see this scenario, as I can see someone thinking both ways depending on how you view the situation.
That's what I was wondering, I personally don't see it as a negative, although one could always find that friends or family could always look at the impressive house next door and say, that this one doesn't measure up.
n.
I'm not concerned with keeping up with the Jones. I wouldn't care what family or friends think about your home not measuring up, that's their hang up. I would accept any compliments and ignore any criticism.
I'm not a realtor; I'm just an average homeowner, I guess.
Anyway, a house that was next door to the best house on the block, would be worth a lot less to me than if it was further down from that best house. I wouldn't want to come home every day and see that best house, and think "gosh my house looks so crummy in comparison".
Maybe that's just me! But with it being right next door, it's kind of shoved in one's face.
On the other hand, my house actually IS right next door to a much newer house about twice the square footage of mine and worth more than mine. It doesn't bother me a bit, because I think the house next door (while expensive) is kind of plain, unimaginative, and boring looking. I wouldn't actually want to trade houses with my next door neighbor.
So, I guess to me it really matters whether I personally think it is the best house, or whether it is just the most expensive. I would pay more for a house if I don't like the house next to it better.
This kind of confirms my thoughts, there certainly appear to be 2 ways to look at this. Some people may think there is some implied value being closer to a higher valued property, while others may be turned off to the prospect.
While I see Nola's point of not wanting to come home and think that "my house looks so crummy" I am not so sure it would apply in this case. If this was a normal house next door to some multi million dollar super high end home I could certainly see that way of thinking to be worth "a lot less" in my opinion. The situation in this case is simply a larger home but not so much that it looks out of place on the street. Typical housing on this street is made up of 1500-2000 sq ft homes with a couple 3000+ sq ft homes sprinkled in. Their opinion may still hold true in this case.
Everyone has different ways to look at this so that's why i figured I'd see what others thought.
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