What is a stigma anyway? According to dictionary.com, one definition is: “A mark of disgrace or infamy”. Bing.com states that “The origin of the word comes from the late 16th century. The word denotes a mark made by pricking or branding something, or a mark made by a pointed instrument.” So the point is that a mark is made on something. When something terrible, like a horrific crime, takes place in a home and it makes the news, the home can be stigmatized. This can have a very negative impact on market value and marketability of a home. The following is a good example.
I had received an order to perform an appraisal within the city of Cleveland. My client (the bank) had provided me with access instructions. I remember pulling up to the property and immediately noticing that there was a six-foot chain link fence around the property and a police car parked in front of the home. I explained to the officer that I was supposed to appraise this home. I asked the officer what was going on. He indicated that this was the crime scene of the alleged (at the time) serial killer, Anthony Sowell. I excused myself and notified the lender that I would not be able to complete the appraisal, and explained why. The home was located in a neighborhood where typical vacant lots were selling for around $500. It’s interesting that the owner of public record for the property did not reflect Anthony Sowell’s name. He was later convicted and is in prison.
This home had such a terrible stigma that the city decided to tear it down. As you can see in this video, the community was in full agreement with razing this home. A fitting end to a terrible series of crimes that took place in this home. The neighborhood needed this emotional closure. This was a horrible situation. Let’s talk about something more positive.
To say that something has a positive stigma is really an oxymoron. While stigmas have a negative connotation, some homes benefit by their having a famous history. I guess you could call this a positive stigma, because some homes are “marked” in a good way. Take for instance, the Christmas Story House and Museum in Tremont. This home was used in the making of the popular move, A Christmas Story. Years after the making of the movie, the home suffered from old age and was in need of some TLC. An investor saw the potential income that could be made if they could tap in to this property’s popular history. So they purchased it and restored it to what it looked like at the time the movie was made. Since its restoration, droves of people continue to enjoy touring this home and museum as they re-live fond memories from this movie. This property is a good example of how a property’s history can have a positive impact on market value. Think about the income the owner of this property has capitalized on as a result of its history.
Here is another example. The home of the 1970’s show, The Brady Bunch. The exterior was used for the exterior shots in that show. According to canoe.com, this home was the “second most photographed home behind the White House”. Barbara Cochran, from the famed TV show the Shark Tank, said in this YouTube video, “every famous home sells for more that it’s worth.” She went on to say that the Brady Bunch Home was listed approx. 30% higher than the average home in the neighborhood. I have no idea what the market value of this home is, having not performed an appraisal on it. According to canoe.com, it was listed at $1.88 million. It was recently sold to the HGTV bosses, who paid a whopping $3.5 million dollars, according to the Orange County Register. Rumor has it the buyers will restore it to its former glory. Perhaps they will follow the same idea as the Christmas Story house. Maybe the house will be used for a new sitcom. It will be fun to see what happens.
Can a home’s famous history actually become a negative? Actually, yes! I found it interesting that in the former news report about the Brady Bunch home, another home was mentioned. It was the Rosenheim Mansion, used in the making of the first season of American Horror Story and also the Buffy the Vampire Slayer movie. It sold for 3.2 million dollars. However, the buyers of this home were not prepared for the constant attention it receives from the public who regularly walk by and take pictures of it. So what was considered to be a positive attribute, ended up becoming a negative situation for the owners. And they no doubt paid a premium for this property. Buyers beware!
Sometimes entire neighborhoods can be affected by stigmas, both good and bad. For instance, a neighborhood might be known for having a high crime rate. Or it may be that a city is known for having poor city services. That may have a negative impact on the market values of homes in the neighborhood.
On the other hand, some neighborhoods have many desirable amenities. They may offer very desirable shopping and entertainment. Clearly, that can have a positive impact on values in the neighborhood.
I hope you enjoyed some examples of the good, the bad and the ugly when it comes to how stigmas can impact homes. Thanks for reading my blog! Have a great weekend!
Here are some other articles and videos I enjoyed this week! I hope you will also.
Who Wants To Own A House? – Housing Notes by Jonathan Miller
How Much Does a Previous Purchase Matter To Appraisers? – Sacramento Appraisal Blog
How Many Comps Are Required In An Appraisal? – Birmingham Appraisal Blog
Top 3 Ways to Give Yourself A Raise As An Appraiser – The Real Value Podcast
Making the Switch to Mobile Appraising – The Real Value Podcast
360 Occupancy and Condition of a Model Home – The Appraiser Coach
Here Comes The Summit 2018! – The Appraiser Coach
A.I. Sigogglin?!? – Voice of Appraisal With Phil Crawford
Will It Be a Form or Not a Form? – George Dell’s Analogue Blog