Over the recent years, there has been consistent fluctuation of residential values in Atlanta GA. Many theories and the assumption have been put forward in trying to discover the cause and remedy of these fluctuations. Often the conclusion has been narrowed that most of the fluctuations are because of residential owner’s ability to influence the values of the properties due to prevailing economic factors (Florida, 2009). This project aims to take a different view by focusing on the effect of the commercial properties that exist on the value of the residential properties in the proximity. The study contributes to the relevant real estate and urban economics literature by determining whether there are any relationship between the residential values and the existence of commercial property within the proximity. The research question for the project is ‘Are residential property values affected by commercial properties in Atlanta GA?’.The process of working on the project up to the completion stage required a lot of dedication and assimilation of essential knowledge and skills acquired. This is in line with Saint Leo’s core value of excellence.
The project focus is in Atlanta GA. Like other areas in the Midwest of the USA, Atlanta GA has a large number of commercial properties. These properties include federal offices and shops, pubs, sports centers warehouses and factories. The data about the property values in Atlanta GA were collected from the Atlanta County Auditor’s Office. The county resources were then used to locate the information geographically and to calculate the necessary distance measured. Based on the preliminary examination of the data, and supported by the relevant literature, which reports the strongest effect of fluctuations to occur within 150 to 1500 feet, all the residential properties within 1000 feet of the commercial properties were selected for the research. Over 130 variables are listed for each residential property including not only the usual data such as site and number of rooms in a residential structure but also scenic views, traffic noise and other detailed types of data (Florida, 2009).
All the two distances measured and used in the study were calculated in ArcGIS. The distance included the distance of each of the sample property, defined by its centroid to the closest commercial property and the Central Business District (Rodell, 2011). The table furthers shows, the maximum and minimum value of the structures within the residential properties and their mean value. These values are significant in determining the eventual value of the residential property in the case of sale or purchase as a result of the existence of a commercial property. The average house in the sample has as many as six rooms further the average home have 2.6 bedrooms and 1.3 full baths. The data from the USA Census Bureau indicated that the median household income in Atlanta GA was 30858 dollars.
The above chart shows the comparison of the movement of commercial vs. residential prices index between the year 2000 and the year 2009 in Atlanta. From the chart, the residential value and the commercial price index are running concurrently implying there exist a relationship between the two variables. The value of the various variables used in the study depends on the commercial property within the proximity. Commercial properties with high values like pubs warehouse and factories will results to high value of the residential property (Rodell, 2011). Low valued commercial properties like traffic station with a lot of noises will negatively affect the price index of another residential property.
An independent t-test statistic was conducted to determine whether there is any difference between the commercial property and the value of the residential properties within the proximity.
The significant level was 0.257 with a degree of 8.Since the level of significance is greater than 0.05,it implies that the variability of the two variables is not significantly different. This result shows that the value of residential property has a relationship with the existence of commercial property
The result above indicates that the value of a property depends on the proximity of a commercial property to that residential property. The negative or positive impact of this property majorly depends on what the type of commercial property exists within the proximity (Rodell ,2011). Traffic noise from traffic stations negatively affects the price of the residential closer to it while other commercial properties like entertainment centers, good transportation system, and local sports centers will lead to the high valuation of the residential property.
Purchase/sale of residential property (5th ed.). (2009). Tallahassee, Fla.: Florida Bar ;.
Rodell, A. (2011). Commercial property ([New ed.). Guildford: CLP.