By Sara Clemence , Dec. 1, 2005, (Forbes.com) - Some people will tell you to buy the most expensive house you can afford. But a real estate adage offers a corollary: It's unwise to buy the most expensive home in the neighborhood.
Sure, the best spread on the block comes with bragging rights. But the cheaper homes in the surrounding area can limit your appreciation potential and could even pull down the value of your house. Any sort of decline in the neighborhood will make your palace more difficult to sell.
And even if none of the above actually happens, potential buyers who follow the conventional wisdom will avoid your property.
But purchasing the least expensive home in one of the nicest places — now that's a smart move.