Thursday, March 5, 2015

Arterial Discounts

Why would anyone want to buy a house on a busy arterial?
I have blogged about this before, and done some analysis of sales prices for houses located on busy streets. In fact, there have been several studies to determine how much of a discount in price occurs when the house is located on an arterial or under power lines. Typically, these discounts can range anywhere from 10-25% of comparables that are not located on busy streets.

Many investors refuse to buy properties on busy streets, because they can take longer to sell. Many owners would prefer quieter locations if they have young children, pets, or are sensitive to road noise.

But obviously these homes are purchased by homeowners who find the positives outweigh the negatives.
Take Harvard Avenue East in Roanoke Park, for example. I have been blogging about this neighborhood - and this busy arterial street - all week.

It is a great Seattle neighborhood, full of historic homes, great architecture, parks, and convenient access to downtown Seattle. Residents are eligible for one of the top elementary schools in the Seattle public school district. There is easy access to interstate 5 with the on-ramp just off this avenue. It is a dense urban neighborhood that makes walking, biking and public transportation viable alternative commuting options to the automobile.

Perhaps the most significant reason that people buy these homes is that they are BIG. The Clifford Lambert house that I blogged about earlier has five full bedrooms on three floors. It has almost 3000sf of living space. None of the recent comps in this neighborhood have that much space for the price. Plus, the house is beautiful, full of "Old World Charm," architectural detail, and rich history that many owners love.

Many of the negatives about an arterial location can be mitigated. There is fencing around the front yard of the Lambert house that shields much of the view and protects pets and animals from traffic. Dense foliage has been planted alongside the fence to dampen the sound. The current owner has set up their outdoor space for picnics and entertaining primarily in the quieter alley-side of the house. Modern double-pane windows have been installed that also keep it quiet inside the house.

And as a bonus, they get to live in a historic home in a beautiful neighborhood at a reduced price. If this lifestyle is for you, then don't eliminate the possibility of purchasing a house on a busy street. Your competition will be less, and you will be able to get a lot more for your money.

Happy Investing!

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