Protecting your home's value
Gerri Willis tells you how to keep your house value up as foreclosures proliferate amid the housing market crisis.
NEW YORK (CNNMoney.com) -- Foreclosures in your neighborhood affect your home's value even if you've been paying your mortgage on time.
Sometimes foreclosure sales are handled quickly and quietly by the lender. But other times, a foreclosed home might be boarded up and remain abandoned for years. A vacant home can also be an invitation for vandalism or squatters. And of course the foreclosed house can also become a community eyesore as it falls into disrepair.
Just how much value could your home lose? It's estimated that homeowners living near foreclosed properties will see their property values decrease about $5,000 according to the Center for Responsible Lending. In fact, it's estimated that for every foreclosure in your neighborhood, your home value decreases about 1%.
Foreclosures damage neighborhood stability. Buyers are skittish about buying in your neighborhood. Plus, foreclosures affect how real estate agents decide to value your home.
And, it's not just your home that's affected. The overall economy of your town is hurt by foreclosures. According to a recent report by the US Conference of Mayors, the foreclosure crisis will result in 524,000 fewer jobs and a tax loss of over $6.5 billion in lost tax revenue in ten states. And when cities struggle for money, you'll likely experience cutbacks in education, hospitals and public services.
Of course, there are some things you can do to protect the value of your home. Just pitching in to take care of the little things can have a significant impact. Join a neighborhood watch program so you'll be able to spot foreclosed properties that are beginning to decay. Pull some weeds, plant some flowers or mow the lawn. This may help bolster your own property value in the long run.
The last thing you want is an eyesore next door. If the property is becoming a safety hazard, contact the police. And if you've heard of people in your area that are having trouble paying their mortgage, or even if you think you're afraid of going into foreclosure, seek help now.
Contact the Home for Ownership Preservation Foundation at 888-995-hope. The Department of Housing and Urban Development can also set you up with a counselor. Call 800-569-4287 to get assistance in your community.
If there are a number of foreclosures in your area, you don't want to be spending a lot of money on large home improvement projects. Studies have shown you won't recoup as much as the cost for remodeling as you may expect.