Navigating Home Value: Factors That Can Make or Break Your Sale

What do you believe your home is worth? Homeowners often overestimate their property’s value, which can lead to disappointment when their home doesn’t sell quickly after listing. You can more easily avoid common home-selling mistakes by understanding the factors that impact your home’s value. This article will give at least a few things to keep in mind when pricing your home, and hopefully attract serious buyers by reducing the time it sits on the market.

·       LOCATION, LOCATION, LOCATION

While your current home might be perfectly situated for you, others may not find it true for them. Buyers are interested in the school districts, proximity to their places of work, shopping, and entertainment. In fact, when determining a property’s worth, location can be even more important than the size or condition of the house.

·       HOME SIZE

When assessing your home’s market value, size is a crucial factor, as a larger home can increase its value. Alongside square footage, a home’s usable space is equally important for determining its value. Livable space is what buyers and appraisers prioritize. Since bedrooms and bathrooms are especially valued, having more of each typically boosts your home’s worth.

·       AGE, CONDITION, UPGRADES AND UPDATES OF HOME

Many buyers are willing to pay a premium for a move-in-ready home, and newer homes will usually appraise higher. That being said, updates and upgrades may increase the value of an older home. Before making improvements or renovations to your home, it's wise to consult a real estate agent or other professional to assess the potential return on investment and any increase in value.

·       LOCAL MARKET AND NEIGHBORHOOD COMPS

Talking with a real estate professional can be invaluable for comparing sale prices of similar homes in your neighborhood. When valuing a home, it’s essential to consider factors such as the number of properties for sale, the level of buyer demand, and current market conditions.

·       ECONOMY AND INTEREST RATES

US Real Estate Insider states the following:

Supply and demand: The current low inventory of homes for sale has resulted in increased competition among buyers, driving up prices.

Interest rates: The historically low mortgage rates have made borrowing more affordable, thus increasing demand.

Economic growth: A strong economy with job growth and rising incomes encourages people to buy homes, which further fuels demand.

Demographics: Population growth, migration, and changing household sizes also impact the demand for housing.

Government policies: Regulations, tax incentives, and housing programs affect both supply and demand in the housing market.

Construction costs: High lumber prices, labor shortages, and supply chain disruptions have increased the cost of building new homes, limiting supply.

GDP growth: A robust GDP growth can indicate a healthy economy, leading to higher incomes and increased demand for housing, potentially driving up prices.

Unemployment rates: Lower unemployment rates can boost purchasing power, increasing demand for homes and potentially leading to higher prices.

Inflation: If inflation rises significantly, it can erode purchasing power and make homes relatively more expensive for buyers, possibly dampening demand and putting pressure on prices.

Interest rates have a direct impact on the real estate industry, and, consequently, home prices. Low interest rates make borrowing more affordable, increasing demand and possibly driving up home prices. In contrast, higher interest rates can decrease demand and apply downward pressure on prices.

So, how can you align your expectations of your home’s value with its actual worth in today’s market?

·       Partner with an experienced real estate agent to accurately price your home.

·       Complete essential repairs and upgrades to enhance your home’s value.

·       Improve curb appeal by upgrading your landscaping and your home’s exterior appearance.

·       Speak with a realtor about offering incentives to attract buyers.

It can be challenging to remain objective when putting your home on the market, especially since you've created many memories there. Remember, you’re preparing to make new memories in a different home. Partner with a trusted real estate agent to guide you through the process.

Sandi Downing Real Estate/Keller Williams

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