We have the oldest Mall in the country here in Seattle called Northgate. A shopping mall changed the dynamic of the suburban areas. It brought in big retail anchor stores with plenty of free parking. Immediately your property values went up once the mall was built.
We also saw housing tack development around the mall. Of course in our case here in Seattle the freeway helped change the area also. The mall next to the freeway created a lot of new dynamics for what used to be an outer suburban area. A second mall North of Lynnwood at Alderwood was the next step out from the urban center. Headed North that took us into Everett which is a naval base town and Home Port of Bangor nuclear submarines.
The freeway corridor created little pockets of development. These houses, or housing units sprung up to be close to the freeway access to job centers, or the malls became job centers that attracted other jobs.
The entire process is called development. Some call it progress, and economic stimulus. Jobs attract people. The more people the more development that is needed.
Northgate was built in the 1950s, and Alderwood some 20 years later. Growth was slower then. Today a Wal Mart can announce a building permit application and plans for a thousand housing units will be close behind.
The business of housing development is it’s own business. As long as the plan makes sense, and has a chance of selling, it gets a loan. The developer collects fees, the builder collects fees, the contractors collect from the construction loan, and the construction loan gets converted, hopefully into a home loan mortgage. The mortgage can then be sold.
The reason I put this article here is to show that housing track development can seriously impact Real Estate algorithms. New construction sells for a premium price. In theory it should depreciate like a new car driven off the lot. Lately new construction has benefited from Real Estate appreciation, many times based on the further development of more expensive housing units.
New construction development has gotten to be another problem in pricing properties. It skewed the algorithms.