When you’re searching for your dream home in Austin, it’s easy to get swept up in the features you can see and touch—the sparkling new kitchen, the spacious primary suite, or the beautifully landscaped backyard. But one of the most critical aspects of your home’s long-term value is something you can’t change: its location.
We often tell our clients that the best time to think about selling a home is right before you buy it. This mindset is crucial because it forces you to evaluate a property not just as a place to live, but as a significant financial investment. A home’s location is permanent. While you can renovate a dated bathroom or paint over a questionable color choice, you can’t move your house away from a noisy freeway or a busy commercial strip. These unchangeable factors are known as locational flaws, and they can have a substantial impact on your home’s future resale value.
For first-time homebuyers in Austin, understanding these potential drawbacks is especially important. You want to ensure your first major asset is one that will appreciate and be desirable to a wide pool of buyers when you’re ready to sell. Let’s explore the top nine locational flaws that can affect Austin home values, so you can make a confident and informed purchase.
Why Locational Flaws Are So Critical to Resale Value
In real estate, “location, location, location” is more than just a catchy phrase; it’s a fundamental principle. A property’s surroundings dictate its desirability, and therefore, its market value. Locational flaws are elements of a property’s environment that can deter potential buyers. Even if these factors don’t bother you personally, they can shrink your pool of interested buyers down the road.
A smaller buyer pool often means:
- Longer time on the market: Your home may take more time to sell compared to similar properties without these flaws.
- Lower selling price: To compensate for the locational issue, you may have to list your home at a lower price or accept a lower offer.
This doesn’t mean you should automatically rule out a home with a locational flaw. In fact, these properties often come with a lower price tag, making them more accessible. The key is to go in with your eyes wide open. If you buy a home with a locational flaw at a discount, you should expect to sell it at a discount. Understanding this from the beginning helps you make a sound financial decision and avoid surprises when it’s time to sell.
1. Backing to or Being on a Busy Street
We often refer to this as the “double yellow line rule.” If a home is situated on a street with a double yellow line or backs up to one, it’s a red flag for many potential buyers. The reasons are both practical and emotional. For families with young children or pets, the safety risk of a high-traffic road is a major concern. The constant noise from cars, trucks, and motorcycles can also disrupt the peace and quiet that many people seek in a home.
Impact on Resale Value:
Homes on busy streets can sell for 10-20% less than comparable homes on quiet, interior streets. When you’re ready to sell, you’ll find that a significant number of buyers, especially families, will filter out your property from their search immediately. This can lead to a longer listing period and pressure to lower your asking price to attract the remaining interested parties.
2. Proximity to Commercial or Industrial Property
Imagine finding a lovely home, only to discover it’s next door to a strip mall, a mechanic’s shop, or an industrial warehouse. The mix of residential and commercial or industrial spaces is often a turn-off for homebuyers. These properties can bring increased traffic, noise, unpleasant odors, and can be a general eyesore. Light pollution from signs and parking lots can also be a nuisance.
Impact on Resale Value:
The negative impact on value can vary depending on the type of commercial property. A quiet office building might have a minimal effect, but a loud bar, a 24-hour fast-food restaurant, or a manufacturing plant could decrease a home’s value significantly. Buyers will be thinking about the daily inconveniences and the potential for future development that could be even less desirable. When selling, you’ll need to price your home competitively to compensate for these drawbacks.
3. Backing to a Freeway
Living near a major freeway like I-35, MoPac, or Highway 183 offers undeniable convenience for commuting around Austin. However, living right next to one is a different story. The relentless noise from traffic, day and night, is a major deterrent. While some people claim they get used to it, the “white noise” of a freeway is a deal-breaker for a large segment of the market. Air quality concerns from vehicle emissions can also be a factor for health-conscious buyers.
Impact on Resale Value:
Properties that back directly onto a freeway can see a significant reduction in value. The discount required to attract a buyer can be substantial, as you are marketing to a much smaller audience—those who prioritize convenience over tranquility. Even with sound-dampening windows or a privacy fence, you can’t entirely eliminate the presence of a major highway.
4. Being Next to a Convenience Store or Gas Station
Convenience stores and gas stations are magnets for traffic at all hours. While it might seem handy to have a place to grab milk or gas just a few steps away, living next to one comes with downsides. These establishments often have bright lights that stay on all night, a steady stream of cars and customers, and can sometimes attract loitering, which may raise safety concerns for potential homeowners.
Impact on Resale Value:
A home adjacent to a 24/7 convenience store will likely be perceived as less private and less secure by many buyers. The constant activity can disrupt a peaceful home environment. Consequently, these properties tend to sell for less and can be more difficult to market. You’ll be looking for a buyer who values convenience above all else and is willing to overlook the potential disturbances.
5. Living Near a High School
Having a home near a reputable school is often a huge selling point in Austin. However, living directly next to a large high school presents a unique set of challenges. The school day brings a surge of traffic from student drivers, parents, and school buses, often leading to congested streets and a lack of on-street parking. School events, like football games on Friday nights, can bring noise and crowds.
Impact on Resale Value:
While being in a good school district boosts value, being too close to the high school itself can have the opposite effect. Buyers who work from home or don’t adhere to a standard 9-to-5 schedule may be particularly bothered by the daytime commotion. When it’s time to sell, you may find that your ideal buyer is someone who works outside the home during school hours and isn’t bothered by the increased activity.
6. Proximity to a Fire Station
This is a locational flaw with mixed opinions. On one hand, some buyers appreciate the peace of mind that comes with knowing emergency services are just seconds away. This can even lead to lower homeowner’s insurance premiums. On the other hand, fire stations are sources of loud, sudden noise. The blare of sirens at any hour, including 3 a.m., is a significant drawback for light sleepers and those who crave a quiet environment.
Impact on Resale Value:
The impact on resale value is less predictable than with other flaws. For some, it’s a non-issue or even a slight positive. For others, it’s an absolute deal-breaker. Because it polarizes buyers, it can still shrink your potential buyer pool, potentially leading to a longer time on the market until you find a buyer who falls into the “pro” or “indifferent” camp.
7. Near Train Tracks
The romantic notion of a train whistling in the distance is quite different from the reality of living next to active railroad tracks. Trains are incredibly loud, create ground vibrations, and operate at all hours. In many areas, they are required to blow their horns at intersections, adding another layer of noise intrusion.
Impact on Resale Value:
Homes located near train tracks almost always sell at a discount. The level of impact depends on the frequency of the trains and how close the property is to the tracks. When you purchase such a home, it’s essential to find out the train schedule. Even with this information, future changes in rail traffic are always possible. Be prepared for this to be a major point of negotiation when you eventually sell.
8. Under High-Voltage Power Lines
Large, high-voltage power lines are not only an eyesore, but they also come with perceived health risks that scare many buyers away. While scientific evidence on the health effects of living near power lines is inconclusive, the fear itself is enough to devalue a property. We’ve worked with many buyers who won’t even step inside a home if they see these towering structures nearby.
Impact on Resale Value:
This is one of the most significant locational flaws. The visual blight alone is enough to deter a large percentage of buyers. Coupled with health concerns, properties under or adjacent to high-voltage power lines can see a value decrease of up to 30%. Selling a home with this flaw often requires a deep discount and a patient marketing strategy to find a buyer willing to overlook it.
9. Next to a Water Tower
Water towers are a common feature of the suburban landscape, but few people want one as their next-door neighbor. While they pose no known health risks, they are often seen as large, unattractive structures that dominate the view. Buyers often prefer to look at trees, a park, or even other houses rather than a massive metal tank.
Impact on Resale Value:
The impact of a water tower is primarily aesthetic. It’s an incurable eyesore. Homes with a direct and unobstructed view of a water tower may sell for less than their counterparts with more appealing sightlines. The effect on value might not be as dramatic as that of a freeway or power lines, but it can still be a hurdle to overcome when selling.
Should You Buy a Home with a Locational Flaw?
After reading this list, you might be tempted to run from any property with these issues. But that’s not our message. Buying a home with a locational flaw can be a smart move, provided you do it right. These homes can be a gateway to entering a desirable neighborhood or a larger property that might otherwise be out of your budget.
The key is to ensure you are compensated for the flaw in the purchase price. Work with your real estate agent to analyze comparable sales of homes with and without similar flaws to determine a fair market value. If you buy it at a discount, you can enjoy the home and still be in a solid financial position when it’s time to sell, as you’ll pass that discount along to the next buyer.
Need Help Navigating the Austin Real Estate Market?
Evaluating a home’s long-term investment potential requires expertise and a keen eye for detail. As experienced Austin buyer’s agents, we do more than just unlock doors. We help you critically assess every aspect of a property, including its location, to ensure you’re making a wise investment.
With a combined 55+ years of experience, our team has seen it all and can guide you through the complexities of the Austin market. If you’re looking for a partner who will protect your interests and help you build a strong financial future, we might be the right fit.
Learn more about our approach in our Austin Home Buyer Guide, or contact us directly to get started. You can call us at (512) 827-8323, email us at info@11OaksRealty.com, or fill out our Buyer Survey.
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