location never changes
Issue 124 - February 24th, 2023
The ONE thing you can never ever change about a piece of real estate is its location. You can update properties, add-on to them, and personalize them to make them your own, but location is constant and never changes.
When I was a real estate agent, I would always encourage my clients to shop by location as the number one criteria and focus on buying a home they can comfortably afford within their means in the best location.
Location is one of the most important factors when it comes to real estate whether residential or commercial. The location of a property can impact its value, potential for appreciation, rental income, and overall desirability. Here are a few reasons why location matters in real estate:
Accessibility: Properties that are easily accessible tend to be more desirable to potential buyers or tenants. Locations that offer easy access to public transportation, major highways, and popular amenities such as restaurants, shopping centers, and parks can command a premium price.
Neighborhood Quality: The quality of the neighborhood in which a property is located can also impact its value. Properties located in neighborhoods with good schools, low crime rates, and a strong sense of community tend to be more desirable and can command higher prices.
Zoning Regulations: The zoning regulations that govern a property's location can also impact its value. Properties located in areas with zoning restrictions that limit development or restrict certain uses may be less valuable than properties located in areas with more flexible zoning regulations.
Natural Features: Properties located near natural features such as parks, lakes, and scenic views can also command a premium price. These natural features can enhance the property's appeal and make it more desirable to potential buyers or tenants.
Sounds simple but few people actually put this thought into practice. People cave on location to stretch for a bigger home OR some other feature else they desire in a home; many sacrifice location in the buying process.
Personally, I would always choose the “worse” home in an A Plus Location over the “best” home in an F Location.
My simple step by step process for people when thinking about a home purchase:
Write out “must-have” criteria such as bedrooms, bathrooms, garage, school district, or other things that are non-negotiable due to lifestyle needs and family situations etc.
Depending on your “must-have” items, identify neighborhoods in your search zone that include these “must-have” features
Go deeper into the search funnel and zone in on specific locations in the neighborhood
Obsess over location as the number one guiding factor during your home search
When it comes time to choose a home, I would always pick the B grade home in an A plus location over the A plus home in a B grade location
You can always make updates over time to the home’s condition but you can never change the location. EVER.
Location is more important than the house when it comes to the property value. When it comes to which home you will enjoy more, only you can answer that!
You can always make updates and upgrades to a property, but you can't update the location.
Newsworthy Links To Share
Spending money: Pearlstone Partners received a $75M loan from Knighthead Funding to move forward with a 182-unit condo project in the South Lamar neighborhood of Austin, TX. (CRE Daily)
Disappearing act: Since June 2022, high interest rates have rained on everyone’s parade, with the total value of US homes falling from $47.7T to $45.3T by the end of the year—the largest June-to-December drop since 2008. Home prices were up 1.5% over the past year, but median prices have fallen about 11.5% from their May peak. And just last week, purchase applications hit a 28-year low. (CRE Daily)
US Housing Market Posts $2.3 Trillion Drop, Biggest Since 2008:
San Francisco and New York are slumping as the pandemic boom fizzles out, but migration to Florida has boosted Miami. (Bloomberg)
‘Everything Is Frozen’: CMBS Bond Volume Falls By 85%: The issuance of commercial mortgage bonds has taken a sizable hit as buyers and lenders react to the fallout of rising interest rates.
New data compiled by Bloomberg found that only $4.3B worth of CMBS bonds have been issued so far this year, an 85% drop from the $29.4B issued at the same point last year.
As Austin’s SoCo District Grows, Is It Losing Its ‘Weird’? (NY Times)
HN Capital buys Design District block for major redevelopment
Property is adjacent to Virgin Hotel in Dallas,TX (Real Deal)
Hedge Fund Boss Says Shorting Office Loans Is The Next Big Real Estate Bet
Marathon's Bruce Richards believes CMBS bonds secured against office loans are worth betting against.
Why some brokerages are embracing property management
The rental market is massive. Between investor purchases and property management, it can be a lucrative business for brokerages — and a source of buyer leads.
Gary Keller says 2023 will be a ‘very, very hard’ year in real estate
During KW's Family Reunion event on Sunday, Keller talked about the state of the real estate market — which, he says, may get worse before it gets better.
CoStar’s Andy Florance: ‘We are not buying Move’
Florance, founder and CEO, made the announcement during a Q4 earnings conference call Tuesday, which also highlighted the company's revenue gains.