When you decide to buy a house, choosing a location is the next decision factor after budget. Yet the two are closely intertwined. A home's value per square foot is directly related to its location. So as you make your home location decisions, you may find yourself balancing the size of the house you want against the neighborhood you prefer.
Here are some of the factors to consider as you determine the right location for your next home.
Your Home Location Affects Commute Time
Generally home prices are higher near the center of a metropolitan community. This means that if you work downtown, it will cost you more to keep your commute shorter. This can be even more challenging if there are two of you who work in different sections of town. The best advice when considering commute time is to actually drive your potential commute at rush hour – both ways – at least once. This may feel like a waste of time but it's not. You will be driving that route five days a week if you buy in that area. You need to go into it understanding what that commute involves.
Homes that are further away from city centers are generally much more reasonably priced. You'll also find that most new home builders sell homes in outlying areas where they can buy large tracts of land inexpensively. It's tempting to buy a bigger place in a new community or one with larger lot sizes that are set further away. But before you jump into that purchase, be sure to evaluate how much an extra five/more hours spent commuting will affect your life.
Picking Your Home Location for Lifestyle
There can be other reasons to choose one location over another. When I first moved to Phoenix I was working downtown, and getting my Master's degree at night. School was a 45 minute drive from my office, but I chose to live closer to the University even though it meant an hour-and-a-half in my car every day. The reason? I knew I wouldn't miss work but didn't trust myself to continue taking classes with a long drive every night. That was a good decision. I ended up leaving the job and getting an assistantship, so I had a five-minute commute to work and school.
Choosing a location that is closer to family can be smart if you rely on parents or other family members for child care. You may prefer to find a home near the neighborhood you grew up in, where everything is familiar. Or it may be a group of friends, your church, or other personal preferences that lead you toward one area of town.
Home Location & Your Preferred Home Style
Do you dream of a big old Victorian or an old-fashioned farmhouse with a wrap-around porch? Maybe you want a modern, streamlined home with lots of floor-to-ceiling glass. Or it could be that your ideal is a three-bedroom, two-bath ranch house with a big backyard. Different neighborhoods have different types of homes. If you want an older home, look for the designated historic districts in your community. Just understand that the cost per square foot in those neighborhoods can be disproportionately high given the relative small size and work these houses need.
If you like the smaller ranch homes built during the 1950s and 1960s, you'll often find them in integrated neighborhoods where the homes look quite a bit alike. These homes were built by the production builders of their day. The good news is that they are time-tested. If you talk to your realtor often they can tell you which builders and neighborhoods have homes that have weathered the years well.
Are you willing to compromise on your dream home style to get into a neighborhood that would work well for you? Well, that's a personal decision. You might have to trade-off the inside of your potential home and the exterior style. Remember, while the outside look is important, it's the inside that you'll live with every day.
Choosing a Home Location Based on Value
There are never any guarantees that a home's value will rise, as we all saw between 2006 and 2010. Although a home is an investment, your main focus should always be living space for you and your family. That said, you should consider value when you choose a neighborhood. The best way to measure value in real estate is to look at dollars per square foot. While home features such as wood flooring or lovely kitchens contribute to a home's value, this measure is the one used first by home appraisers and mortgage companies.
Look at trends in your preferred home location. Are homes in the neighborhood going up in value? Your realtor can help you determine this, or one of the many websites like Zillow.com or Movoto.com where we got the chart below. You can also look at the streets themselves. Are the homes well-maintained? Are you seeing new retail stores and restaurants opening nearby? Are people renovating homes or putting on additions? All of these indicate that home values are improving in the neighborhood. On the other hand if the community has a number of closed businesses or the homes aren't well maintained, it may be going downhill.
Check on the reputation of the school system that serves your potential neighborhood. Even if you have no school-age children, the quality of the schools will affect resale value. And while resale may not seem important now, it should be part of every home buying and home improvement decision. (for more tips read: Buying A Home: What, Where & Why)
There are many online resources to research your top home locations by town name or zip code. In addition to home prices, you'll want to check out community demographics (good resource is City-Data.com for Scottsdale, to match data above) like who lives there, average household income and so much more. You can also go into city and county databases to investigate healthcare, transportation, crime rates and more. It's also smart to walk around and chat with your potential neighbors. Ask them what they like and don't like about the area. Most people will be honest about the strengths and weaknesses of their community.
Remember, when you're buying a home … you're buying the community too. Take time to find a community and neighborhood that fits your needs and personality. Visit open houses, drive around, and stop to eat and shop at local stores. Then you'll have a better notion if the neighborhood is the right home location for you.