Home Appreciation

Home Appreciation: The keys to Your Home Value

The facts behind Home Appreciation

Small Homes Bigger AppreciationOn average, a home is expected to increase in value around 2-4% every year. This is tied to many factors including the strength of the economy, interest rates and type of home buyers ready to make a purchase. However, just last year, home seller’s saw an average growth of 6% on their home value. That’s great home appreciation.

In order to survey the entire market, Realtor.com looked at what drove home appreciation and ways the average home owner could add value to their home. By reviewing and analyzing millions of data records and data points over the past five years, the team of researchers discovered certain homes and features helped drive appreciation higher than others.


Small Homes Appreciate FasterIf your home is smaller than 1200 sq feet, you were able to see an average increase in value over the past five years of 7.5%, This compared to larger homes over 2,400 and those appreciated just 3.8% a year. While you can argue that’s semantics because the smaller home will be priced less than a home twice it’s size – that’s true. Yet the percentage increase is nearly 2x for the smaller home over the larger home.

Smaller homes, Bigger Appreciation. Why are smaller home values on the rise faster than a traditional 2,000+ square foot home? One answer: millennial buyers. These new buyers are first-time home buyers who don’t need a larger home and prefer a smaller one at the 1,200 square foot range versus those double in size. The other group that is beginning to drive it too: Baby Boomers. Those in their sixties are finally ready to downsize by selling their 2,400 as foot home for the 1,200 sq foot home. That’s leading to a larger demand than the market is ready to receive at the same time and has created rising prices for these small homes.

A subset of the small home category are those with just two bedrooms. The 2-Bedroom home appreciate around 6.5% a year (vs the 5-Bedroom home around 4.3% every year.


Those homes with the following features appreciate each year the following percent on average over the past five years. This will vary by market and overall home condition.

* Finished basement: 4.6%
* Fireplace: 5.3%
* Granite countertop: 2.5%
* Hardwood floors: 5.7%
* Hot tub: 3.9%
* Open floor plan: 7.4%
* Patio: 6.8%
* Stainless Steel Appliances: 3%

Source: realtor.com®

HOT HOME APPRECIATION FEATURESTo help a home sell in a competitive market and as fast as possible, many of these features are simply required including the open rooms, granite kitchen, finished basements and outdoor living areas. When home buyers tour a home, these are also their favorite home features.


When comparing the architectural style of the home, the following did better than others:
* Modern or Contemporary Home: 7.7%
* Bungalow: 6.5%
* Traditional: 5.6%
* Craftsman Bungalow: 3.7%
* Victorian: 2.2%

As is the case with more ornate and decorative homes such as a Craftsmen Bungalow or a Victorian, both are considered more upkeep and require more maintenance than a traditional style home.


Value of the ViewFinally it is true what they say about real estate: location, location, location. There is a value of the view. If your home has a park view, home appreciation is nearly 8% a year. These homes also hold value over a falling market because you can’t just pick up a home and move it to a new location. It’s either got it or not. If you home has a mountain view, it appreciates on around 5% every year. Lake views also appreciate well averaging nearly 4.9% while ocean views appreciate the least at around 3.6% each year. Homes in the vicinity of salt air face maintenance issues above and beyond a traditional home in say the woods. They also risk being in flood areas and require additional insurance and home protection against storms.

As you begin to sell your home, rely on a REALTOR to help guide you through the process of listing and selling your home – give us a call or contact us – we’d love to help you sell or buy your next home.

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