Love that home's view? See how much more you'll pay
The view of Lake Huron from a 1,800-square-foot home in Port Austin, Mich. Credit: AP/Jessica J. Trevino
A house with a fabulous view can be hard for a home buyer to resist. But seeing the mountains, water or city lights from the comfort of home comes at a price. The hazy part is figuring out what that added cost is — and whether it's worth it.
"Views are actually really difficult to quantify," says Andy Krause, principal data scientist at Greenfield Advisors, a real estate research company. "You know, some of that is in the eye of the beholder."
Assigning a dollar value can also be difficult, because not all views are equal or valuable and a view that's sought-after in one location may not be in another.
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 different 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. In this example, a home otherwise worth $500,000 might fetch $550,000 to $650,000.
- 30 percent to 50 percent: This time the same home as above, in the same location, has an unobstructed view. 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 or more: 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.
If having a view is a must, here are a couple of tips from the experts:
- Find out if the view is protected: Ask 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.
A view can be one of the most attractive aspects of a home. Knowing that you paid the right price for it can make the scenery that much more enjoyable.
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: A bit of detective work could have told them that commercial development was allowed.
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