WASHINGTON (TheStreet) -- Homeowners ask only two things of a good neighbor in today's real estate market: Shut up and raise my home value.
Homeowners don't need much help spotting a bad neighbor -- derelict properties, landfills and power plants don't often sneak up on a neighborhood -- but lately they're happy to have just about any neighbor they can get. Existing home sales were down for the second straight month, according to the National Association of Realtors, with April sales off 0.8% from March. That's despite housing prices that are roughly $9,000 less than they were last year when the government was doling out its first-time homebuyer credit, mortgage rates that Fannie Mae says are down from 5.1% last April to 4.84% last month and a 9.2-month supply of homes still on the market.
"Given the great affordability conditions, job creation and pent-up demand, home sales should be stronger," says Lawrence Yun, the association's chief economist. "Although existing-home sales are expected to trend up unevenly through next year, unnecessarily tight credit is continuing to restrain the market, along with a steady level of low appraisals that result in contract cancellations."
The only idiotproof way to avoid low appraisals down the road is to find neighbors that appraisers, real estate agents and homebuyers love. With help from the National Association of Realtors, National Association of Home Builders and the Appraisal Institute, TheStreet came up with the five best neighbors a new homeowner could home for:
A good school system
We know, this answer is like saying a blue sky makes a good neighbor, but the National Association of Realtors' Profile of Home Buyers and Sellers notes that the percentage of buyers seeking quality schools (25%) ranks behind only those seeking a shorter commute (49%), nearby family (39%) and affordable homes (44%).
When even one child enters the equation, however, price (43%) and local relatives (34%) take a back seat to quality of schools (48%) and proximity to said schools (43%). Both real estate agents and homebuyers are well aware of this, and that's where the premiums come in. A joint study by UCLA and Dartmouth College in 2004 found a 10% swing in home values between houses in school districts where mean test scores are within the lowest quarter of the country's average test scores and a home where students average scores are among the top 25%.
It's more expensive, but no one says you have to stay there forever. In fact, in many towns across the country with great school districts, high school graduation day and moving day tend to coincide.