How Much Is My Home Worth?
How much is my home worth
... is a question that many homeowners are asking. In fact, asking
“how much is my home worth TODAY?” is even a more common
question in recent times. As most people are well aware …
home prices in the U.S. have increased significantly in
the past few years. In many areas of the country, home prices have
doubled in the past 5 years alone. The
most recent data forecasts another 7 percent in 2005 after having
increased 12.4 percent nationally (ending Sept 30, 2004)*.
When and where will home prices level off is a question in everyone’s
minds. It could be happening now or it may happen soon, especially
if interest rates begin to rise again. Anyway, those of us who have
owned homes during this real estate “boom” have enjoyed
a super return on our investments.
Because of the continued appreciation in home prices, the answer
to the question “How much is my home worth today?” is
something that we all are curious to know even if we aren’t
planning to sell anytime soon. But to those of us who are making
plans to sell, determining our home worth is an even more important
question. The following is the most common procedure for determining
home worth (price).
When it comes to estimating the market value
of a property, the home (building) and design features are the main
variables. The value of the property (land value) is relatively
easy to estimate because land characteristics and lot prices in
most areas are uniform. Therefore, the variations in houses
themselves are what determine the more exact worth of a home. This
is what makes estimating true market value more of a challenge.
If the home is rather unique in characteristics and unlike others
in the neighborhood, then the exact market value is much more subjective
The most common method of answering the question
“how much is my home worth?” is to use a comparable
sales method. The comparable
sales method estimates the value of a house by comparing
it to the prices of similar property sold in similar locations within
a recent period of time. The assumption being that your home
is worth whatever the market will pay. It works quite well in the
residential housing market for most homes. But if there are not
many similar recently sold properties from which to make comparisons,
then this method alone may not be sufficient.
The following characteristics of a home are used
in beginning to determine “how much is my home worth?”
Bedrooms. The number
of bedrooms in a home is still the most common way to describe a
property. The number of bedrooms provides an indication of the size
of the home and therefore its value. Over the last 50 years the
number of bedrooms in the typical new home has grown from two to
four but the average household size has decreased and the most homes
today are occupied by either one or two adults without any dependents.
Regardless of our shrinking households our desire for larger homes
with large numbers of bedrooms has not diminished. Four bedroom
houses or three bedroom apartments are worth more because they appeal
to a wider buying market. Besides the larger size, most people like
extra bedrooms for the options of using it as a office or hobby
Bathroom. The number
of bathrooms/toilets is second only to the number of bedrooms when
it comes to describing a home. The market values a second bathroom/toilet
or shower. The second bathroom/toilet offers greater privacy and
comfort, which are prized commodities today.
The number and size of family rooms is also important in determining
worth. Older homes usually only had 1 living or family room. Now
homes often have at least 2 and sometimes 3 or more. Often the third
room is called a bonus room or game room.
Garage Size. Suitable
accommodation for cars is important but it doesn't rate as high
as the living areas in a home. Yet unlike homes built 60 years ago
with only a 1 car garage, homes today are preferred to have a 3
car garage. The extra space is used for a 3rd car, recreational
vehicle, or just desired storage.
Yard, Landscape etc.
Obviously, the lot size is an important factor in determining “how
much is my home worth?”. Therefore, the size of the yard and
kind of landscaping is also factored in when determining home value.
A pool or Jacuzzi for example adds noticeable worth to a home. Also,
space for RV parking is valuable to some buyers. Landscaping is
more or less subjective to the individual buyer as is the design
of the home as to how much value it adds. But a beautiful spacious
landscape definitely only increases a homes worth.
Storage. Storage is
probably the most underrated influence on the value of a home. We
are living in smaller households but we are accumulating more possessions
and homes with plenty of storage space are likely to be more highly
valued in the market. The need for more storage space is also behind
the continuing appeal of homes with multiple bedrooms.
These are the some of the characteristics of a
home that are factored in when determining value. By comparing other
recently sold homes of similar features in the same area, one can
estimate a market price. The answer to the question “how much
is my home worth?” can be rephrased “how much will
the market pay for my home?” The bottom line approach
to estimating value is to determine how much the market has recently
paid for similar homes. Yet the most accurate method is to simply
place your home on the market for sale and see what offers you receive.
Then you will know what the market is willing to pay.
In the past few years, with prices escalating rapidly, the market
has continually paid higher and higher prices. Homeowners listing
their homes for sale have been pricing their homes higher than the
previous sold homes. Many homes in many areas of the country actually
sold for higher prices than the listed price. But the recent real
estate market has been unique. It’s not often that you see
this kind of appreciation. The market pressures that have contributed
to the “boom” in the housing market may soon be subsiding.
But as long as the pressures remain … homeowners can continue
to enjoy seeing their investments appreciate in value.
If you are curious to know the answer to the
question … “how much is my home worth today?”,
get a free
home estimate! Real Estate professionals will compare
your home with recently sold properties in you neighborhood and
give you a value estimate by email.
There is no phone contact needed and there is no obligation.
Receive your free answer to the question … how much is my
home worth? Ask for your Free