The housing market rises and falls, and if you've tried to unload a home at a decent price during the real estate chaos that occurs during one of the lows, you're probably all too aware of how difficult that can be when the market is flooded. The more comparable homes on the market, the harder it is on your house's particular value, especially when buyers are scarce.
It's even worse if your home is located in an area where lots of homeowners have failed to pay off or unload property. Living in a neighborhood that has seen many foreclosures or short sells is bad for your home's bottom line. Each foreclosed house within 250 feet (about 75 meters) will cost an average of 1 percent of the property value [source: O'Connell].
Next up, we'll look at more ways the neighborhood can affect your home's value.