Real Estate Evaluation: What Determines the Value of Properties?

Do you know what determines the value of properties? There are actually many factors that affect home value. Most likely, you can name at least a few of them.

If you’d like to learn them all, though, you’re in the right place. Right here, we’ve written you this simple guide on the biggest factors that determine property prices.

Learn what goes into the pricing of properties below.


The most talked-about determinant of property value is location. But what exactly does that entail? Here, we break down several ways location can affect property value.

Location Of Neighborhood

The location of the home’s neighborhood is the first factor to consider. Homebuyers will want to know what amenities the surrounding area of the home has to offer.

Mostly, they’ll want to know the following.

  • How good are the nearby school districts?
  • What employment opportunities exist in the area?
  • What shopping centers, restaurants, and entertainment are nearby and how close are they?

Also, is it considered a “nice neighborhood?” Neighborhoods that are gated, for example, are usually deemed “nice” by the local community. A home located in a preferred neighborhood typically sells for more.

The Current Local Market

The current housing market also plays a big roll in determining property value. For example, a home is likely to sell close to the same price as similar homes in the same area.

These similar homes are known as comps. If two homes being sold in the same neighborhood are the same size, age, and condition, they’ll probably sell for almost exactly the same price.

Of course, two homes will never be exactly the same in condition and features. So, the more comps there are to compare, the easier it is to determine an appropriate price.

The other thing to consider is whether it’s a buyer’s or seller’s market. If it’s a seller’s market, property values are up and homes sell at higher prices. A buyer’s market means the opposite and homes sell for less.

Location Within the Neighborhood

The home’s location within the neighborhood makes a difference in price as well. For example a house at the edge of the neighborhood, right next to a busy highway, has the disadvantage of constant traffic noise. But a house in the middle of a cul de sac in that same neighborhood is safer, quieter, and, therefore, more valuable.

The Future of the Location

The empty lot next to that house won’t stay empty forever. And plans for its development may already be set.

The empty lot may soon be a school, a hospital, a shopping mall, or a low-income apartment complex. This may also mean 6 months of noisy construction. Any of these possibilities can affect the price of homes in the area.

Size and Liveable Space

The size of the home and the amount of liveable space are big pricing factors. Liveable space means the amount of space you can walk around and set up furniture in. Here’s how these affect property price.

Price Per Square Foot

Any given area or neighborhood typically has an average price per total square footage of the building. So, if the average price per square foot in a neighboorhood is $100, a 1,500 square-foot home would close at about $150,000.


The most valuable types of liveable space tend to be bedrooms and bathrooms. As such, more of these rooms usually make a home more valuable.


The age and condition of the home are the last factors on our list. The newer the home is and the better the condition, the more valuable it is.

Remodels, Upgrades, and Features

Now, obviously, you can’t change the year the home was built. But you can offset the devaluation of age by maintaining or improving the home’s condition.

Remodeling or replacing age-worn parts of the house increases its value. So do upgraded features.

For example, a bathroom that’s gone unchanged since 1969 will turn many buyers away. But what about a gorgeous, new, mosaic tile bathroom, freshly installed by Atabelo’s Tile And Stone LLC?

In the latter case, the house may be old, but the bathroom is state-of-the-art. For this reason, a newly-remodeled home is almost as valuable as a new one.

Determining the Value of Properties

These are the factors professionals use to determine the value of properties. For your reference, bookmark this page to keep this guide accessible.

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