8 Ways Neighborhood Data Impacts Property Value and Real Estate Decisions

Real estate values ​​always depend on location. Whether it’s a home in an attractive neighborhood or a commercial property near a large population, as the old saying goes, “location, location, location.” However, neighborhood data provided by data platforms like ATTOM has taken the application of geospatial data to a whole new level. Unfortunately, not every real estate professional or commercial real estate investor understands what location data is or how to use it effectively.

Here are eight ways point-of-interest data can and should influence real estate prices and investment decisions.

1. The Starbucks Effect

You’re probably familiar with the Starbucks effect. A 2018 Harvard study found that homes located within walking distance of a Starbucks were valued half a percent higher than homes not located near a Starbucks.

Of course, it’s not amenable to a good cold brew that has such an effect. Any desirable point of interest makes a property more attractive to a particular buyer. Proximity to public transportation is particularly influential when it comes to property value, as are grocery stores.

In 2022, ATTOM released a special report on grocery store locations and found that homes near a Trader Joe’s saw an average 5-year increase in value of 49 percent and homes near a Whole Foods saw an average increase in value of 45 percent; ALDI had a slight advantage at 58 percent.

Geospatial data can be displayed on a point map that shows relevant points of interest. These are important data points for investors and flippers and demonstrate how location data can and should influence investors’ decisions.

2. Find out about the school district

Another important factor in the home buying decision is school district information. What school district a home is in and which schools are assigned to a particular area are obvious criteria that determine a home’s value. A study by realtor.com shows that many buyers are willing to pay up to 10 percent more than their budget for a home if the school district has better test scores and an attractive teacher-to-student ratio.

3. Community data for developers and educational institutions

Neighborhood data serves many groups in addition to investors. Educational institutions, developers, and urban planners all use neighborhood data. Economic data, or data showing changes in local business density or consumer trends, can help plan new development or marketing initiatives. For example, ATTOM provides neighborhood data on transportation access, walkability, and amenities. These data sets show the impact of government programs and the impact of community development initiatives on housing prices.

In the case of educational institutions, the data can help create targeted marketing lists to increase enrollment and identify locations for new college campuses. In the case of real estate developers, the information can provide stakeholders with insight into the profitability and potential income of units.

4. Proximity to attractions

It’s not just retirees in Florida who pay more for a home or apartment that borders a beautifully maintained golf course. Families and singles may pay 8 to 20 percent more for a property within walking or biking distance of a park or recreation area.

Sports stadiums are huge attractions. According to researchers at the University of Illinois at Urbana-Champaign and the University of Alberta, a new professional sports stadium can increase property values ​​within a 4 km radius by an average of $2,214.

5. Transport and commuter data

Commuting distances, commuting times and public transportation availability are important data points that homebuyers and real estate investors need to assess the demand and value of properties they may want to purchase.

According to the California Department of Housing and Community Development, there is high demand for homes near public transportation, with home prices here averaging up to 20 percent higher than comparable properties farther away from public transportation.

6. The Beyonce Effect

Location data can reveal interesting facts, such as which celebrities live or have lived where. Although this is not always the case, these homes attract attention and often sell for higher prices.

Part of the allure is the lifestyle of A-list celebs and the idea that the homes will feature high-end design elements. In the case of Beyoncé and Jay-Z, it’s a house with bulletproof glass, and in Kim Kardashian’s case, it’s a vineyard.

Luxury Portfolio International quoted Susan Smith, global real estate consultant for Hilton & Hyland in Beverly Hills, California: “The value of (celebrity) homes is definitely increasing, not only because of their intrinsic value, but also because the pool of buyers is much wider… Often more buyers are interested in looking at these types of homes,” she said.

7. The points of Non-interest Effect

As much as points of interest data shows the highlights of a property’s location, investors should also be aware of the less desirable aspects of a location. Having a Starbucks coffee shop within a mile or a luxury gym three blocks away is all well and good. However, whether there’s a garbage dump in the opposite direction, a high-crime area, or an area with a certain type of business that might pose a problem for the investor is also data to consider. POI data provides a bird’s eye view of a neighborhood, both the good and the bad, to help buyers make their decisions.

8. Building footprints for insurance companies

For insurers, geometric data such as building floor plans provide precise details about building attributes, capturing the exact shape and scale of a building using advanced proprietary AI building recognition algorithms.

The precise location of buildings can be critical in identifying hazard risks. Without data on building footprints, underpricing policies would expose insurers to higher unforeseen flood claims.

The arrival of Trader Joe’s or the departure of Timberlake? – Which is the better option?

Neighborhood data is a must for anyone considering real estate values. It provides ground-level context and a bird’s eye view of a location at the 10,000-foot level. Let’s say an investor has two properties in mind, both similarly priced and with similar features and characteristics. How can they decide which one to buy?

Maybe the building half a mile from a planned Trader Joe’s, where foot traffic is increasing, or the luxury condo high-rise next door where Justin lived in 2023 is a better choice? Whatever the ultimate deciding factor, neighborhood data provides context for smart investment decisions.

ATTOM’s neighborhood data is critical to your real estate business. Neighborhood data helps you accurately assess a property’s potential, leverage community building to find the best places to invest, marketers can develop targeted products for customers, and real estate agents and brokers can streamline the process of finding the right home for the right family.

Visit www.ATTOMData.com today and speak to an expert.

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