Home values throughout California have appreciated 20% to 40% between 2020 and 2022, but no two homes are alike. Factors that may influence your homes’ value include:
Location is certainly the number one factor when considering a home’s value. For example we found a run-down 1,080 ft. home on a 3,800 ft. lot with no garage on the Coast Highway in Malibu listed for $4,750,000 ($4,398 per foot). Less than 20 miles away in the City of Moorpark we found a lovely 2,700 ft. home on a 7,000 ft. lot with a 3-car garage listed for $850,000 ($315 per foot): living at the beach is very expensive. Another example: homes with views are generally more valuable than homes without views, everything else being equal.
Supply and Demand
Supply and Demand comes in at a close second to Location when determining the value of a home. When Demand exceeds Supply in an open market, prices have no choice but to increase. At times the Law of Scarcity piggybacks on demand to drive prices even higher: “If what we desire appears to be in short supply the perception of its value increases significantly.”
Other Noteworthy Factors Include…
- Interest rates: Interest rates affect affordability when a vast majority of Buyers require mortgage financing.
- Economic conditions: Do Buyers feel comfortable with their jobs, businesses, and income? During times of economic expansion real estate values tend to increase.
- Property performance: How much income or rent is generated by the property?
- Demographics: Is the local population growing or shrinking?
- Amenities: When comparing one home to another amenities (covered patio, pool, spa, built-in BBQ, guest house, RV parking) matter.
- Aesthetics: Kitchens, bathrooms and flooring are at the top of the list of renovations that will add the most value. As an example: a home with a contemporary kitchen will generally be more valuable than a home with an original 1960’s kitchen.
- Investment potential: Investors are looking for specific improvements that will enhance the rental return.
- Energy efficiency: Some Buyers may be interested in energy efficient materials, fixtures and features.
Can I find my homes value on the internet?
Online tools are a good place to start but an algorithm is no substitute for a local expert. Give us a call and we’ll discuss the condition and amenities of your home and review market sales to provide you an accurate estimate.