What Affects the Resale Value of My Home?
Homebuyers searching the Park City and Deer Valley real estate market often focus on the factors that suit their needs today and for the duration that they own the home or condo. When considering what property to buy many overlook the future resale value. I have a saying that "whatever you buy I'm going to have to sell" so I'd like to discuss the most important factors of reselling a home in Park City, Utah.
While some believe that you should approach the buying of a home as more of a business decision, I believe if you buy what you love others will love those features when you choose to sell your property. The location of the property, size, layout, and condition all influence whether the home is a good investment, or whether you will have resale problems later on.
Here are a few things you might want to consider that will affect a home’s resale value down the road.
In Park City, location can affect the real estate values more than anything else. Homes in a desirable location will attract a larger pool of buyers, and competing buyers typically push up prices — And this is exactly what you want when you put the house up for sale in the future!
Although a good location is pretty subjective, most home buyers tend to want homes with the following amenities:
- A quiet street
- Good transportation links to downtown or the ski resorts
- Ski Access
As a result, homes on a busy street may resell for 20% less than similar homes in the quiet neighborhoods of Park City. Conversely, homes with a good view sell at a premium of up to 20%.
Example of a Real Story:
Several years back I helped a client buy a home in Deer Valley with the sale price of $2,750,000. The buyers chose a home with a three-car garage, master on the main, great views, and huge deck space. Four years later I sold the same home for the buyer for $4,000,000 because of these features. A very similar home sold across the street four months before for 20% less but we were able to demand a higher price because the seller had what everyone wanted in a Deer Valley property.
LAYOUT AND CONFIGURATION
Regardless of the square footage of the house, the configuration of the rooms plays an important role in establishing resale value. For example, bedrooms and bathrooms with poor layout or functionality could negatively impact the value of the property.
Homebuyers typically want 3 or more bedrooms, according to NAR. Likewise, be careful when purchasing a home that is too large, because this could be too much for homebuyers to handle.
Here are some common items that will usually raise the resale value:
- Walk-in closets
- Open floor plans
- Big laundry rooms
- A high-functioning kitchen
- A master suite
- HVAC system
ADDITIONS AND RENOVATIONS
Some remodeling projects can add instant value to your home. Interestingly, studies show that replacing old siding provides the greatest return on investment and gets the highest resale price — Although, most of the homes in Southern California that siding is usually confined to mid-century modern and modern architectural styles.
Studies also show that adding a bedroom puts your home into another price category as well, so convert your loft or den can be an instant injection of equity. But again, just be aware that a 5th bedroom, may or may not add value depending on your home’s demographic.
Quick kitchen fixes, like replacing cabinet doors or adding new sinks and faucets, will typically increase the value of your home — Sometimes by the exact dollar amount you spent on the update. Adding a master bathroom can add 20% to your home’s value.
THE ROLE OF THE AGENT
The price of your home is affected by external factors. For example, if a local employer moves out of town, the value of your home will likely decrease — The most extreme example of this is what happened in Detroit after the auto industry’s hay day.
Interest rate hikes, unemployment rates, and even birth rates can also impact house prices. Thus, it’s usually impossible to accurately predict the future resale value of a home.
However, an experienced real estate agent can help — If you don’t have an agent yet, give us a quick call or text and we can refer a top agent in your area. If your home is ready to sell, ask your agent to prepare a home value estimate. This document analyzes the current selling prices of comparable homes in your neighborhood and sets a price range for your home.
When considering resale value, ask your agent to consider local housing market price trends, supply and demand, transportation plans, and incoming industries to estimate the likelihood of getting a good price when you eventually do sell.
If you don’t have an agent, call or text me anytime!Posted by Derrik Carlson on