What Really Makes a Property Appreciate

What Really Makes a Property Appreciate
realtor.com | April 18, 2017

Patio 500wA home’s value generally appreciates 3 percent to 4 percent every year, which is attributed mostly to population growth and inflation. However in 2016, homeowners saw appreciation jump to an average of 6.3 percent.

Realtor.com®’s research team sought to find out what would boost a home’s value even more and what home features buyers may be willing to pay more for. Researchers analyzed millions of listings on realtor.com® from 2011 to 2016 to calculate the annual price growth rate of homes with certain features.

Here are some of the clear winners in housing appreciation:

Publication1Small homes: Homes smaller than 1,200 square feet appreciated by an average rate of 7.5 percent a year for the past five years. On the other hand, larger homes of 2,400 square feet or more rose by 3.8 percent a year. The smaller-home demand is being driven by millennials wanting to enter the market with a more affordable starter home and baby boomers who are looking to downsize, realtor.com® notes. Further, smaller homes are in shorter supply, which is prompting prices to increase more due to the high demand, says Jonathan Miller, president of Miller Samuel, a real estate appraisal firm.

Two-bedroom homes: Homes with two bedrooms appreciate at a rate of 6.6 percent a year, compared to homes with five bedrooms that appreciate at 4.3 percent a year, realtor.com®’s research team found.

Open floor plans: Homes with open floor plans appreciate 7.4 percent a year. It’s the hottest appreciating home feature that realtor.com® studied (see side for full list). As for features like stainless steel and granite, Miller says those amenities don’t really add any value to a home. “Those are what I call ‘have-to-have’ features,” Miller says. “A home needs to have them in a competitive market. But they don’t add long-term value. … Ten years from now, when you update your kitchen, they’ll be replaced.”

Modern and contemporary homes: Modern and contemporary architectural styles have the highest potential for appreciation, increasing at about 7.7 percent annually. This style of home is known for simple, geometric shapes, and large windows. Newly constructed modern homes also tend to be energy efficient. Bungalows and Traditional are the next highest appreciating styles at 6.5 percent and 5.6 percent, respectively. Meanwhile, niche styles like Craftsman bungalows and Victorians are among the lowest appreciating architectural styles, at 3.7 percent and 2.2 percent, respectively. Researchers speculate that may be due to some of the maintenance responsibilities in staying true to the home’s historical architecture that is often connected to these styles of homes.

Green space views: Homes with a park view appreciate at 7.9 percent a year, realtor.com®’s research team found. “[They] hold value over a longer period of time, and they recover quickly from a downturn,” says Michael Minson, a real estate pro in San Francisco at Keller Williams. “Buyers appreciate the tranquility and outdoor activities. They like being close to nature.” Indeed, homes with mountain views appreciated on average by 5.1 percent, and homes with a lake view at 4.9 percent. Ocean views appreciated the least of the “home views” studied, at just 3.6 percent a year. Recent storms may have spooked buyers from oceanfront properties as well as the fact that the highest-cost homes tend to be along the ocean, realtor.com®’s research team notes.

Source: “Appreciation Sensation: The Real Factors That Boost Your Home’s Bottom Line,” realtor.com® (April 17, 2017); REALTOR® Magazine Online, Daily Real Estate News 041817

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12 Most Popular New-Home Amenities in 2015

12 Most Popular New-Home Amenities in 2015
Article by Daily Real Estate News | May 18, 2015

NAHB-LogoMaster bedroom walk-in-closets and a laundry rooms are the top features that builders are most likely to include in a new home this year, according to a survey of builders conducted by the National Association of Home Builders.

“Both features speak to improving organization and storage characteristics of new homes,” according to NAHB on its Eye on Housing blog.

Greater energy efficiency amenities also were ranked more important, with low-E Windows coming in No. 3 on the most likely amenity list on new homes. Energy-Star rated appliances and windows as well as a programmable thermostat also rated high.

The following were ranked as the most likely features and amenities to be included on an average single-family home in 2015:

  1. Walk-in closet in master bedroom
  2. Laundry room
  3. Low-E windows
  4. Great room (kitchen-family room-living room)
  5. Energy-Star rated windows
  6. Ceiling height on the first floor of 9 feet or more
  7. 2-car garage
  8. Programmable thermostat
  9. Granite countertop in the kitchen
  10. Central island in the kitchen
  11. Bathroom linen closet
  12. Front porch

On the other hand, the features identified in the survey as the most unlikely to be included in new homes this year are:

  1. Outdoor kitchen (cooking, refrigerators and sinks)
  2. Laminate countertops in the kitchen
  3. Outdoor fireplace
  4. Sunroom
  5. Two-story family room
  6. Media room
  7. Two-story foyer
  8. Walking/jogging trails in the community
  9. Whirlpool in the master bathroom
  10. Carpeting as the flooring on the main level

Source: “What Builders Are Building,” National Association of Home Builders Eye on Housing Blog (May 13, 2015); REALTOR® Magazine Online, Daily Real Estate News 051815


After Central Air, Buyers Want Walk-In Closets

Article by: Robert Freedman, REALTOR® Magazine
Daily Real Estate News (March 13, 2013)

Recent home buyers who want a walk-in closet but didn’t get one in their home say they’re willing to spend $1,350 for one. That’s just one of the important findings in the 2013 Profile of Buyers’ Home Feature Preferences, released today by the National Association of REALTORS®.

Buyers who wanted new kitchen appliances but didn’t get them say they’re willing to spend $1,840 for them. Those who wanted air conditioning are willing to spend $2,520.

The report looks at 33 home feature preferences based on what a representative sample of U.S. households that bought between 2010 and 2012 say they value. Just over 2,000 households participated.

Among the findings: Households in the South tend to want the biggest and newest homes, and they like wooded lots. Those in the Northeast are most likely to like hardwood floors. First-time buyers and single women are big buyers of older homes. Households with children and move-up buyers like larger homes.

The report also contains these tidbits on buyer preferences:

  • Among buyers 55 and older, 42 percent want a single-level home, compared to just 11 percent of buyers under age 35. Single women also tend to place importance on single-level homes.
  • Single men want finished basements.
  • Single men and married couples place importance on new kitchen appliances.
  • Among all 33 home features in the survey, central air conditioning is the most important to the most buyers; 65 percent consider this very important.
  • The next most important feature is a walk-in closet in the master bedroom; 39 percent considered this very important.
  • Also important — buying a home that’s cable-, satellite TV-, or Internet-ready.
  • Thirty-two percent of buyers say they’re willing to pay a median of $5,420 more for a residence that also has waterfront property, and 40 percent say they’re willing to pay a median of $5,020 more for a home that’s less than five years old.

Read more on the report…

Source: Robert Freedman, REALTOR® Magazine; Daily Real Estate News (March 13, 2013) | Blog, In The News, distribution provided by Kenneth Bargers and Bargers Solutions, member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

The World is a (Virtual) Stage

Article by: John Watkins, Nashville Home Inspection
February 2013 Newsletter

According to recent National Association of REALTORS® (NAR) statistics, up to 90 percent of all home buyers are starting their home search using their fingers rather than their feet (or their car keys). Other data suggests that 63 percent of buyers drove by or walked through a home after an on-line search.

Some of the places buyers stop to view home listings are not the familiar real estate names from years past, but instead are called Zillow, Redfin, Trulia and Craigslist.

JohnFeb2013email-1With so much (internet) browsing going on, sellers are turning to home design professionals that can set the stage both in the home and in the virtual realm.

For some sellers, home staging may entail storing personal belongings and renting furniture and accessories for their home to accentuate its best features. With virtual home staging, however, while the personal belongings are still stored, the empty house is filled not with rental furniture, but with virtual furniture.

Why consider virtual staging? Some real estate agents suggest that selling a home works best when a home can capture a buyer’s imagination. Virtual home staging helps make that happen by highlighting a home’s best features, to make sure those features are what a buyer notices first. Staging in this way ensures that a home’s potential is clearly visible to potential buyers.

What staging a home isn’t… is the doctoring of photos to show a falsified version of a home. Virtual home stagers do not hide damage, add rooms, remove walls, or change countertops to trick a prospective buyer. Instead, stagers place images of attractive furniture, décor, area rugs, art and mirrors in a space to transform plaster and wood into a warm and inviting home.

JohnFeb2013email-2How does it work? Some virtual stagers use software to determine the exact dimensions of a room from a photo supplied by the seller. Then a 3D modeler adds appropriate and fashionable models of furniture, paintings and decorative items into the room model. Once the seller is satisfied, a digital file is created. The process has been refined in recent years so that the final pictures are “virtually” photo-realistic. Depending on the company, virtual staging cost may range from around $200 to $400 or more (approximately ten percent of the cost of traditional staging).

What are some of the secrets of both 2D and 3D home staging? When it’s time to sell, turn that office back into the third bedroom that it was meant to be. If there is a formal dining room, don’t show it as a family room. Buyers can use their own imagination but should first be allowed to visualize rooms the way they were meant to be utilized.

If rooms are too dark, a mirror can reflect light and serve as a faux window, allowing the room to feel brighter and more open.

Even though most room furnishings will be absent, the few that remain should be arranged around the seat with the best vantage point. This will help create a focal point in the space.

The phrases “clean” and “neutral” cannot be used too often when it comes to showcasing a bathroom. To give a bath the feel of a spa, white linens and towels will repeat the themes of order, cleanliness and luxury.

For very little cost, kitchens can look more contemporary simply through a hardware update. Brass hardware is out-of-date, with pulls and handles in silver or brushed silver much more desirable.

Source: John Watkins, Nashville Home Inspection, February 2013 newsletter (February 5, 2013) | Blog, In The News, distribution provided by Kenneth Bargers and Bargers Solutions, member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Men and Women Agree in Home Must-Haves

It’s true. Men aren’t looking for exactly the same things women are when they go home shopping. 

ZipRealty surveyed 1,000 home shoppers and concluded that while about an equal number of men and women sought green features – about 27 percent – and 35 percent of both sexes put a high priority on a home office, there is disparity in the desire for other features. 

Both sexes did agree on the biggest turn-offs: structural damage, bad odors, a busy street, and an awkward floor plan.

Here are the top 10 features most desired by men:
1. Garage or designated parking space, 85.5 percent
2. Master suite, 79.8 percent
3. Ample storage space, 71.2 percent
4. Guest bedroom, 70.2 percent
5. Large closets, 64.2 percent
6. Outdoor entertainment area, 63.4 percent
7. Gourmet or updated kitchen, 59.1 percent
8. Breakfast room or eat-in kitchen, 55.2 percent
9. View, 44.5 percent
10. Large yard, 43 percent 

Here are the top 10 features most desired by women:
1. Garage or designated parking, 87.7 percent
2. Master suite, 77.8 percent
3. Ample storage space, 72.7 percent
4. Large closets, 68.7 percent
5. Outdoor entertainment area, 64.2 percent
6. Guest bedroom, 63.9 percent
7. Gourmet or updated kitchen, 61.8 percent
8. Breakfast room or eat-in kitchen, 56.1 percent
9. Large yard, 43 percent
10. Wood floors, 40.9 percent 

Source: ZipRealty.com (06/10/2010)

10 Home Features Buyers Want

Home designers and builders speaking at the recent International Builders Show in Las Vegas say that buyers are seeking cost-effective features and rejecting things that don’t have lasting value.

“It’s all about family togetherness – casual living, entertaining and flexible spaces,” says Carol Lavender, president of the Lavender Design Group in San Antonio.

Paul Cardis, CEO of Avid Ratings, which conducts an annual survey of buyer preferences, identified these must-haves in new homes:

  1. Large kitchens with islands
  2. Energy efficiency, including energy-efficient appliances, super insulation, and high-efficiency windows.
  3. Home offices
  4. Main-floor master suite
  5. Outdoor living space
  6. Ceiling fans
  7. Soaking tub in the master suite and/or an oversize shower with a seating area
  8. Stone and brick exteriors rather than stucco or vinyl
  9. Community walking paths and playgrounds
  10. Two-car garages, but three-car garages are even more desirable

Source: MarketWatch, Steve Kerch (01/30/2010)