What Variables Predict The Value Of A House?

[jyl]

Last post then back to work -

One reason I did the study is because the houses here seem to be listed using total sq ft, including finished/unfinished basement sq ft and finished attic sq ft.

My theory was that finished basement sq ft should count for less than main floor sq ft, since it looks like a cave no matter what; that finished attic sq ft should count for less than main floor sq ft, since its odd-shaped and often only usable as a rumpus room for short people; that unfinished basement sq ft should count for much less since its bare concrete and usually lower ceilings; so that main floor sq ft should be more predictive than total (finished and unfinished) sq ft. To my surprise, not so - they were equally insignificant, statistically speaking.

Anyway, I used my regressions to estimate a range of values for this particular house, despite the questionable statistical validity, and find it is listed at $100K over the estimate value range. Plus it is, as I said, a corner lot on a semi-busy street, and also at the periphery of the highly desirable area rather than right smack in the heart of it. But its got that curb appeal.

[Moneyguy1]

Check corner lot property taxes. Some municipalities charge by front foot for certain services.

[jyl]

Hmmm. Now my wife has thrown "crime" into the mix.

Her friend from an OR beach town drove her to the neighborhood today ( they were measuring commute times) and said you must'nt live here, the bad area of Portland is too close, you have to be on the west side of the river to be safe.

So I went to the City's website and pulled down the crime stats for the 4,600 person, 430 acre neighborhood. In the past 12 months: 0 homicides, 0 sexual assaults, 2 assaults, 3 street robberies. 11 vehicle thefts. The most common crime is burglary at the rate of 0.8 per 100 persons per year, probably about 2 per 100 houses per year.

I compared this crime rate to our old Berkeley Hills neighborhood, which hasn't had a homicide or sexual assault in over a decade - it is effectively a zero-crime area (unless you are a vehicle or an unoccupied dwelling).

The crime rate per 100 persons is the same in these two neighborhoods.

Indeed, the crime rate in a west-of-river neighborhood we also like is actually higher (though still very low).

Being of analytical mind, I consider the issue resolved. Yet my wife continues to mumble fearfully - "honey, maybe we should live in the suburbs after all" . . .

Oh well. If we end up in some white-bread minivan subdivision, I'm going to make her a Stepford wife.