How Does Your Location Affect Your Homes Worth?

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It’s often said that “home is where the heart is,” but the ZIP code you reside in can significantly impact your home’s value. In fact, some people consider the location to be the most important factor associated with the property.

For most people, the quality of life factors are essential: Are the nearby schools and public services satisfactory? Is the community safe? What is the commute time to work from here? The answers to these questions can directly impact the worth of your home. Additionally, consider the condition of the roads and whether they are plowed during winter or repaired as they age. Additionally, zoning matters need to be considered such as whether a strip mall is planned nearby or if street widening is on the agenda for your street [source:].

Aside from these considerations, it’s possible that you may be living in the next “hot spot” without even realizing it. Consider the story of Google and a neighboring town.

Atherton, California is a small town near Google’s headquarters in Mountain View, located in the heart of Silicon Valley.

In 2004, something peculiar happened to Atherton: Google employees began buying up real estate. This began in September when the first set of employees could legally sell stock in the company after a lockup period set by the Securities and Exchange Commission [source: Tam and Mangalidan]. Software developers who were once struggling in college had suddenly become millionaires overnight.

Atherton was already wealthy, but the influx of “new money” led to bidding wars on real estate. In 2011, the median home price exceeded $4 million, making Atherton’s 94027 ZIP code the second most expensive in the United States, following only Duarte, California in Los Angeles County (91008) [source: Forbes].

There are several examples of similar unexpected changes in established neighborhoods.

In New York City, the Upper East Side had been the most expensive place to live for years, along Central Park. If your ZIP code was 10021, you knew you had made it. However, in 2007, the post office split the ZIP code into three parts, adding 10065 and 10075. U.S. Rep. Carolyn Maloney cited population growth as the reason behind the change. Suddenly, notable residents like media giant Rupert Murdoch and novelist Tom Wolfe were no longer residing in the most sought-after ZIP code in America [sources: Roberts, Shapiro].

Just like in real life, time can heal wounds. Interestingly, those who reside in the affluent ZIP code may need to consider relocating a few blocks away. Forbes’ list of the most expensive ZIP codes in 2010 ranked the new 10065 as seventh on the list. Meanwhile, 10021 fell behind at number 25.

Undoubtedly, your address can impact the value of your home. However, the extent of this impact can vary. Factors such as the quality of education and crime rates associated with your address, street quality, and property upkeep of your neighbors can all influence your home’s value. Additionally, unique circumstances specific to your area may come into play (such as the emergence of an internet giant next door). Research what is within your control and engage with local residents to stay informed of any unexpected changes.

Even in a challenging market, it is important to remain optimistic about the potential of your property. Change may be on the horizon, and you never know what your neighbor’s child could achieve – they may even create the next Google.

Additional Information

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  • “Frequently Asked Questions.” April 20, 2011.
  • Roberts, Sam. “An Elite ZIP Code Becomes Harder to Crack.” The New York Times. March 21, 2007. (April 4, 2011)
  • Shapiro, Gary. “Fanciest Postal Code is About to Be Split Up.” The New York Sun. March 19, 2007. (April 4, 2011)
  • Tam, Pui-Wing and Mylene Mangalindan. “Searching for a Home in Atherton, Calif.? Look Out for Googlers; As Employees Cash In Stock, Bidding Wars Escalate; A $3.5 Million Tear-Down.” The Wall Street Journal. July 12, 2005.


1. Does the location of my home within my neighborhood affect its value?

The location of your home within your neighborhood can definitely affect its value. Homes on busy streets or near commercial properties may have a lower value than those on quiet residential streets. Additionally, homes with desirable features such as a view or proximity to parks may have a higher value.

2. How much does the quality of the neighborhood affect my home’s value?

The quality of the neighborhood can have a significant impact on your home’s value. Neighborhoods with low crime rates, good schools, and nearby amenities such as shopping and entertainment tend to have higher property values than those without these features.

3. Does the zip code of my home affect its value?

The zip code of your home can affect its value, as certain zip codes may be associated with higher or lower property values. This can be due to factors such as the cost of living in the area, the local job market, and the proximity to desirable amenities.

4. How does the condition of my home affect its value?

The condition of your home can have a significant impact on its value. Homes that are well-maintained and in good condition will generally have a higher value than those that are run-down or in need of repairs. This is because buyers are typically willing to pay more for a home that is move-in ready and requires little work.

5. Can the history of the area affect my home’s value?

The history of the area can have an impact on your home’s value. For example, if a property is located in an area with a high crime rate or a history of environmental issues, this may lower its value. Conversely, if an area has a rich history or cultural significance, this may increase the value of properties in that area.

6. How do nearby properties affect my home’s value?

The value of your home can be affected by nearby properties. For example, if there are several homes on your street that are in poor condition or have been foreclosed on, this may lower the value of your home. On the other hand, if there are several well-maintained homes with desirable features nearby, this may increase the value of your home.

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