The more your home appreciates from the purchase price, the more profit you’ll bag at resale. Typically, your house will appreciate over time. Data from VeroFORECAST predicted an increase in rates of .2 percent between 2019 and 2020, but since the COVID-19 pandemic, home values have skyrocketed.
Every region in the country has experienced at least a 14.9 increase in home appreciation, according to a June 2021 report by the Federal Housing Finance Agency. That’s probably great news when asking the question, “What is my home worth?”
But there are many factors that affect home values across the country, from interest rates and demands to consumer confidence in the economy and job growth. The actual value of your home can be significantly affected by a combination of factors that can cause it to depreciate in value, some of which are within your control.
Why Houses Depreciate in Value Over Time?
Homes that are close to shopping districts, supermarkets, schools, and popular large employers are usually in greater demand than those that are in more remote, out-of-the-way locations. But a house that’s too close to a busy highway, railroad tracks with frequent trains rolling by, or airports, can be a turnoff due to the noise.
Another issue to consider is that if your home backs to a field now, but that space is developed, perhaps adding a Walmart or a mall could cause it to depreciate in value as many people don’t want to be that close to a busy development. Something else that can bring down prices is a decline in a city’s population or employment opportunities.
If incidences of vandalism and street crime are rising, a registered sex offender moves into the neighborhood, or there are neighbors who have barking dogs or loud parties, it can decrease your home’s value.
Lack of Maintenance
Your home needs to be kept well-maintained for it to appreciate in value. If there are problems with the roof, structural issues with the basement, damage caused by pest infestations or mold, fire or storms, that can all devalue a property.
Buyers will take note of your home’s condition and age based on the quality of elements like hardware, fixtures, and even energy-efficient features. When your home is maintained from both an aesthetic and structural standpoint, it improves property value.
When renovations are done properly, with all necessary repairs made, that can help increase property value. When it comes time to sell, damage that hasn’t been properly repaired or replaced can end up causing a significant financial loss with a much lower sale price.
Landscaping and Curb Appeal
A well-landscaped home with curb appeal is going to have a higher value than one without nice landscaping, weeds, and/or junk and debris in the yard.
Making your home’s exterior shine so that it looks good from the street almost always equals more money in your pocket, while a lack of care in this area decreases it.
Supply and Demand
The most significant role in home value is supply and demand. Home values rise when the supply of available homes is low and buyer demand is high. That typically brings top dollar for homes in the local market. When the opposite occurs, values can dip.