Do subdivisions increase home value?

Do you think subdivisions increase home value? There is a large variety of subdivisions throughout a city. Let me give you a few examples.

I appraised a home a few years ago. The home was a two story home. This particular subdivision was a newer subdivision and the home was a newer home. My assignment was to determine the value of this home.

There were only a few similar homes that had sold within this development. These two sales were in the same development, but they were significantly larger. There were some recent sales that offered similar design and appeal within a half mile from the subject.

These homes were similar quality and similar square footage as the subject. In this case, the two subdivisions were competing with one another and you could even go so far to say that the newer competing subdivision was driving the prices down for the other subdivision.

Some subdivisions offer PUD (planned unit developments). This is when the home owners have regular meetings and pay dues to maintain management, parks, entry, etc. Some PUDs are only for 55 or older or have other restrictions. In both cases, I’ve seen home sales within one PUD sky rocket in price and people clamoring to get into the development. On the other side, I’ve seen the developer struggling to sell lots and prices begin to fall as much or most of the market is not interested in paying for HOA fees and they want the ability to park their RV out front if they want to.

Other subdivisions consist of mostly one minority group. In one case, most of the subdivision consisted of specific religious groups. Other homes that I have appraised within subdivisions consisted of a significant number of people from other cultures such as Russians, Hispanics or White. Some of these neighborhoods steadily increase in value. Other neighborhoods with specific groups of people struggle to sell their home.

I appraised a home that was a foreclosure. Most of the homes were either for sale or were owned by the banks because one of the builders went out of business. This puts downward pressure on all of the homes in this development. If the bank owned homes are just as nice as your homes and are dominating your subdivision, your asking prices will have to reflect what is selling in the development.

So, in conclusion, there is absolutely no way to prove that your subdivision or anyone else's subdivision will increase home values. Here’s what I can tell you. If the entire neighborhood keeps everything looking good and lawns are mowed, etc. Buyers will be more likely to consider buying homes in your subdivision.

The more homes that conform to the neighborhood, the steadier and more stable the prices will be. The larger the diversity of a population will result in more stable prices in the long run. This is because if homes are similar to your home and homes are selling in your area, it is easy to support value. If there is one culture or a group of people that dominate the subdivision and if the buyer figures this out, they will either like this or not.

This could either help your home sell or make your home less than desirable and never sell. In slow markets, this may be the difference of selling your home or decreasing the price even more.

So do subdivisions increase value? It depends……….on everything.