It’s now official! The Seattle Times reported late last week “the neighbor from hell can affect property values“. That was the headline, which required additional reading to determine in what direction property values are affected … right? Wrong! Of course, bad neighbors, if known by potential purchasers, may negatively impact real property values.

But for those that did read beyond the headlines, there were a few gems of statistical information.

Of the 8,299 complaints filed in 2010 with the city [of Seattle], approximately 5,000 concerned problems with neighbors, including noise, vegetation and the ever popular “junk in the yard.”

[And] …

Studies by economists measuring the impact on a home’s value after a registered sex offender moves nearby have shown a decrease in value of around 4 percent, but what about depreciation due to the classic yard full of old washing machines, soiled couches and rusted cars?

Skahen estimates that in the current market there could be up to a 10 percent reduction in the price of a house if you live next to a troublesome property, depending on how bad the problem is and whether it is apparent to a prospective buyer. [Emphasis added.]

This is the interesting part and one that I keep hammering. Issues with the neighbors often come down to what is and what is not apparent at the time of purchase. So, when you are going to purchase a new home, make sure that you ask questions about the neighbors and try to visit with them too.

The reason for this is that having bad neighbors can be a little like the movie Ground Hog’s Day. You can find yourself stuck in the same situation, and unless you are willing to sell at a loss, you may just end up repeatedly living out the same problem day after day after day after day … .

Moreover, as the article noted, real estate agents have no duty to disclose if there are issues with the neighbors. The upshot is that you must take the duty upon yourself to look beyond the prospective house of your dreams to your prospective neighbors if you want to identify potential problems before you are committed to your real property purchase. Yet, as many things, this is easier said than done … especially if you really are head over heals in love with the house. What do you think?