If someone is murdered in your California neighborhood, the potential drop in the value of your property is more than $17,000. For the entire state in 2014, the estimated total drop in market value came to more than half a billion dollars.
California also had the highest number of homicides of any state in 2014 with 1,697, not out of line with its position as the most populous state. But the impact on property values was more than three times greater than in Texas, the second-most populous state, where 1,141 homicides were counted in 2014, the second-highest total among the 50 states.
Personal finance website finder.com used research from the University of Technology Sydney that found that a murder committed within two-tenths of a mile reduces the value of a property by 4.4%. As the website notes, “Not only are people creeped out by the thought that someone has been killed, a murder creates a perception that the area is generally less safe and has a higher crime rate.”
Here are the 10 states, listed by the potential value drop per house, where a nearby murder most affects home prices:
- California – $17,472 per home; total market loss of $566.7 million
- Massachusetts – $13,065 per home; total market loss of $133.9 million
- New Jersey – $11,018 per home; total market loss of $406.9 million
- New York – $9,996 per home; total market loss of $234.8 million
- Maryland – $9,929 per home; total market loss of $168.7 million
- Virginia – $8,978 per home; total market loss of $57.9 million
- Illinois – $6,131 per home; total market loss of $55.6 million
- Pennsylvania – $5,909 per home; total market loss of $99.9 million
- Texas – $5,698 per home; total market loss of $52.7 million
- Ohio – $4,575 per home; total market loss of $55.1 million
According to finder.com the total loss to the U.S. housing market related to murders is $2.3 billion.
Methodology: Data on median home prices was sourced from Zillow. Data on the number of murders in each state was sourced from Statista. US housing density data was sourced from towncharts.com. Data on the estimated effect of a nearby homicide on property values was obtained from the University of Technology Sydney (UTS) Economics Discipline Group of the Business School. UTS research found that home prices within 0.2 miles of a homicide were reduced by 4.4% (median range) for one year. The estimated total loss for each market was calculated as follows: (median home value*0.044)*(housing density/0.2)*(homicides) Data was not available for Florida, Maine and Wyoming.