The Worst Neighborhood Features for Home Prices

If you were asked to picture the perfect neighborhood in your head, what sorts of features would it have? Most likely, you're thinking of great schools, beautiful landscapes, and residents that are... Alive? It's always nice to think positively, but keep in mind that every best list has a worst list at the other end. Recently, realtor.com decided to find out which neighborhood features were associated with the biggest declines in home prices. Keep reading to see what they discovered!

To accomplish their task, realtor.com looked at home price and appreciation data for ZIP codes from the 100 largest metro areas in the country. They created the list by finding average sale prices for ZIP codes where "drag-me-down" features (such as power plants) were located and comparing them to other ZIP codes in the same county. While most of the bad features are unsurprising (who wants to live next to a strip club?), the amount of drag they have on home prices might be.

Here is the list in all its glory. The number in parentheses represents how much less homes in that feature's ZIP code sold for than other homes in the county:

1. Bad school (-22.2%)
2. Strip club (-14.7%)
3. High renter concentration (-13.8%)
4. Homeless shelter (-12.7%)
5. Cemetery (-12.3%)
6. Funeral home (-6.5%)
7. Power plant (-5.3%)
8. Shooting range (-3.7%)
9. Hospital (-3.2%)

The idea that better schools mean higher home prices is probably the most common in real estate, and it appears that the opposite is also true. Other factors on the list, such as strip clubs, homeless shelters, cemeteries, funeral homes, and power plants, don't come off as entirely unsurprising either. However, home buyers seem to shun areas with a high concentration of renters, a shooting range, or (most surprisingly) a hospital! The latter two likely introduce considerable amounts of noise to otherwise quite areas. In addition, shooting ranges may introduce the unpleasant thought of stray bullets.

It is important to consider that correlation does not imply causation! Rather than causing the low home prices, the items on this list could potentially be the result of low home prices. For instance, perhaps strip clubs tend to open in areas that are already economically depressed, or homeless shelters naturally seek the cheapest properties. Either way, having one of these features in your neighborhood does not bode well if you're thinking of selling your home!

Source: The Neighborhood Features That Drag Down Your Home Value—Ranked