Somebody asked me the following question the other day and I figured I’d post a response here.
Q: Could a location near a water tower impact market value for a home?
A: Maybe. Sometimes water towers are quite large and the typical buyer may not want to live right next to the tower. Let’s face it, some buyers simply wouldn’t want to look at an enormous tower every day, so they’d steer clear of such a location. If this was the case and most buyers felt that way, then there could be an impact on market value. On the other hand, there may be other buyers who would be unaffected by a water tower, or evidence to suggest that such a location makes no difference at all.
There is not a hard-and-fast water tower rule for appraisers to follow. There is no specific “water tower adjustment” that appraisers make in reports. An adjustment in an appraisal report would really depend on what data in the specific market was saying. Any adjustment should be based on the reaction in the marketplace. Is there any evidence in the market that buyers are willing to pay less or more based on the location of a water tower? How do the most recent sales surrounding the water tower compare with sales further away? Does data show that there is really little to no impact on value?
Market conditions certainly play into the equation here too. If there is a vast oversupply of properties listed in the market, chances are someone might look to other listings first that maybe had a more typical view. However, in a market with very limited available properties, buyers may feel less concerned about such an issue and not consider a view of a water tower as a negative. After all, in a hot market with few properties to choose from, buyers tend to more easily overlook locational challenges (busy street, backs to commercial, located next to major fixer…) and even condition issues.
I don’t mean to be frustrating, but there is not really a straightforward end-all answer to the question that was posed to me. The answer really depends on your specific real estate market and what data in your local market says. My knee-jerk reaction is that most buyers would probably prefer to not live next to a water tower, but then again, it really comes down to what the data says because sometimes a real estate market is surprising and things that we think would make a difference in value don’t carry as much weight as we think (or none).
If you have any firsthand experience with a property near or next to a water tower, I’d be curious to hear what you have to say. Have you ever intentionally purchased a property near a water tower or away from one? Did you purchase a property near a water tower only to regret it later on? Is it just not a big deal for you at all? Feel free to comment.
www.SacramentoAppraisalBlog.com Question: Could a location near a water tower impact market value for a home?
Rosemary Maroney says
Are there health issues being next to water tower?
Ryan Lundquist says
Sorry for the late reply here. I’ve had some health issues and I’ve been away from my desk. I’m just finally starting to get back (not even fully back yet). You know, I’d defer to someone else to answer that question. I know this sounds really anal, but as an appraiser it’s not in my scope of expertise to make health claims regarding being next to a tower. Sorry I cannot get more specific.
David Walker says
I’ve lived beside a water tower/( Tank ) ..not on giant legs..just a 50′ ft tall tank.
It’s almost blocked by trees ,and up the hill , behind my home. It’s actually the best neighbor I’ve ever had.
The area is secure .. no o e can build beside me.. and the land is well kept and fenced.
I’m in the process of getting an appraisal for my land and home , And this water department structure seems to leave my appraisal hanging for now.. as they aren’t sure how to assess values concerned with being by this large structure.
According to FHA loan advisor , if it were a structure that had a chance of falling , it would hinder the ability to get a loan .. however , it’s just a large white tank in a fenced area. Approx 100′ x 50’+ in size ,if I had to guess.
It’s probably 300 ft or further from my property .
Ryan Lundquist says
Thanks for sharing David. I appreciate hearing your take and I’m so grateful the tank has been an ideal neighbor. 🙂