In Manhattan, a place that overlooks a green space will cost you a lot extra. In the countryside? Not as much, says Mauricio Rodriguez, a real estate expert who chairs the finance department at Texas Christian University’s Neeley School of Business.
PUTTING A PRICE ON IT
So how do you put a price on a variety of views? Krause, who builds automated valuation models that analyze home data, produced these estimates for what five types of views might add to a home’s price in Seattle:
5 percent to 10 percent: For a home on flat ground with an unobstructed view of an open space or a park, a seller could add 5 percent to 10 percent. In other words, if an identical home without a view is worth $500,000 elsewhere in Seattle, this view could boost the price to $525,000 or $550,000.
10 percent to 30 percent: A home partway up a hill with a partially obstructed water view over neighbors’ rooftops could increase the overall price by 10 percent to 30 percent. It depends on how much of your field of vision the view fills, both vertically and horizontally, Krause says. In this example, a home otherwise worth $500,000 might fetch $550,000 to $650,000.
30 percent to 50 percent: This time Krause considered the same home as above, in the same location, but with an unobstructed view. “You still have the neighbors above looking down into your house, but you have a nice water view,” he says. With this clearer view, the $500,000 home could sell for $650,000 to $750,000.
50 percent to 75 percent: Next, envision a home atop a hill with an unobstructed cityscape or open-space vista. To buy the $500,000 home in this location, a buyer might have to pay $725,000 to $875,000.
75 percent to 100 percent: Finally, imagine a house with a stunning, unobstructed view of a big lake or the ocean. This type of prized view can boost the value of a home worth $500,000 in an ordinary location to $1 million or more, Krause says.
Home with a view
If having a view is a must, here are a few tips from the experts:
Is the view protected: Frank Lucco, a residential real estate appraiser and consultant in Houston, once had clients with an expensive home who sued after a high-rise office tower went up across the street. The building disrupted their view and gave office workers a view of their formerly private backyard and pool. The lawsuit was dismissed, Lucco says; a bit of detective work could have told them that commercial development was allowed.
Before you place a bid on a home, Lucco suggests asking planning authorities what the zoning allows and if high-impact developments are planned nearby.
Look for diamonds in the rough: Bargain-hunters can occasionally find views for cheap because poor design – walls where a big window or a deck might go, for instance – blocks what should be a nice view.
“It may cost you $15,000 to $30,000 to do a very limited remodel that gives you a better angle, or higher vantage point, or a rooftop deck,” Krause says. That could be a deal compared with buying a home that already takes full advantage of its view. Lucco suggests inspecting the home’s deed for any restrictions limiting additions to the height. Pay careful attention to homeowner association rules, too.
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