6 factors that impact the value of a home
April 19, 2015 |
The website HouseLogic recently came up with a list of items that impact the value of a home. We all know that highly rated schools are a bonus for nearby housing, but did you know that good schools have a lot in common with Wal-Mart and public transportation, for example? Advising buyers toward being near any of these might add thousands to a home’s value, but the cost of admission could be higher than a home, “not near a Wal-Mart.”
Here’s some of what HouseLogic uncovered:
County or state parks and golf courses
A public park might boost the property value of nearby homes by 8 to 20 percent. A recent study looked at more than 16,000 home sales within 1,500 feet of just under 200 public parks in Portland, Oregon, and found home values increased on the average:
- Natural areas: $10,648
- Golf courses: $8,849
- Specialty parks: $5,657
- Urban parks: $1,214
Living near a Wal-Mart
A study by the University of Chicago noted that living within a mile of a Wal-Mart that stays open 24 hours a day could raise your home’s value by 1 or 2 percent, and living within half a mile could boost your property value by an additional 1 percent. But, I don’t know why this wouldn’t naturally also apply to Target or other similar stores.
According to a 2009 study from CEOs for Cities, being close enough to walk or just a minutes away from schools, parks, stores and restaurants will raise your property value anywhere from $4,000-$34,000. That sounds great, but those walkable neighborhoods are usually in town. They are therefore due to location inherently more expensive and once again the cost of admission to get into them is going to be higher.
One of the “most walkable” sections of our market, for example, the average sales price over the past 15 months was $231,000. The average sales price for homes just outside this section of the MLS, a 10- to 15-minute commute by car, dropped to $161,200.
Additional dwelling spaces
Whether it’s an in-law apartment or carriage house, having a separate living space can increase a home’s value by 25 to 34 percent, according to a study of 14 properties with accessory dwelling units in Portland, Oregon. In our local market once again I saw a more moderate 4 percent to a mind-blowing 44 percent increase based on homes sold in the most desirable locations with an in-law suite. The article noted, and I think it is valid too, that an income stream can be generated, too, for buyers of these properties. I know in a local college town that for “decades” law students would lease space like this in town to be near campus.
Professional sports arenas
In the Atlanta area, we are looking at a new stadium for both the local Braves and for the Falcons. We hear that new pro sports stadiums can raise property values in a 2.5-mile radius by an average of $2,214. The downside, however, is traffic. Many times, we see home values decline until the project is completed.
Tree huggers stand proudly
Not a shocker, but whether trees are in your yard or just on the street, you should know they’re a valuable asset. HouseLogic gave us a nice gauge to show just how much trees are worth to a home’s value. These figures according to a University of Washington research survey:
- Mature trees in a yard: 2 percent
- Mature trees on the street: 3 percent
- Trees in the front yard: 3-5 percent
- Mature trees – High-income neighborhoods: 10-15 percent
What’s funny is that I have recently been asked by house-hunting buyers, “Well, Hank, if I asked you to sell my home three or four years down the road, which one (of the two they are considering buying) would you most like to resell for me?”
Based on the information I shared today, we should look for homes in proximity to a Wal-Mart, or where one will be in the near future, with mature trees that also has space to be converted to an in-law suite. Throw in a nearby park located in an excellent school district and we have a property that should resell over and over again at top dollar.
All kidding aside, every buyer has their own set of preferences and needs. However, it’s always good to know what might impact the value of a given home, neighborhood or area.
Source: “6 factors that impact the value of a home,” Hank Bailey, Inman (April 2015)
Hank Bailey is an associate broker with Re/Max Legends and a Realtor for more than a decade who provides buyer’s agent representation and seller listing services related to residential real estate.