Property Blog » market http://propertyblog.biz Real Estate - Property - Homes - Loans - Mortgages Fri, 18 Nov 2011 10:11:59 +0000 en hourly 1 http://wordpress.org/?v=abc How the Neighborhood Affects the Value of Real Estate http://propertyblog.biz/2009/how-the-neighborhood-affects-the-value-of-real-estate http://propertyblog.biz/2009/how-the-neighborhood-affects-the-value-of-real-estate#comments Sun, 01 Nov 2009 20:56:12 +0000 Heather http://propertyblog.biz/?p=82 good neighborhoodNow, most of us already know that the neighborhood in which a property sits can have an affect on real estate values — but many of us may not know exactly why. Aside of the real estate market itself, a neighborhood will have the most influence on real estate value. What drives neighborhood values? Several economic principles, such as conformity, regression, and progression.

Progression means that, basically, if there is a somewhat icky house next to a better one, the value of the icky house will be enhanced. That sounds great, but it also means that in a neighborhood of expensive houses, a cheaper home will get more expensive.

Regression is the exact opposite. One expensive, great house in a neighborhood of lesser ones will go down in value.

Conformity means just that — any improvements must be made to maximize the value, so in that way, they have to conform.

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