Blog posted On April 16, 2020
Your home is an investment, and for most Americans, your biggest investment. Even if you are not planning on selling your home in the near future, you want your home to appreciate in value, so you continue to build wealth through home equity. It is important to recognize factors that indicate a decline in the value of your home. These signs may be an indicator that value has declined.
Your Property Taxes Have Decreased
You might be excited to see a lower number on your property tax bill, but keep in mind that these taxes reflect your home’s value. Property taxes are calculated by multiplying your local tax rate by the assessed value of your home. If your tax rate has not changed but your property taxes go down, that means your home’s value has decreased.
School Classrooms Are Getting Crowded
If you’ve noticed that your children’s classrooms have been getting more crowded, your property value may have something to do with that. Schools are generally funded by property taxes, so when local businesses leave the area, your town is no longer collecting those property taxes, equating to less money for schools. When there are more students than there are resources, your school district’s rating will slip, and with it, your home’s value.
Nearby Houses Aren’t Selling
If you notice that your neighbor’s home has been on the market for quite some time, it’s possible your home could face the same challenges selling also. If several of your neighbors have had difficulty trying to sell, this may mean that values are generally declining in your area.
Nearby Houses Are Selling for Less
On top of your neighbors’ houses staying on the market for prolonged periods of time, you may notice these homes are selling for less than you expect. If your neighbor’s home sold for less than you expected, your home could face a similar fate. Keep in mind that this is not always the case—your home may be better maintained or have some features that your neighbors’ homes do not.
If your home is decreasing in value, it’s not the end of the world—especially if you’re not looking to sell any time soon. Your local housing market may turn around over time. If you think your home’s value is on the decline and you are looking to sell soon, check out local properties that have sold recently and see how your home compares. Some simple renovations could make your home more marketable.
The best way to get a clear and accurate estimate of your home’s value is to have a home appraisal. If you have any questions about the value of your home and how it impacts refinancing your current loan or making a new purchase, let us know.
Source: The Motley Fool