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Will casinos tank home prices?

Posted by Scott Van Voorhis July 3, 2013 08:11 AM

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Homeowners in the path of a new casino could take a hit on the value of their homes, a new report contends.

A study commissioned by the Realtor Association of Pioneer Valley estimates that homeowners in Springfield, West Springfield and Palmer could see their real estate values drop as much as 2.3 percent, or more than $3,000 in some cases, if a casino opens in their hometowns, The Republican in Springfield reports.

Gambling developers are pushing competing proposals in all three communities as they compete for the single Western Massachusetts casino license to be awarded by state officials.

Using the same numbers, the impact of casino development potentially could be even greater for homeowners in Greater Boston.

After all, while the median price in Springfield is a relatively modest $122,500, it is double, triple or quadruple that in many of the Boston area towns and cities in the shadow of various casino proposals.

In Milford, where Foxwoods wants to build a casino, a similar hit to home values would mean a loss of nearly $5,000 in Milford, where the median home price is $239,000, The Warren Group reports.

Surrounding communities like Hopkinton and Holliston, which have been adamantly opposed, could see an ever steeper hit.

Given the median price of a home in Hopkinton is over a half a million now, a 2.3 percent drop could mean $11,000 or more in lost value for homeowners in town.

That would wipe out any recent gains and then some, with the median home price in Hopkinton having risen 1.6 percent over the past year.

Holliston homeowners, where the median price is $364,000, could see a $7,000 plus hit as well.

Makes sense in theory, I guess, but I wonder if it matches the reality on the ground.

So far, the prospect of casino gambling coming to town has had the opposite effect in the string of lunch bucket neighborhoods and cities on the north side of Boston.

Rival proposals for casinos by Steve Wynn in Everett and Suffolk Downs in East Boston have sparked a surge in speculative real estate buying and helped drive up home prices.

The difference is there is a growing shortage of homes and condos for sale in the Boston area, with a potential influx of casino workers likely to put upward pressure on both prices and rents.

And there's also reason to question the gloomy Springfield predictions as well.

As it stands right now, the prospect that a casino might get built in downtown
Springfield is not exactly sending home prices plunging there.

Instead, home prices in Springfield are on the rise again, having jumped more than 20 percent over the past year, to $122,500, according to The Warren Group.

What's your take? Will casinos devastate home value or does it really depend on the town or city in question and local real estate market conditions?

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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