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What Determines Property Value?  • Windows were aluminum single pane • Wall and Roof Insulation was minimal • Vinyl and wall-to-wall carpeting for flooring • Master baths common, but small • Minimal baseboards and crown molding unusual • Landscaping minimal in new construction • Natural lighting not priority, skylights rare • Bay, greenhouse, or dormer windows rare • Formal entry small or awkward, not standard • One phone line • Walk in closets were not standard Features Almost Standard Today • Windows are vinyl clad or wood and double pane • Wall and roof insulation is required • Hardwood, marble and ceramic tile flooring • Master baths are often larger than bedrooms • Baseboards and crown moldings are frequent • Landscaping required in new construction • Frequent use of skylights • Bay, greenhouse, or dormer windows frequent • Large formal entries standard in most homes • Multiple phone and high speed internet access • Walk in closets are larger than some bedrooms Equally significant in determining an older home’s value compared to a newer home is the extent of the updating. Are all of the components updated, or are some of them still 30 years old? Plumbing, electrical, roof, and appliances of the home may be at or near the end of their life, which means that while the price to purchase may be less, the maintenance may be higher. © Copyright 2003 Ara Croce. All Rights Reserved. USA. SITE MAP |
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On the other hand, an older home can have a great location, a larger yard, or other attributes that make it highly desirable. Even with the above, the most important factor in determining value is current functionality. Even if you have many luxury features and recent updating, ‘functional obsolescence’ will dramatically reduce the value. This term means that something about the functionality of the home is obsolete and difficult to cure. Today, smaller homes that are divided up, or have a small closed off kitchen, don’t work as well with our current life styles. They may have been fine when “leave it to Beaver” was more of the norm, but today when both parents often work and the main time the family has together is mealtime – families want open kitchens arrangements or “Great rooms”. If a home is priced lower than others because of some defect, is it curable? Be cautious when viewing an obsolete feature that will be difficult or expensive to remedy. Some functional features to pay attention to: What Increases Property Value• Location, Location, Location • Close proximity to a diverse, economic area • On a hill with a view, and/or privacy • Uninterruptible views or access to water • In the path of progress • Open floor plan with good traffic flow and light • Quality materials What Decreases Property Value • Location, Location, Location • Remote locations from economic diversity • Near noise (Hwy) that’s likely to increase • Lack of privacy • In a neighborhood mixed with industrial uses • Awkward floor plan, dark rooms • Cheap materials and/or shoddy finish work Knowing all of this, the beauty of owning homes in our area is that with lack of additional land to build on, and resistance to building more homes in general in the greater bay area, all homes increase in value. As long as you can be in a property from 2 to 5 years, you will find the value increasing. I started in this business long enough ago to remember when a little cabin without a perimeter foundation sold for $20,000. Now they sell for $200,000 to $300,000 in the same condition. Granted it’s the low end of our local housing scale, but this is remarkable appreciation. We can be thankful that even though we have ups and downs, the strong economic base of our area continues to keep our real estate values rising as it has since the 1920s. |
