Understanding what your home is worth can help you decide whether or not to sell, how to price your property, and whether your property is holding its value. Consider getting a comparative market analysis or appraisal done by a certified real estate professional. Bear in mind that these estimates are based on local sales and prices at one point in time, and may not reflect other issues affecting your home's value.

What Makes Property Values Tick?

When you bought your home, you bought it for its inherent value. Inherent value is what attracted you to the house in the first place: architecture, quality of construction, landscaping, even just how the house felt to you. But property value, or market value, depends on many other factors:

Direct factors:

Community

Efficient city services, adequate resources, and a thriving business district usually translate into healthy property values. So can a community's history and identity, and its perceived desirability by current buyers.

Neighborhood

A neighborhood that is attractive, safe, and well-located usually results in stable or steadily appreciating property values.

Schools

Good schools and solid property values go hand in hand.

Amenities

Parks, bike paths, libraries, and other amenities can enhance property values, provided that the areas are kept clean and safe.

Transportation

Whether it's public transportation or a nearby freeway, easy access to transportation can be a plus for property values, especially if you need to drive to a job or the grocery store.

Zoning and planning

Property values can be positively or negatively affected by zoning decisions and community development plans.

Neighbors

Courteous neighbors with well-kept homes and tidy yards can increase your property value just as a peevish neighbor with a barking dog can bring it down.

Indirect factors:

Economic changes

A rising economy lifts most home prices and boosts sales; a depressed economy carries home prices and sales down with it.

Demographic changes

Since the 1970s, home prices in California and other major metropolitan areas have grown steadily as waves of new residents compete for a limited supply of housing. In smaller cities and towns, however, prices have remained low as entry-level buyers move to job-rich metropolitan areas.

Disasters

Earthquakes, hurricanes, wildfire, and other severe natural phenomena can decimate property values, at least temporarily. Recurring problems can depress values permanently, and affect a buyer's ability to obtain homeowners' insurance, without which no lender will approve a mortgage.

Perceptions

Perceptions negative or positive, real or unreal can drive property values into the ground or into the stratosphere. It's important to know where your neighborhood stands.