Home Equity Value: Factors Outside Your Control

Determining your home equity value can be difficult and accomplished in many ways. Most of the time, you will rely upon an appraisal to determine the value of your home or will get an estimate from a real estate professional. Regardless of how you calculate it, the desired result is the same. Many factors are used to determine the value of your home, and most are out of your control.

Real Estate Market

When the economy is bad, the real estate market can suffer. When houses are being sold in a timely manner, things are good. However, when new home sales decline and people are not buying and selling, the market suffers. This results in home prices falling. You can do nothing about the market as a whole and your home’s value will be reduced according to market demand.


Additionally, your value will be reduced according to your neighborhood value. If your neighbors do not take care of their property, or fall into foreclosure, it can lower the value of all of the homes in the neighborhood. When a property sells at a very low price, the home is used to calculate your property value. Thus, your property loses value and the resale value is reduced.

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