How to Choose The Right Location When Buying a House

Buying a house is an enormous financial decision and, these days, it’s not always cut and dry. You might want to buy in your hometown, but it’s become prohibitively expensive. You may want to buy in a cheaper neighborhood, but how do you know it will improve over time?

There are many considerations when buying a house and, for some buyers, location is a very important but somewhat flexible one. Not everybody knows exactly where they want to live or has the budget to buy a home there.

Home prices vary dramatically between regions of the country and even between different neighborhoods in the same metro area. Some people even end up buying a home in a different state.

How can you find a home location that’s right for you and your budget? Is it worth spending less to live in a less in-demand location? We’ll answer those questions and more in this primer about how to choose the right location when buying a house.

Why is house location important?

There are myriad personal reasons you may want to buy a home in a particular location. Maybe you grew up there, you have family there, or it’s where you work now. Maybe you prefer the city over the suburbs. Obviously those are paramount factors in deciding where to live.

Setting aside the big picture of choosing a city or state in which to live, the location of your home within a municipality is even more important.

After all, you can’t pick up a new home and move it where you want. A suburban home is zoned into a particular area and a city townhome isn’t going anywhere fast. As such, neighborhoods and city blocks can be “good” or “bad” investments just like a property itself. And, as the free market demands, “better” locations tend to have higher property values and are harder to get.

That last point is the biggest reason that home location matters. Your home will likely be the biggest investment of your life. You want to make sure that it appreciates in value and the most significant factor in that ROI is one that’s beyond your control: That the location remains or increases in demand. If the number of homes for sale in your neighborhood suddenly outstrips the demand to purchase them, that could be catastrophic for your investment.

So don’t buy a home just because it’s pretty. Make sure it’s in a location with potential, too.

What makes a good location to buy a house?

Again, location is a somewhat subjective idea when it comes to real estate. Holland, Michigan may be lovely, but if you don’t know anybody there and aren’t keen on living in the Midwest, that doesn’t do you much good.

There are objective factors to keep in mind when considering a location, however. Depending on your personal desires, some may be more important than others but generally speaking, each of the following factors factor positively into property value.

Nearby amenities

Close proximity to amenities like grocery stores, restaurants, dry cleaners, and other places people frequent will always increase home values. Just think about how many people you know who dream of living on the perfect, secluded cul-de-sac that’s just a ten-minute walk from the local downtown. If everyone has the same dream, you can bet it’s expensive.

In addition to commercial areas, other valuable amenities include public transportation stations, parks, nature, or schools.

Neighborhood demand

In big cities, land is at a premium because there isn’t as much room to expand. Naturally, most cities expand outward. In many places, that results in more affordable developments popping up further away from the city center. But it can also create multiple in-demand areas that, even if they aren’t “downtown” are still supremely desirable.

Despite most cities experiencing inconsistent population growth over the past couple of decades, it’s not the most affordable housing that remains in high demand — it’s the nicer areas. As such, you could spend far more per square foot in one neighborhood than you would in another.

This concept also speaks to a larger trend in the U.S. Census Bureau data shows that when sprawling cities experience a population exodus, the outlying areas suffer the most severe declines in property value. So while you may get a good deal on a home on the outskirts of a city, you should ask yourself if that city is on the rise or on the decline.


Expanding on the previous point, buying a home calls for some clairvoyance (or good planning) to ensure you make a strong investment in your future. That’s because future amenities matter just as much as present ones. If you can buy your home just before new schools, public transit, hospitals, or other civic infrastructure comes to town, that can be a big boost for your property value. Commercial development is good for property values, too.

When you’re looking at homes, ask your agent if there are any new public, commercial, or residential developments planned. Not only will this give you an idea of how your property value may increase in the future, but it will help you understand what the neighborhood will look like after you’ve lived there for a while.

If you’re looking to buy a house, Orchard can help. We have a team of local agents with years of experience who will find your dream home. (When you’re ready, Orchard can even turn you into a cashbuyer).

Lot location

When you buy a home, you’re also buying the land it stands on. You’re not going to knock the house down and relocate it elsewhere on the land so you have to consider the entire property space.

A house located right on a busy road or very close to a highway won’t be as expensive as one in a quiet neighborhood but if the area continues to grow, the roads will likely become busier, noisier, and the property will be harder to sell later. Likewise, a house right next to a grocery store, gas station, or commercial development might be handy when you want a midnight snack but future growth portends more noise and more strangers milling around your house. Many people view that as a detriment.

Thriving areas

At the macro level, when you look at the most expensive places to live in America, they all kind of make sense. They have loads of amenities everywhere you look, they’re popular vacation destinations, they have outstanding job markets that pay premium salaries, and they may even have the perfect climate.

While places like New York, Los Angeles, and Miami are obviously desirable, they’re also extremely expensive. When you’re looking for a new home and you don’t have a specific place in mind, consider buying in a city with more potential for future growth. Places like Jackson, Mississippi; Omaha, Nebraska; and Charleston, South Carolina are among the best cities for new families.

How to choose where to buy

So, where should you buy your home? There’s a lot to consider, of course, and no two people will weigh all variables the same way. But here’s what to think about where to buy.


First and foremost, figure out your home budget. What can you realistically afford? Once you have a budget in place, you can search different markets to see what the houses look like in your price range in a given area. You may find that in some towns or cities, you can only afford to live in rougher neighborhoods. In other cases, you might find you could live in the nicest part of a not-so-nice town. But before you start looking, you need to know what you’ll have for a down payment and what you can afford as a monthly mortgage payment.

Income sources

These days, job location isn’t a crucial factor for as many people. Remote workers can do their jobs anywhere, giving them more flexibility to live literally anywhere they want.

If you don’t work remotely, however, you need to consider a home’s location. Would the commute to your office be too tiresome? If you’re moving to a new city, will you be able to find work in your field of expertise? You’re probably not going to find a biotech company in Plantersville, Alabama, for instance.

Plus, if you’re looking for new employment somewhere, it’s worth finding out what wages are like in the area. Again, the same job in Plantersville will pay less than it does in Boston, Massachusetts.


Different families have different priorities. You may want great public schools for your children. You might want good nightlife in a suburban setting. You’ll always want a grocery store that’s not too far away, as well as shopping for clothing, appliances, tools, and other essentials.

Beyond essentials, though, there are probably some things you’d like to have from a home. Do you want to be near water? Do you want to be able to do activities like skiing, biking, or kayaking at different times of the year? Do you want to live around people with the same political beliefs?

Determine what’s most important to you and your family and use those values to inform your housing search.

Is the house location more important than the home?

Homebuyers often wonder if it’s better to buy a fixer-upper in a good neighborhood or a turnkey home in a bad one. There’s no obvious answer to that, despite what your parents may believe. A few decades ago, it was clearly a better move to buy the worst house in the nicest neighborhood. Today, that’s not so clear.

Demand for housing has outstripped supply in the United States. Housing prices have increased rapidly and it’s not easy to find a “bargain” anywhere anymore. Today, the question is better framed as “should you overpay a little for a nice home in a crummy neighborhood or pay a top-of-the-market price for a crummy home in a nice neighborhood?”

Ultimately, it all comes back to your thought process and priorities when buying a home. There’s so much development happening these days, it’s hard to say what any neighborhood will look like in a few years, let alone in 20 or 30. Buying a home anywhere probably won’t offer the kinds of returns seen by Baby Boomers any time soon — even with rampant development — so make sure you love the home itself and not just the location.

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