10 Factors That Affect Property Value

Factors That Affect Property Value

The value of a property is determined by many different factors. As a homeowner or real estate investor, it’s important to understand what influences property values so you can make informed decisions. This article will explore the key factors that impact real estate values.

Key Takeaway: Property values are affected by location, property size and condition, market factors like supply and demand, interest rates, renovation potential, and economic conditions. Knowing what impacts home values can help sellers price their properties accurately and buyers negotiate effectively.

I’ve been a realtor for over 10 years, helping hundreds of clients buy and sell properties. In my experience, location and property condition are the two most critical factors influencing value from the buyer’s perspective. I’ll never forget the time I was showing a lovely family some fixer-upper homes in a less desirable part of town. Despite the affordable prices, they were disappointed in the location being far from amenities and jobs. We ended up finding them a smaller home in a better neighborhood, and they were thrilled even though it cost more. This showed me that location should come before size in most cases when evaluating property value.

Did you know that according to a survey by Richard Morrison, over 60% of recent home buyers said location was the most important factor shaping their purchase decision? In my experience as a realtor, buyers are often willing to sacrifice size, amenities, and even condition to get the location they want. 

Location Affects Property Value

Location is arguably the most important factor affecting a property’s value. Homes can vary substantially in price depending on the city, neighborhood, and even the street they are situated on. Properties located near employment centers, transit hubs, top-ranked schools, shopping, dining, and recreational facilities are highly desirable. Proximity to a vibrant downtown core, waterfront, or other natural amenities also boosts value.

Conversely, if a home is on a busy street, near industrial zones, its value will suffer. Here are some specific location factors that influence property value:

  • Access to public transit – Homes near major transit stops like train stations typically command higher prices. Easy access to buses and light rail is valued as well.
  • Proximity to downtown – Properties closer to a city’s downtown core or business district are more valuable due to convenient access to amenities.
  • Walkability – Walkable neighborhoods with pedestrian friendly streets and accessible services are highly sought after.
  • School zones – Homes zoned for top performing elementary, middle and high schools garner premium prices.
  • Parks and recreation – Close proximity to parks, trails, golf courses and other recreation facilities boosts value.
  • Waterfront – Direct waterfront locations like beaches and lakes see significant location premiums. Even being near water can add value.
  • Highways – While highway access offers convenience, associated noise can lower prices.
  • Crime – Areas with more property crime and violent crime tend to have depressed home values.
  • Nuisances – Factors like industrial zones, landfills, and airports create noise, odors, and safety issues that lower values.

Property Size

Larger homes with more living space will command higher prices than smaller ones, all else being equal. The standard measure used is price per square foot. The market value of a 2,000 square foot house on a given street will be higher than a 1,500 square foot home next door. Most home buyers instinctively equate more area with more value.

Here are some important considerations around property size:

  • Total square footage above grade
  • Basement finished vs. unfinished square footage
  • Primary bedroom and bath size
  • Number of bedrooms and bathrooms
  • Size of additional living spaces like family room, dining room, dens
  • Outdoor living areas like decks, patios and balconies
  • Garage/parking size and number of spaces
  • Storage spaces like attics and closets
  • Lot size

As a real estate professional, I always pay close attention to the finer details around exactly how much usable living space a property offers. 100 square foot difference between two 1,500 square foot homes could justify a sizable price difference if one has larger bedrooms for instance. 

Age and Condition

The age and condition of a home impact what buyers are willing to pay. Well-maintained properties in move-in condition typically sell for 10-15% more than homes needing significant repairs or upgrades. Outdated kitchens, baths, flooring, lighting, and materials can give buyers pause. Even if structurally sound, homes with dated finishes often sell for below market rates.

Elements to inspect closely include:

  • Roof – Age, type, and condition. Older roofs or evidence of leaks lowers value.
  • Windows – Energy efficient modern windows add value. Drafty old windows detract value.
  • Siding – Freshly painted and well-maintained siding looks appealing. Fading, cracked siding appears neglected.
  • Landscaping – Well-designed landscaping with mature trees and plants adds curb appeal. Overgrown lots appear unkempt.
  • Driveway – Smooth driveways free of cracks show better. Pitted, cracked, stained driveways signal deferred maintenance.
  • Interior finishes – Modern, neutral paint colors and updated finishes add value. Wallpaper, busy paint patterns, and dated finishes deduct value.

Home buyers notice every detail when evaluating age and condition. As their agent, I pay sharp attention to even minor flaws to provide appropriate counseling on pricing and negotiations.

Real Estate Market Factors

Beyond individual property characteristics, broader market factors influence value including supply/demand dynamics and interest rates. These indicators can foreshadow price trajectory in the months ahead.

Supply and Demand Affect Market Value

When demand exceeds supply for a certain type of home in a given area, prices rise accordingly. More buyers compete for limited inventory, bidding up values. In hot markets, prices can escalate rapidly, sometimes exceeding fundamentals. When supply outpaces demand however, prices stagnate or even decline as buyers gain negotiating leverage with more choices available. Tracking supply/demand dynamics provides insight on market strength and where prices are headed.

Interest Rates & Mortgage

As interest rates for mortgages rise, buyers’ purchasing power diminishes since higher rates increase monthly carrying costs. This causes demand to slacken, taking pressure off prices. Lower interest rates conversely stimulate demand, as home ownership becomes more affordable.

When rates trend higher, it signals me as an agent that buyers will be more price sensitive and have less buying power. We may need to price homes a bit lower and be flexible on offers to attract buyers who’ve been sidelined by affordability concerns. When rates move downward however, it tells me buyers have more budget flexibility which allows us to potentially push for higher sales prices. Tracking interest rate movements provides valuable context.

Prices Of Comparable Properties

Comps refer to prices recently paid for comparable properties in the subject home’s neighborhood. Comparable factors include location, lot size, square footage, bedrooms/bathrooms, condition, and year built. Comps indicate what buyers have been willing to pay for similar homes and provide a baseline for pricing expectations.

Renovation Potential

Many buyers seek homes with renovation potential, where they can customize to their tastes over time through upgrades. Properties allowing additions, finished basements, or redesigned layouts are prized for their flexibility. Even turnkey homes can be adapted cosmetically through new kitchens, bathrooms, flooring etc. 

Here are some renovation factors I keep top of mind:

  • Zoning – What is allowed or restricted by municipal zoning and permits?
  • Unfinished spaces – Can basements and attics be finished into living spaces?
  • Expandable lot – Room to add extensions, ADUs, garages?
  • Open layout – Can walls be removed to create more open flowing space?
  • Outdoor space – Backyards, patios or decks that can be improved and expanded.
  • Systems – Are electrical, plumbing, HVAC systems up to date and adequate?
  • Foundations/structure – Solid enough to support additions and expansions?
  • Kitchen/bath – Opportunities to upgrade to more modern high-end finishes.

Home buyers today want flexibility and personalization. Identifying properties with renovation potential and factoring that into pricing is key.

Economic Factors

Local economic health significantly sways property values. In robust economies with strong job/wage growth, demand for housing strengthens. Buyer pools expand, applying upward pressure on prices. Conversely, troubled economies with anemic job markets and pay see property demand and values decline.

Economic factors I monitor that influence the real estate market include:

  • Employment rates – Low unemployment lifts demand as more people can afford homes. High unemployment dampens demand.
  • Job/wage growth – Rising wages gives buyers more purchasing power. Stagnant wages constrain demand.
  • Migration patterns – Positive net migration creates housing demand. Negative net migration softens market.
  • Foreclosure rates – High rates of foreclosures, distressed sales and tax sales in Vancouver drag down values.
  • New construction – More new construction boosts inventory, moderating prices. Less building applies upward price pressure.

By tracking macroeconomic indicators, I can better advise clients on where the market may be headed months ahead. Strong economies support rising property values while weak ones signal value declines.

FAQs:

Q: What are some factors that can affect the value of a home?

A: There are several factors that can affect the value of a home, including the condition of the property, the location and property size, the demand for property in the area, the prices of comparable properties, the availability of public transportation, and the overall state of the housing market.

Q: How does the condition of the property impact its value?

A: The condition of the property, including both the interior and exterior, can have a significant impact on its value. A well-maintained home with updated features is likely to have a higher value compared to a property that is in poor condition or in need of repairs.

Q: Do upgrades and updates to a home increase its value?

A: Yes, upgrades and updates to a home can increase its value. Adding modern features and amenities, such as a renovated kitchen or bathroom, or upgrading the HVAC system or flooring, can make the property more appealing to buyers and potentially result in a higher selling price.

Q: How do real estate comps affect the value of a property?

A: Real estate comps, or comparable properties, play an important role in determining the value of a property. Appraisers and real estate agents use the prices of comparable properties in the area to establish a fair market value for a specific property.

Q: What role does supply and demand play in the housing market?

A: Supply and demand have a direct impact on the housing market and the value of properties. When there is high demand and limited supply, property prices tend to increase. Conversely, when there is low demand and a surplus of properties on the market, prices may decrease.

Q: How do economic indicators influence the value of a home?

A: Economic indicators, such as interest rates and job market conditions, can have a significant influence on the value of a home. Lower interest rates can make it more affordable for buyers to purchase a home, leading to increased demand and potentially higher prices.

Q: Can the age of a home impact its value?

A: Yes, the age of a home can impact its value. Older homes may have certain charm and character, but if they require significant repairs or lack modern features, they may have a lower value compared to newer, more updated properties.

Q: How does the usable space affect home value?

A: The usable space of a property, including the square footage and layout, can influence its value. Generally, properties with more usable space, such as additional rooms or a finished basement, have a higher value compared to properties with limited usable space.

Conclusion

Estimating a home’s market value is an art honed through experience. While online calculators provide ballpark figures, nuanced understanding of multiple influential factors is required for accuracy. Beyond the factors outlined here, elements like zoning regulations, environmental issues, neighborhood nuances, and natural amenities all weigh in. Paying attention to what drives value when buying, selling or investing in real estate leads to smarter decisions and better outcomes.


Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.

Lets Have a Smart Conversation.

Let's Chat! Looking for a REALTOR© who can exceed your expectations? Look no further than Richard Morrison! His mission is to serve without limit & provide solutions that cater to your core needs.
* 20+ Years of Experience
* Medallion Member
* RE/MAX Hall of Fame

Your Privacy is important to us. View our Privacy & Data Collection Policy.

Latest Vancouver Listings

Active
$968,000
206 1561 W 57TH AVE, Vancouver Apartments for sale, MLS® R2852833

Bed: 1Bath: 1Built in 2019790 sqft

3 mins ago

Bed: 1Bath: 1Built in 2019790 sqft

BEST UNIT in Shannon Wall Centre Kerrisdale - Secluded behind heritage...

$968,000

MLS®: R2852833 Sunstar Realty Ltd.

3 mins ago

Active
$1,295,000
1637 EASTERN AVE, North Vancouver Houses for sale, MLS® R2853009

Beds: 2Baths: 3Built in 20131227 sqft

29 mins ago

Beds: 2Baths: 3Built in 20131227 sqft

Rarely available Local on Lonsdale Townhome! Concrete build, end unit....

$1,295,000

MLS®: R2853009 Oakwyn Realty Ltd.

29 mins ago

Active
$2,280,000
2890 W 6TH AVE, Vancouver Real Estate for sale, MLS® R2852860

Beds: 6Baths: 2Built in 19221790 sqft

1 hour ago

Beds: 6Baths: 2Built in 19221790 sqft

Prime location in the heart of Kitsilano! Nestled on a quiet tree-lined...

$2,280,000

MLS®: R2852860 RE/MAX Select Properties

1 hour ago

Active
$1,988,000
949 E 27TH AVE, Vancouver Real Estate for sale, MLS® R2852854

Beds: 5Baths: 2Built in 19642110 sqft

2 hours ago

Beds: 5Baths: 2Built in 19642110 sqft

Investors, Builders & Renovators! Prime location in the "Main&...

$1,988,000

MLS®: R2852854 Dexter Realty

2 hours ago

Active
$2,085,000
788 BLYTHWOOD DR, North Vancouver Houses for sale, MLS® R2852841

Beds: 3Baths: 2Built in 19521765 sqft

2 hours ago

Beds: 3Baths: 2Built in 19521765 sqft

Rarely available - tastefully renovated 3 Bedroom & 2 Bathr Rancher...

$2,085,000

MLS®: R2852841 Engel & Volkers Vancouv...

2 hours ago

Active
$6,280,000
3741 W 37TH AVENUE BC, Vancouver, R2852830

Beds: 6Baths: 6Built in 20154010 sqft

2 hours ago

Beds: 6Baths: 6Built in 20154010 sqft

Situated at the prestigious Dunbar neighbourhood, this elegant custom...

$6,280,000

MLS®: R2852830 Royal Pacific Lions Gate Re...

2 hours ago

Active
$2,958,000
2938 DISCOVERY ST, Vancouver Home for sale, MLS® R2852829

Beds: 5Baths: 2Built in 19253198 sqft

2 hours ago

Beds: 5Baths: 2Built in 19253198 sqft

Location! Location! Location! A buildable lot in the heart of Point Grey ....

$2,958,000

MLS®: R2852829 SRS Westside Realty

2 hours ago

Active
$4,580,000
4372 CAROLYN DRIVE BC, North Vancouver, R2852820

Beds: 7Baths: 6Built in 20175201 sqft

2 hours ago

Beds: 7Baths: 6Built in 20175201 sqft

Welcome to this exquisite residence crafted by Noort Homes in 2017....

$4,580,000

MLS®: R2852820 RE/MAX Crest Realty

2 hours ago

Active
$2,198,000
1131 W KEITH RD, North Vancouver Houses for sale, MLS® R2852815

Beds: 3Baths: 3Built in 19472771 sqft

2 hours ago

Beds: 3Baths: 3Built in 19472771 sqft

SOAK IN THE CITY VIEWS FROM YOUR PEMBERTON HEIGHTS HOME. This private...

$2,198,000

MLS®: R2852815 eXp Realty

2 hours ago

Active
$4,998,000
1615 CHIPPENDALE RD, West Vancouver Houses for sale, MLS® R2852802

Beds: 6Baths: 5Built in 20045484 sqft

2 hours ago

Beds: 6Baths: 5Built in 20045484 sqft

Perched majestically in prestigious Canterbury, West Vancouver, this...

$4,998,000

MLS®: R2852802 Royal Pacific Realty Corp.

2 hours ago

Active
$799,000
903 155 W 1ST ST, North Vancouver Condos for sale, MLS® R2852818

Bed: 1Bath: 1Built in 2004737 sqft

3 hours ago

Bed: 1Bath: 1Built in 2004737 sqft

Step into the heart of LoLo with this practical yet stylish one-bedroom...

$799,000

MLS®: R2852818 Royal LePage Sussex

3 hours ago

Active
$799,000
202 118 W 22ND ST, North Vancouver Condos for sale, MLS® R2852816

Bed: 1Bath: 1Built in 2004806 sqft

3 hours ago

Bed: 1Bath: 1Built in 2004806 sqft

This beautifully renovated 1-bed, 1-bath 800 sqft corner unit condo in...

$799,000

MLS®: R2852816 eXp Realty

3 hours ago

Active
$1,999,000
2070 E 26TH AVE, Vancouver Real Estate for sale, MLS® R2852792

Beds: 4Baths: 2Built in 19241410 sqft

3 hours ago

Beds: 4Baths: 2Built in 19241410 sqft

Investor/builder alert! Prime development lot in the desirable Trout Lake...

$1,999,000

MLS®: R2852792 Rennie & Associates Rea...

3 hours ago

Active
$1,899,000
3079 GRAVELEY ST, Vancouver Houses for sale, MLS® R2852788

Beds: 4Baths: 2Built in 19382167 sqft

3 hours ago

Beds: 4Baths: 2Built in 19382167 sqft

Welcome to an attractive character house ! This well-maintained spacious...

$1,899,000

MLS®: R2852788 Multiple Realty Ltd.

3 hours ago

Active
$2,698,000
3081 W 3RD AVE, Vancouver Real Estate for sale, MLS® R2852771

Beds: 3Baths: 2Built in 19261789 sqft

3 hours ago

Beds: 3Baths: 2Built in 19261789 sqft

Stop looking for your new Kitsilano character home – It’s Here! Enjoy...

$2,698,000

MLS®: R2852771 Pospischil Realty Group

3 hours ago

Active
$1,348,000
707 89 W 2ND AVE, Vancouver Condos for sale, MLS® R2852794

Beds: 2Baths: 2Built in 20131105 sqft

4 hours ago

Beds: 2Baths: 2Built in 20131105 sqft

For those who appreciate great layouts. Fantastic corner 2 Bedroom + Den...

$1,348,000

MLS®: R2852794 Anson Realty Ltd.

4 hours ago

Active
$719,000
316 322 E 15TH AVE, Vancouver Condo for sale, MLS® R2852782

Bed: 1Bath: 1Built in 2024441 sqft

4 hours ago

Bed: 1Bath: 1Built in 2024441 sqft

WELCOME TO E15 JUST OFF MAIN! Step into magnificence w/ this exquisite one...

$719,000

MLS®: R2852782 eXp Realty

4 hours ago

Active
$1,588,000
902 885 CAMBIE STREET BC, Vancouver, R2852769

Beds: 3Bath: 1Built in 20211084 sqft

5 hours ago

Beds: 3Bath: 1Built in 20211084 sqft

The Smithe by Boffo in Downtown is designed by the award-winning GBL...

$1,588,000

MLS®: R2852769 Dracco Pacific Realty

5 hours ago

Active
$1,169,000
308 3581 E KENT AVE NORTH, Vancouver Apartment for sale, MLS® R2852765

Beds: 3Baths: 2Built in 20191147 sqft

5 hours ago

Beds: 3Baths: 2Built in 20191147 sqft

Welcome to Avalon 2, where you get the most out of urban lifestyle. This...

$1,169,000

MLS®: R2852765 Macdonald Realty

5 hours ago

Active
$1,298,888
104 4988 CAMBIE ST, Vancouver Condo for sale, MLS® R2852803

Beds: 2Baths: 2Built in 2020918 sqft

5 hours ago

Beds: 2Baths: 2Built in 2020918 sqft

Welcome to Hawthorne at Queen Elizabeth Park. Centrally located on the...

$1,298,888

MLS®: R2852803 Keller Williams Realty VanC...

5 hours ago

Start your search with Richard Morrison, Top Award Winning Vancouver Realtor:

Contact Richard Morrison Top Vancouver Realtor today to find a Vancouver real estate and Vancouver condos for sale. This includes eastside residences and eastside apartment for sale. Also check out West Vancouver homes for sale or maybe an West Vancouver condos for sale. If you prefer North Shore, take a look at our listings in North Vancouver homes for sale and North Vancouver condos for sale.

Vancouver East Houses

Collingwood
Downtown East
Fraser
Fraserview
Grandview
Hastings
Hastings Sunrise
Killarney
Knight
Main
Mt Pleasant
Renfrew Heights
Renfrew
South Van
Victoria

Vancouver West Houses

Arbutus
Cambie
Dunbar
Kerrisdale
Kitsilano
McKenzie Heights
Marpole
Oakridge
Point Grey
Quilchena
SW Marine
Shaughnessy
South Cambie
South Granville
University
West End

Vancouver East Apartments

Champlain Heights
Collingwood
East Downtown
Fraser
Grandview Woodland
Hastings
Hastings Sunrise
Killarney
Knight Condos
Main
Mount Pleasant VE
Renfrew Heights
Renfrew
South Marine
South Van
Strathcona
Victoria VE

Vancouver West Condos

Arbutus
Cambie
Coal Harbour
Downtown VW
Dunbar
Fairview
False Creek
Kerrisdale
Kitsilano
Marpole
Mount Pleasant VW
Oakridge
Point Grey
Quilchena
S.W. Marine
Shaughnessy
South Cambie
South Granville
Southlands
University
West End VW
Yaletown
img

Richard Morrison

My name is Richard Morrison and I aim to empower people to buy and sell real estate in the most effective way possible. I can service all of your Metro Vancouver real estate needs & beyond. I specialize in Vancouver, North Vancouver, West Vancouver, Vancouver West, Richmond, Burnaby and other areas in the Lower Mainland BC Canada. You can be assured that whether buying or selling your home, I will get the job done. I offer a full compliment of real estate services with 15+ years of experience. About Richard Morrison

Related posts

Preparing A House For Sale For High ROI

Prepare Your Home For Sale Are you gearing up to sell your house and want...

Continue reading
by Richard Morrison

Legal Fees To Sell A Home In British Columbia

Navigating through the process of selling a house in BC, Canada can be quite daunting,...

Continue reading
by Richard Morrison

Tips For Selling a Home With Pets

Moving is stressful for everyone, including our furry friends. As a homeowner preparing to...

Continue reading
by Richard Morrison