How much of a discount should a house take if it is next to a major road?

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LAtoOC

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We are thinking about submitting an offer on a home that is next to a main road. It is not Jamboree-level, but it is a four lane road with modest noise during rush hour and very little noise afterward. The house is above the road (about 10 feet elevated) so that does help as well. We like the house and it is a good layout for us, plus we already live next to a very loud street so this would be an improvement.

How much would you discount this house based on other non-street facing comps? 10%, 20%, more?
 
This is a hard question to answer.

If you don't mind the noise... any significant discount (10% or more) would work since it's not really a problem for you.

For us... there is actually no discount that would suffice anymore (well... except for free).

I think you just have to understand that no matter what the price, could you live in it for an extended period of time?
 
LAtoOC said:
We are thinking about submitting an offer on a home that is next to a main road. It is not Jamboree-level, but it is a four lane road with modest noise during rush hour and very little noise afterward. The house is above the road (about 10 feet elevated) so that does help as well. We like the house and it is a good layout for us, plus we already live next to a very loud street so this would be an improvement.

How much would you discount this house based on other non-street facing comps? 10%, 20%, more?
Click to expand...

Just had a recent refinance of my own home.  The appraisal included a comp that was adjacent to a similar busy road, but within the same tract. The appraiser made an 8.1% adjustment for this specific line-item for the other home.
Cross-checking with some other recent appraisals, I see others with specific adjustments from 6-10%, depending upon the level of traffic on the road.  I would suspect that backing to a freeway (5, 405, or 55 for example) would be higher than that.

-IR2
 
I agree, I wouldnt want to live next to a road (even though I do now and its not a big deal - I was young when I bought the place and didnt know any better).    People think that houses are like buying shoes, or clothes or cars and searching for discounts.  But you have to ask, what for?  Because you want to sell it in 4 years and make money?  Well guess again...  real estate prices aren't inflating at 15% a year, so your required appreciation to offset commissions and other expenses is a larger hurdle.  I believe in today's market, you should buy a house if you are planning on staying there (or have the ability to stay there) for 10-15 years, if not more.  If you are buying a place to live, buy a place to live.  If you want an investment that you live in, be weary.    If you are looking for a place to live, and its reasonably long-term, than buy what you want and where you want to live.  People are obsessed with squeezing every last dollar out of the transaction.  For what?    Is $40K a lot?  YES!!!!  But let's also think about it this way.  $40K, assuming you are a 20% down buyer costs you $8K up front (yeah, not a small amount of money).  You finance $32K @ 4.5% and it's costing you an extra $162 per month (not including tax subsidy) + about 35 per month in property taxes (not including tax subsidy) for a total of 197 per month more.  Is it worth paying an extra $200 to live in the place you want not next to a road?  I would say yes.    $200 nowadays is taking the family to a ball game with hot dogs and drinks...  don't even think about taking the fam to Disneyland!!!    I guess it could make a difference if for instance you are a 20% down buyer trying to get to the $625.5 limit.  Then yes, $820 is more different vs. $780 because there is a rate increase in there as well.  Other than that, buy what provides value to you as a couple (or family whatever your situation is) and be happy!   
 
In our situation, it definitely would be a home that we live in for awhile. It is large enough to accommodate our family and the school/neighborhood is great. Thanks for the comments, I appreciate the information and feedback.
 
I have lived in a home which backed to a four lane road (two in each direction) and currently live in one that is an 'inner tract' home that does not back to a road.  I must say I like not backing to a street quite a bit.  Those Harley's, bumpin' rides and rice rockets flying by at odd times don't affect me anymore like it did when I backed to the street.
The one positive of backing to a street is no neighbor behind you so you get an unobstructed view of the sky and it feels more open. 
In my experience of having both situations, I prefer not backing to a street. 

For resale, it was harder selling my home which backed to a street, I would say you lose 30-50% of potential buyer eyes looking at your house the instant they look at a satellite map and see that street back there.
 
Hasn't the price of the home already been discounted to show the impact of the road, or is the price kool-aid strong with this one?

10% is more than reasonable, assuming that the listing agent hasn't already deducted price for location.

My .02c

Soylent Green is People.
 
If you have kids, it can be bad for your health. I had a friend who backed to a busy street and his kids had pretty bad asthma because they played in the back yard most of their lives.
 
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