As a homeowner, it’s only natural to be curious about your home’s value. It could be that you’re planning on selling your house, or you just want to know if you’ve built enough equity.
But what are the factors that determine a property’s worth?
In real estate, location is everything. It can make or break your property. What’s located in and around your neighborhood can greatly impact its overall value.
Appraisers usually look at job availability, the quality of schools in the area, and proximity to amenities (malls, services, recreational centers, public transportation, highways, etc.) when determining if a location is good. And if it is, chances are homes in the area are highly valued and sought-after.
- Property size, age, and condition
Your home’s age, state, and size all influence its market value. Let’s break this down one by one.
Age – Newer homes usually have more value as they are built to the latest building standards. They also require less upkeep and maintenance. This is not always the case, however. It is quite common in Metro Atlanta for older homes to fetch for a higher price when location, condition, and historical/architectural importance are considered.
Condition – As much as possible, buyers want move-in ready homes, which is why they prefer well-maintained properties than fixer-uppers.
Size – Size is a bit tricky. A big home doesn’t always mean it will be appraised at a higher value. It could be the case, however, if the property is located in a greatly coveted area. The bigger the square footage, the more land you have. Even smaller condos located in hot markets can be highly valued.
- Upgrades and updates made
Renovations can increase your property’s value, although there is no specific rate. Some upgrades present considerably more returns on investment than others.
For instance, kitchen and bathroom renovations have been proven to boost a home’s value, according to the National Association of Realtors. An upgrade as simple as replacing the entry door can also have a positive effect.
These home improvement projects are taken into account during appraisals, comparing the current state of the property to its earlier version.
- Local market and economy
Current market conditions, as well as economic indicators, also play a role in determining your home’s value to the point that they undermine the aforementioned factors. How so?
If your home is in a buyer’s market, your property might be valued lower than usual to compete with other homes in the area. Meanwhile, a seller’s market can boost your home’s value due to the limited housing supply and influx of buyers.
Supply and demand aren’t the only things that affect the local real estate marketplace. Economic factors are in the picture as well. For instance, poor economic performance can slow down a housing market and can even cause it to stagnate. Conversely, a booming economy can lead to a hot housing market.
Your Home’s Value = What Buyers are Willing to Pay
There are more factors that can influence your home’s value, but it all boils down to what buyers are willing to pay. Their needs, lifestyles, and preferences affect everything, from the desirability of a location to what are considered essential home features and lucrative renovations.