During the last four spring selling seasons I’ve been hearing agents report that buyers are obsessed with finding a deal, and are oblivious to location. And each year this strikes the agents as a novel insight.
Real estate agents who work primarily with buyers often roam far and wide throughout Chicago and the suburbs, following the whims of their buyer clients. The great majority of those agents are clueless – at best – about the highly-specific factors that can drive significant change in property values in a small area.
Real estate agents who are unfamiliar with an area rely on comparable sales – recent history – in determining property values. Comparable sales don’t – and can’t – take into consideration pending changes that can cause property values to plummet.
Palatine Trib Local has a story about the closing of a neighborhood pool at Willow Wood Park that’s been an important underpinning of the community. A 17-year old resident told Trib Local her 6-year old brother would be “devastated” if the pool shuts down:
It’s terrible. Our whole neighborhood lives at that pool. I mean, that’s our lives,” she said. “We moved here because it was right across the street. It’s so nice to be able to wake up, throw your suit on and walk across the street to the pool. We’re all so crazy about it.
Will property values of homes fronting the park also be “devastated” by the pool’s closing? It’s highly likely to have an impact, but only someone who knows the neighborhood well can assess that impact.
What I do think I know is that chasing “the deal,” regardless of location, is an excellent way to wind up buying into a bad deal in a deteriorating location. Buyers would be better advised to focus on a neighborhood and understand it deeply enough to know whether it’s likely to trend up or down, and look for deals only in that neighborhood.
And then there’s a far more important consideration than a drop in property values – the possibility of a radical change in the lifestyle you thought you were buying.