Home Is Worth More?
in the real estate business what drives the price of homes and he
or she will start talking about location. If a home is situated near
what people want, it will cost more than comparable homes further
away from what they don't want--or closer to what they would like
to avoid. Chances are the better located home will remain more valuable,
perhaps even appreciate faster, sale after sale after sale.
premiums differ from city to city. In one area, proximity to
the downtown district may increase value, while in another city,
close-in homes may sell for less. In most places, waterfront homes
carry a higher price tag, as long as flooding isn't a regular threat.
Great views--of mountains, cityscapes, natural areas or water--also
command higher price tags.
to amenities can certainly increase price. Being near (but not
right next to) good schools, medical facilities, shopping and employment
is likely to increase a home's value. In metropolitan areas, being
able to walk from a home to public transportation, parks, cultural
centers and stores often increase a home's worth.
are other factors, however, that influence the value of homes.
Supply and demand in the real estate market has a tremendous influence
on home prices. In seller's markets, where housing inventories are
low, a two-bedroom, one-bath home may sell for many thousands more
than a four-bedroom, two-bath home in an economically depressed
area where many homes are for sale. (Again, it's a location issue
when comparing homes in a specific area. The more bedrooms, baths
and square footage, the more a home is likely to sell for. So too,
a larger lot will usually cost more.
Age can also
be a factor. Generally, a new home sells for more than a comparably
sized older home in the same area. However, smart homeowners recognize
they can close the age-value gap by updating appliances and decor
and by returning the home to like-new condition.
especially in kitchens and bathrooms, certainly add value to older
homes. Other improvements, such as new carpeting, flooring, cable
or wiring for modern electronics, or new windows, pay off for sellers,
especially if the neighbors haven't kept up. Notice, these are all
cosmetic enhancements. The basics--plumbing, electric, roofing,
air conditioning/heating systems--are expected to be in working
order, though some people might pay a premium for gas heat, copper
pipes, and better quality construction.
can also increase a home's value, if only because buyers prefer
a home that's ready to move into. A home in good working order,
with easy-care landscaping and neutral interior colors, appeals
to the most buyers. When buyers have to compete for such a home,
its price goes up.
preferences also influence price. Today, island kitchens, screened
porches, sunrooms, office space, skylights, garden tubs and other
special features all help a home sell at a higher price compared
with have-not homes. Buyer preferences do vary from place to place,
however. In some locales, a swimming pool might help bring in top
dollar, whereas in cooler climes a pool can actually lower the home's
value. Also note, what's popular today may not be so sought-after
have their own value-added amenities--generous closet space,
a washer/dryer unit, better views (usually each higher floor costs
more in a high-rise), pet-friendly policies, quality of management,
and a good owner/renter ratio.
get what you pay for" applies to homes just as it does
to other commodities. But most of us can't afford to buy the home
that "has it all." As a home buyer, you can help ensure
the long-term value of your investment by, at the very least, purchasing
the value-increasing features that can't be added later--location,
view, architectural style.
As a homeowner,
you can add value by upgrading your home's features (appliances, counters,
fixtures, etc.), expanding its space (room additions), and remodeling
existing space. At the very least, you should be sure to keep your
home in tip-top condition.