IT STILL IS ...
LOCATION, LOCATION, LOCATION
You’ve likely heard that the three most important things to consider when buying real estate are:
- Location
- Location
- Location
It’s a catchy phrase that’s been thrown around for many decades, which might make you feel like it should matter more than anything else when you’re in the market to buy a house.
There’s no denying that location does matter. The location of a house you buy will affect the future appreciation, resale value, and your ability to resell it when the time comes, so it’s certainly an aspect you should give some thought to.
However, a recent study is making headlines claiming that the majority of buyers now think price is more important than location.
Are the tides changing? Is this the new normal? Does this mean you should disregard location and buy the lowest price house you can?
Location Still Matters, and Always Will
As is often the case, headlines can be a bit misleading. The recent study found that 56% of people surveyed felt that price was more important than location. If you dig a little deeper into the results, 60% of women feel this way, versus 48% of men. That’s a lot closer to half of buyers than it is the majority, as the headlines suggest, so the old adage isn’t being entirely thrown to the curb.
Location certainly still matters and always will, regardless of the overall real estate market, or area you’re particularly looking in.
For example, if there were two identical houses for sale, one on a quiet street in a neighborhood, and one on a main road, the one on the main road isn’t going to sell for as much as the one in the neighborhood.
On the other hand, let’s say that the same house on the main road is on the market at the same time as another identical house which is also on a main road, but happens to back up to train tracks and high voltage power lines. Now the house on the main road in the original example is likely seen as the “better” location and would sell for a higher price than the one.
While more buyers surveyed may be price-sensitive, that doesn’t mean location doesn’t matter.
Location matters to different people in different ways, depending on what makes them tick, and how much their budget happens to be.
Regardless of their budget, location matters more to some people. For instance:
- Some people would rather pay more for a smaller house that needs some updating in order to live on a quiet street, because they wouldn’t enjoy or feel at home if they lived near train tracks or on a main road.
- Others will spend every penny they can afford in order to have the most prestigious location to impress their friends and family.
- Some choose to buy a house in a better location because they’re more concerned about better appreciation and being able to sell their house more quickly and easily when the time comes.
- Or perhaps they’d rather pay a premium in order to cut down on their commute time to work.
On the other hand, other buyers might be more focused on getting the lowest priced home they can, either to save money, or because their budget is limited. But that doesn’t mean they can’t get a nice house or location… or even a combination of the two! Here are a few ways focusing on price might make more sense for a buyer:
- If you aren’t handy or don’t have the money to fix a place up, you might be better off buying a nicer house in a less desirable location.
- If living on a main road, or near something other people feel detracts from a home’s value doesn’t bother you, then you’re in luck and can benefit from lower priced homes. No need to buy a house in what would be considered a better location by other people if it doesn’t matter to you!
- If you need a bigger house or the most space you can get on your budget, you can often get a bigger house for the dollar in a location that isn’t as desirable as others.
- Or if you can tolerate a longer commute, perhaps living further away from work is a great way to get a combination of a nicer house in a better location of a town, by moving to a more distant town altogether.
Price and location are always part of the decision for a buyer, but which is more important depends upon your personal wants, needs, and situation.
Don’t feel you need to pay more than you want to (or can afford) just to get a “better” location. But also remember that location is an important factor in the valuation of homes — and how easily you can sell it in the future — so keep that in mind when making decisions based solely on price. That being said, every house has a buyer… at the right price! So no matter what house you buy, there will be a buyer for it in the future, as long as you price it accordingly.
The Takeaway:
A recent study is making headlines claiming that the majority of buyers now think price is more important than location. But if you dig into the data, only 56% claimed that price mattered more.
Location still matters, and always will. It’s not an all-or-nothing deal; both factors play a role.
