Owners of Buckhead real estate often have questions about what their property could be worth. It’s a hard question to answer because it depends on several different factors. While many of the factors have to do with your home itself, some of your home’s value has to do with things outside of your control. In this article, you’ll get a better idea of what influences your home’s value. You can use this information to determine where you might price your home if you choose to sell in the coming months.
1. The neighborhood
The neighborhood where your home is located impacts your home’s value in multiple ways. If you agreed to a deal to sell your home, your home would likely need to appraise for a fair market price before the deal could be completed. This is an important step in the process for the buyer because it affects their ability to receive financing for their home. If the home can’t appraise for a fair market price, the lender might be unwilling to issue the necessary funds to facilitate the home sale. One of the key pieces of information that an appraiser will use to determine the value of your home is to look at comparable properties from the surrounding area. If you want to understand how this affects the value of your home, you may consider asking your realtor to run a CMA, or Comparative Market Analysis, for you. This report will take a look at recent home sales in your area to help you get a better idea of what your home might appraise for.
Your neighborhood also affects the value of your home because of the way it impacts your quality of life. Many home buyers take the neighborhood into account when they search for a home. Neighborhoods that are zoned for top-rated schools and that offer community amenities such as a walking trail or a park will contribute to the value of each home in a positive way. The ideal neighborhood is also close to key services such as grocery stores, hospitals, and fire stations.
2. The state of the market
The current state of the housing market plays a role in every home transaction. Over the past few years, the market has largely favored sellers. Interest rates dropped to a staggeringly low level in 2020 as the federal reserve searched for a response to the COVID-19 pandemic. Many potential buyers took advantage of the opportunity to purchase homes during this time, and plenty of sellers refinanced their loans and secured a lower monthly payment. Times have changed, and interest rates recently rose above 7%. Couple that with an inflation rate that is as high as it’s been in nearly 40 years, and you’ll understand why many experts predict that the market could experience a recession over the next several months. Home prices are already dropping in many areas, and it’s expected that this will continue into the new year. Some markets are more susceptible to the effects of the economy than others, but it will undoubtedly have an impact across the nation.
3. Home size
It’s easy to understand how a larger home could be worth more than a smaller home. An easy way to determine a rough estimate of a home’s value is to calculate how much it’s worth per square foot. The total space a home offers is not the only relevant statistic. You also must think about your home’s usable space. Unfinished spaces like garages and attics often don’t factor into the home’s overall square footage. You may have a 3,000-square-foot home, but if the garage measures 600 square feet, you’ll only be able to list your home as a 2,400-square-foot home. Buyers will also ask questions about how many bedrooms and bathrooms your home has. Usually, homes with more bedrooms and bathrooms are worth more.
4. Age
It’s not uncommon for a newer home to appraise at a higher value than an older home. Buyers generally feel more confident about the condition these homes are in. They assume that older homes come with more risk, and they expect that they will need to make repairs to key home functions like the roof and the plumbing. This doesn’t mean that old homes are always worth less than newer homes, but it does mean that your home’s age is a relevant factor when you’re thinking about how much your home is worth. One way to gain clarity about the shape your home is in is to order an inspection before you list your home for sale. Your buyer will more than likely want to schedule their own inspection during the initial option period in their contract, but scheduling your own inspection will allow you to get out in front of any issues that could impact your home’s value or cause a deal to fall apart.
5. Upgrades and updates
Home upgrades can impact the value of your home in a positive way. It’s important to remember that some upgrades provide a higher ROI than others. There are some projects you can take on that will return most of the upfront cost when you sell your home later on. Other renovations might make more sense if you plan to enjoy them yourself before you move, but you shouldn’t expect to recoup the money that you spend when you sell your home. If you’re thinking about doing any renovations, make sure you choose the right projects to take on that will give you the best chance at recouping value later on.
Kelly Boudreau serves buyers and sellers throughout the greater Atlanta area. She grew up in the Atlanta area and knows the best neighborhoods inside and out. She has spent the past 25 years making a name for herself in the real estate industry. Throughout that time, she has earned a reputation as one of the top agents in the entire community. When you’re ready to begin shopping for Buckhead real estate, reach out to Kelly. She would love to partner with you in your search.
*Header photo courtesy of Kelly Boudreau
