Having desirable amenities within the neighborhood is a second major factor in whether a neighborhood will appreciate or decline in property value, Schiller says.
In the world of real estate, "amenity" describes any asset within a community that people find desirable.
Schiller cites some examples of key amenities that can add value to a neighborhood:
- Low crime rates.
- Good public schools.
- Pleasing views.
- Distinctive architecture.
- A variety of retail stores.
- An educated population.
Still, popular amenities by themselves aren't a guarantee property value will remain high, especially if the neighborhood is located in an area with a small or sluggish local economy, Schiller says.
"Any bump in the national or regional economy, and people can't find another job if they're at a high wage level," Schiller says. "When a high proportion of the value of real estate is based on amenities and not access to job opportunities, it is more vulnerable to collapse."
"Those are the places most likely to dive because people will say, 'I'm letting it go. I'm going to go back to where I can get my access to opportunity,'" he says.