The City or the Suburbs?
In most parts of the country, you are likely to have a choice among the city, suburbs, or country. Most of that decision will be made based on your personal choice. There are some other factors that could enter into your decision, however.
If you are now in the city and hold a city job, residing within those metropolitan borders may be required by law. If you think that may be the case, investigate before you go house hunting in the suburbs. In fact, if you work for any regional government entity, you should investigate possible residency requirements.
Table 7.1 Location of Home Purchased
Source: The 2007 National Association of Realtors Profile of Homebuyers and Sellers
Ek Real Estate Group President and CEO Edward Krigsman shares the following tips on what to look for when considering city purchases:
Real estate appreciates in locations where demand is focused and supply is limited. These constraints include geography. Manhattan is a classic example. But, he says Seattle is also geographically constrained between two bodies of water, Lake Washington and Puget Sound. He says this constraint keeps the pressure on values high.
Focus on buying in good locations, rather than fixing up your home. Edward says that homeowners rarely get more than 100 percent of the money they put into a property — improvements depreciate in value. According to Edward, when homeowners sell their property, they often congratulate themselves on having made the property more valuable, when actually, it is the appreciation of the underlying land that created real-estate wealth. Over the long term, this is always true.
Buy real estate where smart people live. Cities like Boston and Seattle are brain trusts, says Edward. The coastal location, culture, and strong universities attract creative and skilled people, who stick around to build new creative enterprises.
The majority of homebuyers turn to the suburbs. You're house hunting and you come across an adorable home. It is $249,900, built in 1930, three bedrooms, one and a half baths, hardwood floors, sunroom, stained glass windows, a fireplace, almost an acre of land, and it is on a one-way, quiet street. The drawback? You don't know much about the area.
There are several factors to consider. Foremost, as with city purchases, is location. As one investor says, location first, house second. Many times, people do it the other way around. They go for the most square footage they can afford, and consider the location after. Always look at the past history of the neighborhood. How well have these homes been selling now and in the past? How are the schools? Select areas with good schools, regardless of whether you have children or not, because a home in a good school district helps your ability to resell. Check the neighborhood crime reports, previous tax assessments, and look into future developments for the area. If the home is surrounded by a wooded lot or a good piece of land in a hot area, see if there are future plans for it to be converted into something else, like a shopping mall or new roadways.
Nicole Smith, broker-associate of RE/MAX Masters in Texas, says if you see land surrounding the property, always look into future plans for it, or ask your agent about what future developments are expected in the area, near the home or neighborhood.
Commuting time is bound to be a primary factor in any home you buy. Consider, too, commuting costs. Will you have to buy a second car because you and the person you live with each need transportation? If you will take a train, check the monthly commuting fare before you buy the house you like. It could make a sizable dent in your monthly budget. Will you be on a public transit line — bus or subway?
Have you considered reverse commuting? Perhaps you like the idea of living in the city, but suburban office parks have the jobs you want. Commuting from the city to work in the suburbs is likely to be far less of a hassle for you than for those who are heading in the opposite direction. Working in the suburbs does not have to mean living there as well.
Consider how far you want your kids to travel to school. The country home of your dreams may mean that Jason must get up earlier to catch the school bus. And what about Samantha's dance class and the swim team she is currently involved with? If she is able to pick up those activities in the new locale, how much chauffeuring will you have to do?
If you are at or close to retirement age or have chronic health concerns, you might want to be fairly close to a hospital for convenient access to emergency-room services. If you have small children, you'll want to keep that in mind, too.
Also, if you are older and or you have potential health problems, consider the alternative modes of transportation available if you are not able to drive for a brief time because of an accident or illness. Is there a bus that runs downtown or to the shopping mall? Is there special seniors' transportation, such as a van or minibus? How will you get to the supermarket if you are unable to drive?
If you think that the suburbs are only for the children/minivan/big-shaggy-dog set, you should know that many single people live quite happily in bedroom communities and small towns.
