This Old House’s Value
David Bates / March 12, 2012-3:36 pm
I did an analysis of 2011 Single-Family-Sales median sale prices based on the year the home was built. It made for what appeared to be a very simple and understandable chart that simply showed the older the era of the house, the less the median sales price. But don’t get fooled by it. It’s not age that is devaluing the home, like miles on a car, it’s that the newer the era of the home, the more features and benefits the home has which are creating value.
For example, the average size of the newly constructed U.S. home grew from 983 square feet in 1950 to over 2,300 square feet in 2004 according to the National Association of Home Builders. Over that time period, consumer demand for extra-large and supersized homes in Greater Boston mirrored the national trends. In my analysis of the single family homes that sold in 2011 and were built between 1945 and 1969, roughly 4% were larger than 3,000 square feet and about 2% were larger than 4,000 square feet. Compare that to the 32% of homes constructed after 2000 (and sold in 2011) which were more than 3,000 square feet and the 14% which were larger than 4,000 square feet.
The newer, bigger homes had more bathrooms as well. Of the single family homes that sold in 2011 that were constructed between 1945 and 1969, only about 40% had more than one full bathroom and about 6% had at least three full baths. But of those constructed after 2000, 95% had more than one full bathroom and over 25% had at least three full baths.
There are a host of other features adding value to newer homes as well, including more efficient heating (insulation, high efficiency, etc), better cooling systems (central a/c) and fewer known hazardous materials (no lead paint, uffi or asbestos).
So, in terms of value, maybe some folks see the age of a home as a direct correlation to value and maybe others see… “The Bates Formula for Predicting Super High Home Values” as the lens for understanding value? LOL