Location and community are one of the main drivers for folks looking for a new home. The decision on where to live is often a vibe thing. When it feels right it just does.

For many years I’ve been listening to folks describe various communities and homes on our drives and home searches and often the decision points come down to small details. Sometimes they feel at home and sometimes they just don’t ‘feel’ it. Many of these details I connect to the Broken Window Theory.

What is the Broken Window Theory?

Broken Window Theory is actually a term from criminology theory that considers how visible signs of crime, anti-social behaviour or other negative social behaviour contributes to more crime and disorder.

How does Broken Window Theory relate to Real Estate?

The theory literally speaks to broken windows. Homes and buildings with broken windows can count as an indicator of a community in decline. No one cared enough or had enough funds to fix it. Disregard leads to anti-social behaviour and crime.

Driving through two neighbourhoods of consideration, a young family sees no graffiti in one neighbourhood and three bus benches tagged with graffiti in the second. The graffiti consciously or unconsciously often results in the belief that the second community may be less safe or have more issues.

Drive into one community prior to the Christmas holidays and all is dark. Another has an entrance of lit trees with many homes adorned with holiday lights and festive displays. That’s vibe.

The more you know an area or community, the more you can balance these visual signals and other information you already have. The less you know a community, the more cues you may take from the surroundings, both positive and negative, to form an impression and decide if that is where you want to live.

Broken Window Theory related to a Single Home

When viewing a home buyers often have a short period of time to make a purchase decision. When the doorknobs are loose, the paint is chipped, the windows are dirty and the plants are dying we expect more disorder and more issues with the home. The new roof can become irrelevant because the small cues are stronger.

The same home with a few hours of care can result in a different impression. A buyer walks into a home and the door closes softly, the floor is warm on their feet, the light flows through the windows and everything is tidy.

In a home with minor maintenance issues, a buyer often assumes they will most likely have a lot of maintenance and repairs ahead of them if they purchase the home. Otherwise, the seller would have bothered to fix the loose door handle.

An investor will view these items as costs. A home buyer may view them more as an emotional decision around maintenance as well as the costs. The ultimate question: Do I want to invest more of my time and money in this house than the next?

Broken Window Theory related to a Condo Development

You are a buyer looking at numerous condos. You aren’t familiar with the buildings you are looking at and view three units in three buildings. Each unit is a comparable size, year of construction and finish.

In the first you enter a clean, empty lobby and ride the elevator up to the third floor. You walk down the hallway and view the unit.

In the second you enter a clean and furnished lobby with flowers on the entry tables and holiday decorations on a tree. You enter the elevator and see a notice for community coffee the upcoming weekend as you ride up. In the hallway to the unit you take note of modern door numbers and décor on the walls.

In the third building you enter furnished lobby but there is an overflowing litter can by the door. One of the chairs is heavily stained and you smell old fast food. On the elevator up to the unit you notice graffiti scratched into the walls. In the hallway to the unit a couple of the lights are burnt out, but you do notice modern décor numbers.

Which building do you perceive as higher value?

From entering a building, down the hallway, to viewing the parking garage, the small details will tell a story of how well kept the property is. This leads to a perception of value.

Broken Window Theory in Life

Personally I hold a strong belief that when the little things fall apart, it gives permission to let more and more go. I see it in homes all the time. Some homes are calm and others in chaos.

This theory also works the opposite. This video is an example of the power of small changes.

Video source: YouTube: Goalcast

The details, the vibe, indicate the lifestyle and the quality of life a person or family can expect in an area.

When it comes to real estate, many things are financial, but the final decisions are often emotional.