Trends In Home Value Appreciation in 2017- What’s Hot?
It might surprise you to know that conventional advice for boosting appreciation of your home value doesn’t give you the bump it may have in the past. Features like granite counter tops and stainless steel appliances don’t accelerate appreciation in today’s market. Why? Simply put–what home buyers are looking for has changed. Historically, in a strong economy, home values appreciate an average of three to four percent per year. If you are looking to buy a home or thinking about renovations to increase home value appreciation, these are the options that are going to grow your home value the most.
Location, Location, Location: No surprise here. Location has been a consistent appreciation factor for decades. What makes a location desirable for buyers has shifted some in recent years though. With the trend of more people leaving the suburbs and moving back into city centers, homes close to public transit options have been appreciating at an average of 8.4% for the last five years. Homes in school districts with “top” or “best” rated schools garner appreciation of 7.2% per year. Homes with views of green spaces like parks grow 7.9%, meanwhile ocean view properties have been averaging appreciation of only 3.6% per year.
Size Matters: Size matters–but perhaps not in the way you might expect. Fierce competition for smaller homes by Millennials and Baby Boomers has shifted the appreciation equation to smaller homes. Homes of 1,200 sq ft and under appreciate 7.5% per year in the current market, whereas homes double the size at 2,400 sq ft and up appreciate only 3.8% per year. Smaller homes naturally mean less bedrooms with two bedroom homes appreciating 6.6% per year, compared to homes with five bedrooms appreciating 4.3% per year. The lower inventory of smaller homes combined with the increasing demand means the size factor will continue to impact home value appreciation for the foreseeable future.
Open and Modern: Open floor plans have been popular with buyers for some time, however, the trend toward smaller homes makes an open floor plan an even stronger appreciation value-add at 7.4% per year. Open floor plans make smaller homes feel more spacious. Changes in buyer preferences toward modern and contemporary home styles with clean lines, large windows, high ceilings, lots of natural light and energy efficient features have pushed appreciation of modern architectural style homes to 7.7% per year, while other architectural styles have stalled or even dropped in appreciation.
When looking for a new home, knowing the trends that bring the best home value appreciation helps you choose a home that will bring maximum return on your real estate investment. Century 21 Broadhurst can help with that. If you’re considering renovations to boost appreciation of your current home, there are likely factors in our list that you can’t change, such as location, however, renovations to open up your floor plan and add modern features can help you cash in on current trends.