Appreciation – Understanding A Home’s Value


A home is likely one of the most important financial decisions you’ll make in your life. It’s an investment in your future. Therefore, it makes sense to learn what drives value so you can align your lifestyle choices with good investment decisions as much as possible. Here are a few things to consider:


There’s a reason why “location, location, location” is a real estate mantra! Where you buy is likely the most important and controllable factor of appreciation. At the most basic levels of supply and demand, the land a home sits on is a limited commodity. The higher the demand for the area, the more likely a property is to increase in value over time. There are lots of important factors to consider about the location:

  • Access to mass transit: Busy metro areas are often where the high-paying jobs are concentrated. City dwellers may appreciate being able to navigate the city on mass transit, but the urban lifestyle doesn’t appeal to everyone. So when selecting homes in the suburbs, accessibility of mass transit and the ease of commuting can add value there too.
  • Shopping and services: Is the home close to shopping and other services that may be needed on a regular basis? Even buyers who prefer a quiet secluded, suburban location will appreciate convenient access to things like grocery stores.
  • Entertainment: What does the surrounding community have to offer? Are there restaurants, movie theaters, parks, protected open space? All of these features can add to the home’s appeal.
  • Schools: Even if you do not have school-aged children or any children at all, find out the reputation of the school district in the area. Good schools impact neighborhood desirability, which increases demand and helps boost property values.
  • Land: What does the actual lot have to offer? Homes tucked into cul-de-sacs may be in higher demand than those on a busy street. Is there a view? Are there power lines or other obstructions on or near the property that could impact appeal? Are there landscaping improvements that could increase appreciation potential?


Buying a home that has been well-maintained is a good way to ensure that your own maintenance costs will be minimized. Of course, this doesn’t mean you have to overlook a fixer-upper, but always request a home inspection prior to purchase. A certified home inspection can determine whether the home has indeed been well-maintained and give you an idea of what repairs may be required in the short and long term. Once the home is yours, take care of it and protect your investment! A well-maintained home will almost always command a higher price. So, keep copies of your inspection reports and maintenance records. This will help you stay on top of repairs and upgrades, and you can provide a future buyer with detailed information on the condition of the home and document updates that may add value.

History and Trends

What have home prices been doing in the region where you want to buy? How does price activity in the desired area compare to surrounding areas? An experienced real estate professional can help research and provide insight on pricing activity. In addition, local, national and even global economies can affect the real estate market. While no one has a crystal ball, forecasts that take into account what’s happening in the economy may help inform choices. For example,’s 2018 Housing Forecast points out several trends that could impact real estate decisions for buyers and sellers alike.

Borrowing Options

Take time to consider your options for home financing carefully. Work with a skilled loan advisor who will help you evaluate the details of your financial profile alongside your future plans. It’s important to look at the whole picture including how long you plan to live in the home, opportunities to improve credit, monthly payment thresholds, and optimal down payment options. Ideally you want to have your loan approved even before you begin house hunting to ensure that you can make a competitive offer quickly when the time comes. For home maintenance, your loan advisor can also advise on options to access equity for upgrades and repairs.

Being mindful of what drives the value of your real estate investment will help ensure that you maximize potential for appreciation and achieve your goals.

By Amy Malloy

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