Here’s a quick overview of how your home’s value is calculated.
How is your home’s value determined? There are several variables to take into consideration.
Ideally, we Realtors like to look at nearby homes that have sold in the past six months, five homes that are currently under contract and five that are for sale. These homes have to be similar to yours. For example, if you live in a single-level home that’s 1,800 square feet, then the ideal comparable home in your neighborhood would be between 1,600 and 2,000 square feet. Or, if your home is 3,200 square feet and has a basement, the ideal comparable home for it would be between 2,900 and 3,500 square feet and (obviously) have a basement. So you need to compare single levels to single levels, bilevels to bilevels, etc.
“As long as you’re maintaining it, your home’s value is bound to go up.”
The way the market is, we’re not always able to find five comparable homes for sale. It can even be a challenge finding five pending homes that are comparable. This means we’re looking at a lot of solid data, and in this case, we’re going back 12 months instead of just six. That said, the market is improving, meaning home values are appreciating quicker than they have been in the past 12 months, so that’s another factor to take into consideration when a home is being evaluated.
As long as you’re maintaining it, your home’s value is bound to go up. Last year saw an appreciation rate of over 8%. Historically, that number waivers between 2% and 4%, so 2020 was very strong. Over 50% of all homes sold for full price or more.
If you want to increase your home’s value even more, start with some upgrades. The kitchen, bathroom, and floor areas are vital in this regard because they’re what people pay attention to in a home. If your home is carpeted, for instance, you could switch to hardwood floors in the kitchen and living room. If you’d like to know more about the newest trends in home design, be sure to check out the latest episode of my weekly radio show happening Sunday morning on AM 1280. We’ll have an interior designer join us to talk about surefire ways to increase your home’s value.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’d love to speak with you.