Neighborhoods & Home Values

Posted on December 3, 2013 | Back to blog

Real Estate

A lot of different things can influence your home value, everything from bad neighbors to nearby sex offenders.  Just what in your neighborhood is threatening your home value, and how can you stay away from buying a home in a bad neighborhood.  The ability to identify those threats can help you avoid depreciated home values of up to 15% or more.

Bad Neighbor

Depending on a few different factors, a bad neighbor could have a large impact on your home value.  Just what counts as a bad neighbor can be hard to define.  But most professionals in the real estate market say a bad neighbor is one that turns-off the local community.  Also a bad neighbor doesn’t have to be an actual person or family, but could be a business that makes the community uncomfortable.

A person may be counted as a bad neighbor if they have any of the following traits:

  1. Doesn’t take care of the lawn
  2. Doesn’t take care of the appearance of the house
  3. Paint on the House is pealing
  4. Roof is falling apart
  5. Lots of visitors parking in the street
  6. Loud house parties
  7. Dogs that bark in the middle of the night

The best way to deal with a bad neighbor is to write a polite letter and express your concerns.  Just leave it in their mailbox, and follow it up with doing something nice for them so as to not ruin your neighborly relationship.

Power Plants

Living near a power plant has a very clear and negative effect on home values.  According to the University of California Berkeley studies have shown that home values decrease by 4% – 7% based on proximity to the power plant.  Though everyone needs Power Plants, there is a a stigma attached to them similar to living too close to power lines.  There is no guarantee you’ll grow a second nose, but some of the odors coming from the plant might be offensive to the nose.  You’ll have to get political in order to fight a new Power Plant from being built too close to your home if you want to protect your home value.


Speaking of offensive to the nose, homes near landfills are on average 6% – 10% cheaper than subdivisions not near landfills.   When all other factors between subdivisions are equal like home size, school quality, and crime rates, urban planners like Robert A. Simons say areas designated as hazardous can lower nearby home values up to 15% or more.  If you want to protect your land value, just like a power plant, you’ll have to tug on your political strings in order to move a landfill.

Sex Offenders

If your neighbor is a registered sex offender expect your home value to go down.  The closer you live to a sex offender the more likely your home will depreciate in value.  Research from Longwood University have concluded that a home with in a tenth of a mile from a sex offender reduces your home value by about 9%.  This same research also notes that homes near sex offenders take up to 10% longer to sell when compared to homes without sex offenders in the neighborhood.  If you’re sex offender neighbors are following the law there is nothing you can do.

Delinquent Bills

Believe it or not but neighbors in town home or condo communities that don’t pay their maintenance fees can bring down the overall value of the homes in the community.  Since these types of communities rely on everyone’s financial contributions to keep up the appearance of a community, if neighbors suddenly stop paying those fees the community could decrease in home value.

Home Foreclosure

Homes near houses foreclosed on according to Massachusetts Institute of Technology have reduced homes values by 1% per foreclosed home.  Joseph Tracy the Federal Reserve Governor has said, “the growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market . . . problems in housing markets can impact economic growth.”


Every once in a while badly managed local governments have to close down neighborhood schools.  Since school quality is important to 75% of home shoppers according to the National Association of Realtors, having a home near a closed school can dramatically decrease your home value.

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