Valuing Real Estate on a Busy Street
Tuesday Apr 24th, 2018
I frequently am asked how much being situated on a busy street effects a property’s value.
There is no easy answer to this question. It depends on many factors including how busy the street is and the type of property be evaluated. It also depends on the local real estate market, specifically how much supply is on the market and how much demand is in the market.
All things being equal, a house on a neighbourhood through-fare will have a lower value than the same house on a quiet street. The value would be further effected if the street has 4 lanes, bus and truck traffic and a higher speed limit (i.e. above 50 km per hour).
In a buyer’s market where there are many available houses to choose from and fewer buyers in the market, the negative price effect would be greater than in a seller’s market when deficiencies such as a busy street may be overlooked by buyers who are desperate to find a home.
A condo apartment may be unaffected or may be positively affected by being on busy street as the majority of condo residents don’t have small children and may want to be close to shopping, restaurants, bars, etc.
I researched several blogs and articles on the subject and found a wide range of opinions ranging from a low of 2% to a high of 25%.
The low end seems appropriate for a home on a slightly busy street sold in a seller’s market. The high end would be appropriate for a home sold in a buyer’s market and located on very busy 4 lane street, with transit routes and a higher speed limit.
This “busy street” scenario goes to show how difficult accurately pricing a home can be. There is no standard figure that one can use for valuing a house on a busy street. It is always best to ask a real estate professional who has experience working in your area.