How Does New Construction Impact my Home Value?

by Isaac Benmergui, Esq on October 16, 2017

home value

What happens when older, larger lots begin subdividing in an established neighborhood and new construction comes in? Or, when an older neighborhood begins gentrifying and building new construction where there were older homes? Many parts of Miami are experiencing these occurrences as demand for homes is at an all-time high while supply is low. If you’re an existing home in either scenario, how is your home value affected?

Home value is determined by a number of factors, so let’s walk through each of them.

  1. If you’re in a good location, people are going to want to be there, period. Whether it’s a walkable area, has a great view, or has proximity to key amenities, people are going to want to be there no matter what kind of other properties come in. Location includes services like schools and parks, even if you don’t have kids or don’t use them.
  2. Price point. What is the price range of the construction going in? Does it fit in with the existing area, is it much higher or lower than the surrounding area? New construction that fits in seamlessly is going to have less of an impact on your value than something that stands out, such as a modern build in a neighborhood full of bungalows, or a home that fills out the lot almost completely next to more modestly sized homes.
  3. Type of home. New construction can mean any new structure on a lot. Is it multifamily housing? A mobile structure? Tiny home? Traditional single-family construction? The more the new build blends in with the surroundings, the more stable your home value will be.
  4. Current demand. Home values depend much more on not just what’s next door, but the general market climate. If it’s a sellers market, you’ll have a much easier time selling any home, anywhere, than if it’s not. Likewise, if it’s just one new home going in versus 10, you’ll have an easier time selling. Market activity, interest rates, and housing supply all go toward determining value.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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