Local Ventura and Los Angeles Real Estate Market
Home values are up 13% year over year in Ventura and LA County. Many of the world’s largest funds, including THR California, Colony Capital, Blackstone, KKR, and Waypoint are acquiring nearly 1/3 of all homes on the open market to rent over the next 5-year period. This is extremely significant to homeowners in Ventura and Los Angeles counties, as real estate will likely continue to increase in value.
How to Value Your Home
For home appraisals in Ventura and Los Angeles County, you need to take into account many factors. Size, location, construction quality and curb appeal are some, but many other factors are always taken into consideration as well.
How Much Value does a Bedrooms Add?
From our experience bedrooms add greater value than just the actual size of the property. Going from 2 to 3 bedrooms is usually worth an additional 15-20% of value. Where as, 3 to 4 bedrooms is usually an increase of 3-5% of value. Finally 4 to 5 bedrooms is only maybe a 1-3% of value. We focus on this equation on valuing homes as much as the price per square foot.
How Much Value Do Bathrooms Add?
Adding a bathroom to a property is usually a very marketable decision. Although an additional bathroom on a property that has 3 bedrooms and 2 bathrooms may only add $5,000-$10,000 in value, adding a bathroom on a property that has 3 bedrooms and only 1 bath can make a significant difference. Sometimes close to $25,000. This is a convenience that buyers are most often willing to pay for.
Price Per Square Foot
We do also look at price per square foot to get a base value for a property. If there is a similar property in the area, including size, shape, and location, it is a good tool to use. However, when you are comparing your home against a property that has 200 (or say 10%) square ft less than yours, it is usually a good idea to look at the bigger picture. Are you willing to pay an extra 10% of value? Probably not, but maybe 5% more. But, if the property has an extra bedroom, it could add an additional $10,000 premium. But realistically, nobody who paid $300 per square foot for a 1,000 square foot property will pay $300/per square foot for 1,100 square feet, all else being equal. It will usually just be a $10,000 premium, rather than $30,000 (100sqft. *$300/sqft.).
How Much Value Does Having a Pool Add to Your Home?
With higher end homes, it is more likely that the buyer can afford the approximate $2000 annual cost of maintaining a pool, and will likely want the pool just to have it. Pools are worth an additional $15k in value for home under $400k, 15-25k for home 400-800k, and about $40k for homes over 800k. As such, the added value of a pool goes up as the price of the property goes up. The higher price the home, the closer the added value of a pool hits the cost of constructing one.
How To Value Your Home Against a Fully Rehabbed Property
Some homes in an area have a quality rehab job, and some are just lipstick on a pig. However, a home that hasn’t been touched in years, but has good bones, can cost a developer approximately $20/sqft. +/- to fully rehab. This includes hardwood floors, carpeting, granite counter tops, new cabinets, nice appliances, recessed lighting, new bathrooms, paint inside and out, new baseboard, doors, jams and cleaning. Often the HVAC system and or water heater is replaced. Comparing a home that has been rehabbed at 20/sq ft. to yours is difficult. I usually add or subtract 22-25$/sq ft. in comparing a fully rehabbed property to a non rehabbed property. Luxury rehab jobs are a little harder to value, as some can cost $40/sq ft. Those rehab jobs usually sell at a premium, but may never see a full return on their investment.
Location, Location, Location
Location always matters. Having a property on a cul-de-sac can add an additional 5% in value, while having a property on a flag-lot, a parcel behind another property, can deduct $10-50k in value (depending on the quality of the house). This applies to properties that backup to a busy street, railroad tracks a freeway or major artery. Depending on the street, a property that backs up to a busy street can sometimes be worth 2% less, while a property backing up to a freeway can be 7-12% less in value. Sometimes more.
Although this article takes into account many different variables in valuing a property, there are many more. Valuing a property is always a unique experience from one property to the next. Please also keep in mind that all the opinions expressed in this article are based upon our experience and are subjective.