What Factors Affect Residential Land Values in Maryland?
All homeowners need to be aware of the factors that influence land value. This knowledge will give you a very clear picture of how to value your existing property or what actions you can take to increase its value. These factors can be complex and intertwined, but many more are straightforward. This is true in every state, but this guide is going to specifically cover Maryland.
The old adage about the location being king in real estate is true. Property located in more affluent zip codes will generally fetch a higher price than property elsewhere, simply because of the reputation of the area where the land is located. On Maryland’s Eastern Shore, waterfront, water view and, water access are selling points that can’t be ignored. Proximity to desirable amenities, such as shopping, dining, transportation and more highly affect value as well. Schools are one of the biggest factors, and residential land near top-rated schools, such as Pikesville High, Franklin High and George Washington Carver High in Baltimore, are valued higher than land near lower-rated schools. If good schools are located nearby, and especially if the house is ideal for a family, not only will the value of the property be higher but it is also more likely to sell faster. The crime rate, whether perceived or real, heavily ties into this as well.
Land with a house on it is more valuable than undeveloped land. The undeveloped will increase in value if it is good for hunting or on water, for example, or does not have drawbacks, such as being located in a floodplain. Whether the property is on city utilities or not has a massive impact on the value of a piece of property as well.
State of the Property
A home or property that has not been well maintained will be valued considerably lower than a home or property that has. This means all regular maintenance should be done, and aging systems, such as heating and cooling, should be replaced with regularity. A new roof can recoup nearly all of its value when a house is sold. A property that has problems or needs major repairs will command less of an asking price than a property that has no issues at all, although age does play a factor. A qualified inspector can help you find and address problems that should be repaired before a home is sold or bought. This will factor into the price, but if an issue is fixed, the property could very well be assessed at a higher amount.
States of Adjacent Properties
The state of adjacent properties can also affect residential land values. The value of your home will increase if other homes in the neighborhood are in good condition, and decrease if you are located around unmaintained homes. Homeowners associations for new builds are becoming more common for this very reason – the association has the right to fine homeowners who are not maintaining the properties in order to keep the value of every property in the neighborhood up. When valuing your home, real estate agents and assessors typically look at comparable properties in the area to suggest a selling price, so what a similar house sold for in the same area will be used as a guideline for how much your property is worth. Homeowners worried about being next to an adjacent property that is not being maintained can go to their homeowners association, if applicable, the city, or the bank that owns the property if it is foreclosed, in an attempt to force the owners to properly maintain their property.
Upgrades and Features
Certain upgrades and features are known to be significant factors in how residential land is valued. Outside, features like pools and decks are well-known to add value to a property. Even simply keeping the yard neat and landscaped attractively will affect the value. Inside, things like hardwood floors and natural lighting are desirable. Rooms that are often cited as the most important for buyers are the kitchen and bathrooms, particularly the master bathroom. In Maryland, smart home features and integration are increasingly becoming desirable, as are green features because they cut down on energy costs significantly.
Zoning plays a major role as well. For example, if a lot has not been zoned for residential use, a home cannot legally be built on it and thus the value tends to be considerably less. Zoning laws apply to rural areas of the state as well, although they are more complicated in the urban centers – particularly Baltimore. Certain zoning classifications, such as the rare RAE, RAE-1 and RAE-2 designations in Baltimore county, allow for more units per acre than normal. These properties are worth substantially more than properties zoned for lower density – usually just allowing one single-family house per 40,000 square feet of land.
The State of the Micro and Macro Economy
Real estate values are also dependent on both regional and national economies. When the national or regional economy is doing well, property values tend to go up as well. Nothing illustrated this connection better than the Recession from 2008 to 2012. Things like GDP, unemployment and income growth understandably impact whether people are able to buy a house, or whether banks are comfortable giving out loans. Areas with high real estate growth, such as Prince George’s county, for example, display strong economies and are desirable places to live because of good income and low unemployment rates.
There are numerous factors that can affect the value of a property in Maryland. Location is perhaps the biggest, but the state of the property and the states and values of comparable properties also have a significant impact. Buyers and investors must be properly discerning and homeowners need to be knowledgeable in order to have a realistic picture of the value of their property. What’s most important is that you think ahead – real estate values do change considerably over time, so buy smart – buy properties that are predicted to increase in value rather than a decrease in value and ensure they have desirable features. You will end up with the highest-priced property when it comes time to sell.
With many variables affecting land/property value, you’re going to need a Realtor who can do the research that get you the best price. Craig Linthicum is your man with over 12 years of real estate expertise. Use the below form to contact Craig to find out how much your home is worth!
Craig Linthicum Has over 13 years of real estate experience as well as selling some of Maryland’s most expensive properties. He will utilize market research as well as negotiation skills to get you the best price. Get a free and instant home valuation to get an overview of what you home is worth.