Real estate faces an age old struggle – sellers want to get the most money possible for their home, while buyers are usually looking to feel like they scored a deal. It seems like it’s impossible for both parties to have their way. The best you can usually hope for? That everyone gets a fair deal. Especially in a busy real estate market, there are always multiple buyers and sellers at different price points. The trick is finding the perfect compromise.
Of course, a 1500 square foot, 3 bedroom, 2 bathroom home can vary wildly in its fair market price, even within the city of Philadelphia. So what are the factors that can affect price – low to high – so you know what to expect when buying or selling?
Location, location, location
Each quarter, a report on the state of real estate in Philadelphia is released. Inevitably, some neighborhoods have hotter markets than others. Whether a neighborhood is increasing – or already high – in property values depends on a lot of things. Many buyers in their 20s and 30s especially value walkability and a lot of neighborhood amenities. Families with small children might buy in a specific area with good school options. Others enjoy a sense of community, whether it’s that their friends and family live nearby, or people who share a cultural background, or just friendly residents who enjoy activities like planting community gardens or hosting block parties.
The more desirable the location, the higher (most likely) the prices of surrounding homes. The value of a home in that location will mostly be determined by comps – comparable sales – or what nearby homes have sold for recently.
Layout and Size
Many properties in Philadelphia aren’t huge by suburban standards, which is the trade off for living in a city community with sidewalks, retail, and plenty of neighbors. Still, a home’s layout and additional amenities can help make it more valuable, even if space is lacking. An open concept living room, dining room, and kitchen space is one of the most desired features for modern home buyers. Open space and high ceilings can also make even small spaces look large. Features like large outdoor spaces or rooftop decks, or finished basements (which aren’t included in the total square footage) can make the home more useful for a greater number of people. If you’re in a condo building, amenities like parking or bike storage, common rooms, and on-site gyms are features that might also attract buyers, since it gives you more “space,” even if it’s not strictly living space.
Aside from square footage, the number of rooms and how well they can be used can affect the value of a home. A 5 bedroom, 1 bathroom house with rooms that can only fit twins beds might not be as desirable as a home with 3 spacious bedrooms and 2 full baths. On the other hand, five generously sized bedrooms will be worth more than 3 if everything else is comparable.
Updated or original
There’s a difference between historic and… just kind of older. 18th century brick, 19th century Victorian, and 20th century craftsman homes have charm and desirable features for many buyers, especially of those homes have been well-maintained or the updates have been just enough to seamless incorporate modern living into the older structure.
The homes in between these extremes will tend to not be as valuable, possibly unless they have been heavily renovated. The solution for those who own older homes? Renovate your house to make it look and feel new – or be willing to wait a few more decades until it falls into historic status! For buyers, a home in this age range might be a coveted deal, even if you have to put some money into renovations – a home that may sell for less than a historic or new property, even if the same location.
Although kitchen and bathroom renovations can definitely increase a home’s value, be careful not to over-update your house. Marble counter tops in a neighborhood full of butcher block is likely not going to get you your investment back when you sell – and an over-updated home might actually be hurt when it comes to home value.
If you haven’t guessed, the biggest factor when it comes to a home’s value is what someone is willing to pay for it. For sellers, this might mean making sure your home appeals to the largest number of buyers possible by making sure it has many of today’s most popular features, like multiple bathrooms, master suites, and open concept layouts. For buyers, if you want less competition and to be more likely to get a better deal, stick with unique, less desirable homes in either cooler locations or without the updated features most people crave.
Please contact me to discuss your options. And remember, friends don’t let friends buy a home without Agent Lady!
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, click here.