Thursday May 21, 2020
Despite economic hiccups, the overall value of most homes on desirable plots of land continues to grow over time. Your assessed home value is going to exist beyond your four walls. What makes a home appreciate requires you to look beyond the house or even the plot of land to other regional factors.
Consider first the factors that cause appreciation.
What Makes a Home Appreciate?
There are lots of factors that help to determine a home's market value. It could be the month, the color of the house, how a lawn looks, or when the last time the roof was repaired.
However, there are some unconditional factors that make the biggest impact, regardless of those other temporary factors. Damage can be repaired and doors can be repainted, however, the land values and location of a home can't be changed.
These are the elements that determine whether or not a home's value grows over time. It will have to be in an area with a strong economy that will grow. The kind of funding that goes into the schools and local public works will also make a difference.
These are out of your hands but they're quantifiable.
There are few appreciation factors as powerful as land value. Not only are you considering the actual plot, but you've got to consider the region around it. Nice soil is a positive factor but the other houses around you can matter as much
Think about how much other people are paying for homes in your region. If you're surrounded by million-dollar mansions, your home is going to have more value.
If you're at the end of a cul-de-sac, it means that families are going to be bidding against one another to sit on that spot. There are several other factors including the benefits of being located near a main road or various community amenities that will impact the value of the plot.
You Can't Make New Land
Another aspect of value is the kind of neighborhood that you're paying for. It's hard to quantify how good a school system is or how valuable it is to be close to a hospital, but you can bet that homeowners and brokers are going to try.
Over time, the population grows, which is how suburbs were created. People wanted to be proximal to city centers while having enough space of their own.
Those homes or those plots which are located close to a commuter rail or a highway on-ramp may get more traffic than others. However, as the area grows and population density with that, those plots that were bought years before become more valuable.
There's only so much land and the homes that provide the combination of space and proximity are going to sit on the most valuable land.
Assessed Home Value Requires Local Knowledge
The best way to learn about assessed home value is to talk to a knowledgeable professional. Working with a custom home builder, you can create a home that will appreciate over time and find a plot of land that will facilitate that.
For all the details on how an appreciating home can and should be built, check out our guide.