In the bubble-market days, I saw seriously location-impaired houses sell. Really impaired! Stuff like a house under the highway entrance ramp, facing a multi-lane highway, on a busy street next to a gas station, on busy street next to an abandoned gas station, built into a rock – with no yard. Houses with this kind of unchangeable problem are tougher to sell in any market. In a true buyers market, they are nearly impossible to sell. There is a point where no price reduction is deep enough.
2010 was not in a true buyer’s market. Some houses that are location-impaired have been priced low enough to attract a buyer. From where I sit, as a buyer’s agent, buyers who choose houses in bad locations own houses that will always be wrong for the vast majority of possible future buyers.
The old saw “the only thing that matters in real estate is location, location, location” is frequently misunderstood. What is really means is that location has three levels: by metro area, by town or clusters of towns, in a very local sense.
I work in the Boston metro area and mostly in the towns immediately outside Boston proper. This is a “good” location. Most of the towns that I work in are also considered “good” locations (although some are better, and more expensive, than others.) In my practice, I spend a lot of time talking about location in the very local sense.
What makes a bad micro-location? Mostly, it is a condition that offends the senses of the typical buyer. Here are some examples:
Sight: a permanent structure which is ugly (like a warehouse) or blocks the light (like a wall of rock in the back yard a few feet from the foundation.) Sometimes a house too close can be enough to damn the house for sale in places where most houses have visual privacy.
Smell: a permanent structure that emits an odor or could cause significant, smelly pollution. Gas stations and fast-food restaurants are obvious examples. Also consider busy streets leave petro-chemical smell. Some streams smell, in season.
Sound: a business which has delivery early in the morning can create sound pollution each morning. Schools have bus traffic, as well as delivery. Also, people who work at home don’t all love the sound of children at play, nor are the bells announcing class a pleasure all day, every day. Of course, road noise is one that most buyers know to look out for; be sure to check that noise in the back yard, where it could be better or worse.
Touch: a business that has heavy trucking or other heavy machinery can make a house vibrate. Very annoying. The business often is ugly, too, but may be hiding behind bushes.
Taste: well, not really… Houses with bad taste are not necessarily locationally impaired.
What makes a bad location too bad to buy?
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