A new report on realtor.com was just released with a lot of hard data on what home styles, sizes, locations, floor plan options, and more affects your home’s appreciation. To gather this information, Realtor looked at millions of listings from 2011 to 2016 and compared features against each other. And, to preface, they also start by stating, “If the economy is strong, a home’s value generally increases 3% to 4% every year, driven by inflation and natural population growth.” Even better, they report that, “From 2011 to 2016, the national housing market was recovering from the bubble at a slightly higher speed: 6.3% a year, on average.”
The two biggest and most influencing buyer groups right now are millennials and baby boomers. Millennials put focus on location – being close to work, cultural amenities, and restaurants are a higher priority than a larger home. We’ve seen it in Seattle, the trend is back towards condominiums and city-center living. Young buyers want a space that is affordable and efficient because of their lifestyle. Baby boomers, too, are focusing on downsizing and smaller spaces. This demand is driving homes with 1,200 square feet or less to appreciate at 7.8 percent over the last five years. This is also coupled with the number of bedrooms. Two bedroom homes appreciated at 6.6% and one bedroom homes at 7.2%! (Just look at NEXUS Seattle as a prime example.)
Not surprisingly, location is one of the biggest indicators of value. Homes near public transit and good schools are huge draws and the most desirable amenities. Public transit access adds 8.4% appreciation and good schools were listed as 7.2%. Additionally, homes with a view of a park appreciate faster than every other view. Park views appreciate at 7.9%, while mountain views only hit 5.1%. Ocean views were last on the list with just 3.6% appreciation.
Also among the findings, an open floor plan seems to be the most desirable for everyone and was valued at a 7.4% appreciation rate. Second and third on the hottest home features list were a patio (6.8%) and hardwood floors (5.7%). Those are definitely attractive features that will get you your money back, if you’re looking for updates to make. Surprisingly, Realtor reports that things like stainless steel appliances and granite counter tops are now “have-to-have” features, meaning a home needs to have them to stay competitive in this market; but unfortunately, they don’t add much long-term value. Thinking of starting a home renovation project to add some value to your home? Be sure to find resources that also give location-specific details to help you determine what your plans will add to the long-term appreciation. We’re big fans of this Cost vs Value tool.