Home Buying in Denver>Question Details

Josh Perkins, Real Estate Pro in City Park, Denver, CO

When buying a home on a busy street, what is the dollar amount or percent you would typically think should be deducted off the normal sales price?

Asked by Josh Perkins, City Park, Denver, CO Wed Feb 12, 2014

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Josh,

In Denver (in my neighborhood at least), the difference in assessed lot value between a "Superior" (park front, or the like) and "Inferior" (fronting a one way street) is about 25%. The lot value could be half the value of the home, or of course far more or far less (depending on big and fancy house on small lot vs small and dilapidated house on big lot). So 1/8 of the value of the property might be a reasonable starting point on average but the real number will vary dramatically depending on the particular property.

Take this all with a grain of salt. The city assessor says that the houses fronting Wash Park on Downing St. are "Superior". Park views are super nice, but that's a pretty busy street. So obviously this rating process is subjective.

The county assessors' mathematical models ARE based on actual sales prices (by real sellers who found real buyers) for similar properties. Every property is unique (and so valuation is someone subjective), but looking at similar sales (of busy vs non busy streets) should be at least a starting point.

All this information (for Denver at least) is online. http://www.denvergov.org/Property/

Some commercial assessors may have better mathematical models than the city, but everyone (including you) has access to the same property and sales data.

I'm not a realtor. I just live in Denver with a park view and spent a lot of time investigating sales price information so that I could understand my property taxes.

Good luck
1 vote Thank Flag Link Sun Feb 16, 2014
Josh,
There is a cost to sell a home with location issues. I would try to find similar homes that recently sold with the same or similar location issues and compare them to sales on quiet streets and cul-de-sacs. To someone coming from a busier street, it's not a big deal but to others they may like the home online but turn it down when they see the location.
One factor will also be what the competition in the price range looks like, on busy streets or not. If you have no inventory, you may do better than you would expect to do otherwise.
Expect a longer time on the market and a somewhat reduced price due to the location.
2 votes Thank Flag Link Wed Feb 12, 2014
Dan offered some excellent advice. There is no standard amount, some busy streets are busier than others, so there is no direct answer to your question. Best analysis is to find comps on that busy street and compare them to comps that sold off but near that busy street. That analysis/comparison should give your a decent idea. And as Dan also said, not only is there a discount, expect longer time on market as well.
Flag Thu Feb 13, 2014
Hi Josh
There is no real or simple answer to this. That reduction all depends on the buyers and how much they are willing to pay for a home on a busy street. Buyers set the real market prices. Hope this helps.
1 vote Thank Flag Link Wed Feb 12, 2014
You may want to consider additional properties, Josh. I don't like answering a question with the information that you're on a track that may ultimately disappoint you. But, this could be the case.

I agree with the notion that buyers tend to overlook flaws when shopping in a seller's market. They can cost you. In a rising market, that's not a good course to take.

You may want to lower your sights. That is include more homes in your search.

Check with the planning office. Sometimes a noisy street might have a future that will change. Third Avenue in Longmont was one such street. While some complain about the heavy amount of traffic on the west side. The east side improved dramatically when Highway 119 took the majority of traffic off of Third Avenue.
0 votes Thank Flag Link Tue Apr 1, 2014
Hi Josh,

There are some great answers here, and most important to a buyer or seller now might be the fact that in a seller's market there might be no discount for a listing on a busy street. In a buyer's market, where there might be 5 times as many listings for buyers to choose from, a busy street could make a home unsalable.

What is it that you are trying to get out of this house, and what area are you looking in? The specifics, in this case, are very important.

Best,
Eric
0 votes Thank Flag Link Mon Mar 31, 2014
Hey Josh,

There is not a set deduction for a home being on a busy street. It will depend on the area and how busy the street is. It will also depend on how much a buyer thinks that so called discount should be. If the house is in great condition, has good curb appeal, and you can't hear substantial noise when inside the home, the buyer may put less weight on the home being on a busy street.
0 votes Thank Flag Link Sat Mar 22, 2014
Hi Josh: Others have provided good answers here, though I'm sure they are not as definitive as you would like. That's simply because there are too many variables. The one thing I would add is that generally it is best to think hard before buying homes in physical locations that are flawed because of road noise, airport noise, railroad rumbling, etc. In a market like this one, buyers tend to forgive these flaws. But in buyers' markets, these homes can be hard to sell at any price. Too much else to choose from. So there is more risk.

Best,
Ron Rovtar
Berkshire Hathaway HomeServices
Real Estate of the Rockies
0 votes Thank Flag Link Sat Mar 22, 2014
Josh,

In this market the percentage rate is different and most likely less than before. I would say that depending on how busy the street is and how strong the community it could be as low as 5 to 10%. This is a hard call to give an exact amount. This would be a good question for an appraiser. After all, they have the final say in these matters.

Robert McGuire - 303-669-1246
http://www.RobertMcGuireHomes
0 votes Thank Flag Link Sat Mar 15, 2014
Josh - There is no calculation for busy street discount. The market will ultimately dictate the value of the home. It is likely that a home on a busy street would sell for less than the home it backs to if all other considerations are equal. But consider a different scenario, let's say the home that faces a busy street is facing Monaco Blvd in the area of sixth avenue, and is exactly the same as the home behind it that faces a small warehouse. The home facing Monaco would be worth more. The point being - there are lots of other things to consider when valuing a home. The best approach is to have a real estate professional generate a competitive market analysis (CMA) of the subject property and the neighborhood it is in.

Best of luck to you.
0 votes Thank Flag Link Mon Feb 17, 2014
I agree with Dan & Christopher. There is no set amount to "deduct" off the list price. A home will sell for whatever a ready, willing and able buyer is willing to pay for it. Some buyers don't care about a busy street. Some do. Ultimately, the buyer determines the sales price. What does your Realtor say? If you're serious about buying, you should be working with a Buyer's Agent. He/she will be able to pull the most recent sold comps in the neighborhood, to see what similar homes have been selling for. (and what homes haven't sold).
0 votes Thank Flag Link Thu Feb 13, 2014
I agree as well. There is no added value for street lights other than the fact that it may help sell the property faster.
Flag Thu Feb 13, 2014
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