One of my favorite songs, and in fact, I sang it to my children as a lullaby, is “On The Street Where You Live”. It’s from Lerner and Lowe’s My Fair Lady. In case you’re not familiar with it, here’s the film version:
On the street where I live, within about a ten-house span, there is a house listed for sale for $459,000, a house the owner is trying to sell himself, a foreclosed-upon house and a house for rent. What’s wrong this picture?
1) A random house for rent isn’t generally a cause for concern. However, the perception of a neighborhood full of rentals can be harmful. People think that it’s a transitory neighborhood and therefore the people who live there aren’t going to take long-term care of the property. Nor do they care about the property values and the general reputation of the area. When the people who live in a home OWN the home, they take better care of their investment and take steps to make sure that the house and neighborhood maintain their value.
2) The house that belongs to the bank, the foreclosed-upon one, looks horrible! The lawn is partially overgrown and spotted with brown in other areas. The paint is peeling. I haven’t gone inside. I know it’s going to be cold and soulless. Like with the house for rent, one foreclosure is not generally a problem. In fact, once it is listed for sale, it gives hope to the neighborhood – “Oh, look! Maybe someone will move in and take care of that place now!” But while it sits there, looking derelict, it brings the general impression of the neighborhood down.
3) The For Sale By Owner is also not a problem, of course. If someone wants to sell their house without representation, that’s their right. But I sort of cringe every time I drive by it. I know how hard it is to sell a house. I know it takes more than putting a sign up and some flyers out.
4) And all of these things together influence any would-be buyers of the $459,000 home. If you’re going to invest that amount of money in a market where the average home sale price is just under $205,000, you better be sure the neighborhood will support your investment. When the status of a street is a little questionable, any buyer will have to weigh carefully the pros and cons of spending that much money on a house.