Whatever happened to Location, Location, Location?
Location is considered to be a major factor determining the value of real property.
In fact, location is considered so important that it’s repeated three times when investment in real property is discussed.
Yet the findings of a recent Zillow survey of new home buyers polled by Ipsos casts doubt on the importance of location. These are some of the findings of an Ipsos poll conducted Feb. 27-28, 2014. For the survey, a nationally representative sample of 2,030 randomly-selected adults aged 18 and older residing in the U.S. was interviewed via Ipsos’ U.S. online omnibus. With a sample of this size, the results are considered accurate within +/-2.2 percentage points 19 times out of 20, of what they would have been had the entire population of adults in the U.S. been polled. The margin of error will be larger within sub-groupings of the survey population. The sub-group of first-time homeowners with regrets in the sample is 348, which has a margin of error of +/-5.3 percentage points. These data were weighted to ensure the sample’s regional and age/gender composition reflects that of the actual U.S. population according to data from the U.S. Census Bureau. http://realestate.aol.com/blog/2014/06/09/first-time-homebuyers-biggest-mistakes/
So what is going on?
Half of those surveyed said they would do things differently if they did it again!.
More than sixty percent of those interviewed said they wish their homes were bigger or laid out differently. They would have preferred bigger kitchens, more storage space or just more space in general
Forty percent of first-time buyers with regrets said they either paid too much or should have put more money down on their new homes
More than a quarter of those with regrets said they did not like their neighborhood..
And almost a quarter of homeowners had a regret about their yard., 12 percent wished for bigger yards, and 12 percent wish they had easier yards to maintain
While nearly seventeen percent of first-time buyers with regrets wish they had a different parking situation.
Similar results were found in a survey of new Canadian homeowners..
Sixty per cent of new Canadian homeowners admit to mistakes when buying a home. Top concerns were renovation costs (15%), smaller down payments (14%), and no home inspection (13%). http://ipsos-na.com/news-polls/pressrelease.aspx?id=6093
So, it appears that buying a new home raises issues similar to buying new equipment where attention is focused on the equipment’s features, financing, and the retail outlet where the equipment was purchased. For example, check out this website on buying a car.http://auto.howstuffworks.com/buying-selling/car-buying.htm
But buying a new home is not the same as buying a new car.
Buying a new home is the most important investment.a family will make. And a home’s future value is largely dependent on what happens in the neighborhood. That is why location is important.
Neighborhood crime is important.
Schools are important.
Road proposals are important.
City planning is important.
These are factors that will affect the value of a home..
Yet a home’s features and financing arrangements appear to be more important based on these survey results.
Maybe this is because buying a home is no longer viewed as an investment?
So why isn’t location taken more seriously by new home buyers?
One reason is that real estate agents cannot discuss changes in neighborhood demographics, social structure, crime, schools and religion because the Fair Housing Act protects certain groups from discrimination..
These groups are called a ‘protected class.’ The term refers to a group of people whom Federal law protects against illegal discrimination on the grounds of race or religion.
Recently, however, HUD ( (U.S.Department of Housing and Urban Development) changed these rules to ensure that every American is able to choose to live in a community they feel proud of, and these new fair-housing regulations are intended to give people access to better neighborhoods than the ones they currently live in..
HUD ‘s New Fair Housing’ Rules establishes diversity data for every neighborhood in the U.S http://www.cnsnews.com/news/article/huds-new-fair-housing-rule-establishes-diversity-data-every-neighborhood-us
HUD provides data for every neighborhood in the country,
detailing the access African American, Latino, Asian, and other
communities have to local assets, including schools, jobs,
transportation, and other important neighborhood resources that
can play a role in helping people move into the middle class.
So, real estate agents may soon be open to evaluating the neighborhood in which a new home is located.
Because new homes are such a major investment for most families the information gleaned from a neighborhood survey may be critical. to understanding how a property will be affected by its location.
Alternatively, new home buyers can first rent a home and then buy it after a trial period having decide they like living in their new neighborhood.
Location, location, location is still an important consideration when buying a new home.