Question:How can two 10-year-old homes with the same square footage, nearly identical floor plans and only a few blocks from each other vary in price by more than $10,000?
Answer: Forgetting, for a moment, the interior improvements that set one home apart from another, there are exterior factors that influence price. For instance, homes on primary ingress and egress streets (that is, the main streets that lead in and out of a tract), generally appreciate more slowly than those within the tract that are not on primary streets. Primary ingress/egress streets generate more traffic and are less desirable. So, they have lower prices.
Within a tract, a home on a cul-de-sac may generate a higher price for the same reason -- less traffic. Cul-de-sacs are frequently like a maze and they discourage drive-throughs, which is, of course, a definite benefit to residents.
Even properties on one side of a street can be worth more than a similar property across from it. Why? Certain communities, because of their name, are more prestigious than others. Beverly Hills, California, of course, is one. It is known worldwide for its high-end shopping, expensive housing and impeccable name. In sections where Beverly Hills is divided from other cities and/or communities by a street, the homes on the Beverly Hills side of the avenue command a higher price than those in the non-Beverly Hills city across from it.
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Existing homes may differ radically in price for another reason -- one homeowner wants to sell, and the other has to sell. The latter, of course, is going to provide the better buy for consumers since the owner must get out because of a job change or some other similar factor. The former is going to be tougher because they do not have to sell. Buyers, with the help of a real estate agent, can usually determine who "wants" and who "has" to sell. Find the one that "has" to and the difference in price can mean tens of thousands of dollars.
Some other factors that influence price: What commercial developments are adjacent to the tract? How (un)desirable are they? And, don't forget supply and demand.
The wise buyer checks one other thing -- a community's master plan. This is a must, especially if a tract (or home) is surrounded by vacant land. Most communities have one. It is usually drawn up by planners within the city or county and approved by a local planning commission. Find out what is going to be built nearby and determine how it might impact the value of the tract. A real estate agent can frequently be of assistance in this area, too.
All this, of course, takes time and homework. But, it is well worth it, especially when you consider that the purchase of a home is usually going to be the largest single financial investment you make in your life.
"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, Realtor® can be reached at (610) 642-3744, e-mail: jp4re@pahomes.com. Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.
