A big part of why homeownership becomes a goal over renting in many families is the concept that property value increase over time. After the housing crash of 2008, most real estate experts are quick to remind people that while generally, property values go up, this isn’t true of any given house because there are a lot of factors that affect your sale, particularly the state of the world, the neighbourhood, and the economy at that moment in time. Here are some factors to keep looking into as you decide whether to sell in order to see a property value increase since purchase.
Cities and towns experience shifts, with companies that provide good jobs opening up and closing down, city governments adding amenities like parks but also letting these amenities fall into disrepair – it just depends on where you are. People also care substantially about the school system and the distance to popular attractions in the area, which all can impact how much someone wants your particular home. More than almost anything else, the interest in your particular location will influence how much your home price rises.
As we’ve seen in 2020 and 2021, not having enough home options available drives prices up, while having lots of options to pick from causes buyers to drive harder bargains. This is a factor that is more or less entirely out of a home seller’s control, so it’s wise to just keep an eye on inventory in your area and speak with your real estate agent about what they’re seeing when it comes to inventory if you’re working to sell your home fast.
In-Demand Home Features
If your house had a great wrap-around deck or a luxury swimming pool right before the pandemic hit, you may have seen a big jump in demand because those features were very popular as people spent time at home. Over the years, layouts and design elements become more or less en vogue, which can impact how much your home’s value increases.
Renovations That Add Rooms/Finished Square Footage
When you bought your home, you might have chosen to do additions, finish an unfinished basement, or convert a large closet into a new bathroom. All of these items, when done correctly, can add to your home’s value by boosting the home into a different square footage or bedroom/bathroom count. More buyers may want more of those things, so you get access to a wider pool.
Another out-of-your-control element is the fact that more people shop for homes when interest rates are low, meaning that they are also able to afford a bit more houses versus when interest rates are high. If you see that interest rates are about to rise, you might get a little higher property price before those rates go up.
Similarly, the economy can determine whether people can afford to buy houses for more money. If the business is booming, buying a house is more affordable for more people. It causes them to compete for the best homes. If people are struggling, they may opt to wait on buying a house or just need to stay where they are because of financial reasons, which can create less demand for your home, reducing the value.
Keeping all the factors that are and aren’t in your control in mind can help you have a realistic understanding of your own home value, without expecting too little or too much from an upcoming sale.