House Type And Market Value
One of the most important components in determining a house's market value and also one of the least controllable factors is the particular house in question. What this refers to is the location of the house, which encompasses the neighborhood it is situated in as well as the city it is in. For example, a two-story four-bedroom house in Iowa will be less expensive than if it were situated in New York City. This price differential is not based on the physical condition of the house in any way but rather based on the local real-estate market. If the particular house in question is situated in a city with a high-demand, low-supply real estate cycle, then it will it have a market value much higher than a house situated in a low-demand, high-supply local real estate market.
Location Location
From this example, it is easy to see how the market value of a house is never static. The same house in New York City could drastically decrease in market value based on the local real estate market, which can be adversely affected by a myriad of factors such as: national economic crisis, increased crime rate, depopulation in that area, etc.
Additionally, the market value of a particular house will increase or decrease based on the neighborhood it is located in. Certain neighborhoods will appeal to different segments of the population based on its location and also the type of residents that are present. For example, a house located in a suburban residential area full of families will appeal to families that are looking to purchase a house but probably not to a twenty-something individual with a high maintenance corporate job. Other neighborhood factors that will affect the market value of a house include: how safe the neighborhood is, what amenities are close to the neighborhood, and how close it is to a commercial center.
