Written by Ryan Cockerham; Updated July 26, 2018
Nov 15, 2014 In Plainville, where hundreds of construction workers are hammering away on the new Plainridge Park casino, home prices shot up 25 percent in September to $380,000. The town is undergoing a mini-residential construction boom, with a couple hundred apartments underway and dozens of new homes planned or being built.
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If you are in the process of buying a home or may be considering selling your home in the not too distant future, you have a vested interest in the current state of the housing market. Although a myriad of factors can affect housing prices, it is a commonly held assumption that the presence of commercial property (or the promise of future commercial development) can significantly impact the value of nearby homes. The nature of this impact can vary widely. Whether or not home prices rise or fall due to commercial property can depend on many variables, including the demographic that the commercial property targets, the size of the property and the anticipated number of customers it will attract, among others.
Congestion and Traffic
One of the biggest concerns that homeowners have when commercial developers begin purchasing plots of land close to them is whether or not the projects planned will significantly increase the amount of vehicle traffic in the area. A surefire way to hurt property values and reduce buyer interest in neighborhoods is to make them hard to access due to constant traffic.
A significant increase in the number of individuals near a residential area could also deter new parents who may be seeking a neighborhood that is safely isolated from denser areas. There are, of course, exceptions to this rule. Particularly in a city with a high population density, such as San Francisco, the presence of shops, restaurants and other commercial establishments could provide a boost in property value for nearby apartments, particularly if the commercial property caters to an affluent demographic.
Public Transportation
Residential properties in urban areas have been found to enjoy a boost in property value if they are located near transportation centers, such as train stations or San Francisco's BART system. Ultimately, this is due to the level of convenience these services provide. In situations where residents are unlikely to have their own form of transportation, such as a car, easy access to public transit can markedly increase demand for an apartment or condo in a prime location.
The Impact of Culture
Commercial properties can provide an ambiance and unique cultural atmosphere that add an indefinable 'polish' to an area, which attracts residents willing to pay higher prices for residential properties. With that in mind, it is quite likely that a collection of quality restaurants, clubs and shops may raise the property value of apartments and homes throughout the area in general. Of course, it goes without saying that the exact nature of the commercial properties will determine how the value of residential units is affected.
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About the Author
Property Value Increases By State
Ryan Cockerham who has written extensively within the real estate and finance domain. He has collaborated with a number of property management companies across the United States and UK to craft compelling and engaging content which approaches all aspects of property ownership from a compelling and accessible perspective.
Photo Credits
- Sold Home For Sale Sign on Burst image by Andy Dean from Fotolia.com
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