22 Nov Post Election Reaction/ What Impact does Railroad Tracks have?

With the election over, many are thankful that Facebook will hopefully go back to pictures of family, events, and less important topics. All kidding aside, the topic of discussion recently has been how President Elect Trump will impact all markets.

Regarding the housing market, more than any other factors, interest rates will influence the real estate market the most primarily because many buyers look at the monthly payment as a barometer of what they can afford. Since election, interest rates have jumped upward. The question is if is an overreaction or not?

Josh Borba, Broker Associate from MLS Reverse Mortgage in Auburn, CA states, “Trump’s campaign was unconventional and caused uncertainty that many thought would hurt stocks and benefit bonds. The opposite occurred the day after the election. Trump’s acceptance speech was level headed and I think that everyone realized that he may not be a complete wild card and that his policies may stimulate the economy as well as inflation.

As far as rates, I think we’ll see a continued uptick in the short term with a correction to bring rates down a bit. I’m pretty certain we won’t see the historic rates we love so much again, unless something happens on the global scale.”

How does a railroad influence market value?

We hear the phrase “location, location, location” in real estate. How does a property near railroad tracks influence market value? Over the years, I’ve seen a variety of market influences that railroad tracks can have. Some locations are more adverse while others are more minimal.

With acreage properties, a wooded buffer and setback away may help minimize the market reaction of railroad tracks. Recently I appraised a property that was located adjacent to railroad tracks, but was set back away on hillside and had mountain views. I was able to review the prior sale of the subject property compared to other sales at the time and based upon review,  there was no significant impact on the subjects sale price. The subjects hillside location and mountain views seemed to offset any railroad influence.

This is one example, but I have seen the flip side where the dwelling was in close proximity to the tracks and in direct sight, which had a far greater impact on value. It’s also important to consider how often the train comes by and if located in a quiet zone.

One other aspect to consider is market conditions. In a seller’s market, properties with external obsolescence (railroad, busy road, freeway, etc) may have less impact on price compared to a buyer’s market. When inventory is high and buyers have leverage with selection of homes on the market, the potential market reaction may be greater.

Concluding, every scenario is different and it’s important to carefully consider each property in of itself (like above) vs. making a blanket statement that railroad tracks will have “x” amount of impact on the property’s market value.

Looking ahead –

Like you, I’m curiously watching how the markets will continue to respond. Time will tell as we enter 2017.  With the upcoming holiday season approaching, I wish you all a happy thanksgiving!

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use.  This information is NOT intended to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or other potential real estate or non real estate purpose. This appraiser is NOT a qualified home inspector and any tips are for informative purposes only. If you’d like to obtain and order an appraisal for your specific needs, please contact Bryan at 530-878-1688 for more information.