What Determines US Property Values?
Have you ever strolled past a house and thought to yourself,
I wonder how much that property is worth? Even if you haven’t, it’s always nice to have an idea as to how much your home is worth. Or, you may just want to value another property of interest whether you’re considering buying or investing in it. Either way, let’s talk about what determines US property values.
What are the different contributors to overall property value?
Here are some of the major aspects that help to determine your property value:
Location and surrounding environment: The general area of the neighborhood will be a main consideration, as well as what’s nearby. This refers to everything from schools, parks, stores, public transit, greenspace and more. Typically, areas that are more accessible and are in good neighborhoods are valued higher.
Size in terms of square footage: Of course, bigger homes are typically valued higher than smaller homes, which can be measured on the basis of square footage. Some houses may seem bigger inside (i.e., open concept homes) even though they may have less square footage than another property which isn’t as open. These open-concept homes will be valued higher since there is growing preference toward them by homeowners.
Number of bedrooms and bathrooms: This also plays a role in the overall value of a house since it determines how many people can comfortably live in the space. As for bathrooms, not all bathrooms are created equal. Full bathrooms that have a complete shower, bath, toilet and sink contribute more to the overall value than do three quarter or half bathrooms that don't include the complete ensemble.
Other aspects that will influence the property value include:
Exterior of the house: This includes the landscaping aspect of the property. Obviously, one that is better maintained and looks nicer will be valued higher than one that is not. Often, an individual’s impression of a house begins before even going inside. You should also consider the condition of exterior paint, doors and windows.
Interior of the house: The condition of the inside of the house is also of great concern. This refers to everything from the paint, flooring, furnishings and other parts of a property’s interior.
Condition of housing market in terms of number of buyers and sellers: This will also play a role in the area’s general housing prices. With areas that have more sellers than buyers, this translates into potentially lower prices as people compete to sell their homes. The opposite is also true in areas where there are more buyers than sellers. This will tend to drive housing prices up as buyers will be bidding against one another.
What are some methods you can use to determine property value?
The first option, considered the easy way out, is to hire an appraiser. Of course, this comes at a cost, which is why we present to you the comparable sales method. Just as it sounds, you can use multiple pieces of comparative information to generate an estimate of a property’s value. To do this, you may consider using some of the following techniques and resources:
There are paid online services that offer very detailed real estate data in the US, such as Electronic Appraiser. Using these details, you can judge aspects of your property more accurately based on the findings in these reports.
There are also free services which do not provide as complete of a picture, but do allow for educated guesses. A perfect example in the US is Zillow.com. You can see general trends in property data, as well as specifics about other homes in your area. You will have to do a bit of detective work in deciding what your home is worth in relation to the information found on these sites.
Lastly, you can also turn to the MLS as each city has one. This is an alternative to Zillow and may be even more accurate since it’s based only on your area.
All in all, by carefully considering and weighing the different elements that comprise a property’s value, you will be able to come up with a reasonable estimation without paying for an appraiser. This will save you a few thousand dollars that could be spent elsewhere in a much more fulfilling way – imagine the possibilities.
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