Are homes being torn down in your neighborhood and replaced by massive houses? As land becomes more scarce, builders are seeking neighborhoods with large lots to accommodate massive new homes and buyers are paying top dollar for them.
Have you wondered how these new homes impact the value of the older homes in the neighborhood? Does it make sense to upgrade your current home or will it be torn down when you decide to sell?
The “renovate or move” question is one we’ve been helping homeowners answer for years, but the impact of tear downs and rebuilds adds another variable to neighborhood prices. We wondered if there was a way to calculate and predict a tipping point. A point when it no longer makes sense to upgrade because it will be sold to a builder.
One local Keller Williams agent told us she’s telling sellers “your property is worth less than an empty lot because the builder/flipper has the added expense of demolishing your home.” It is painful for sellers to hear.
We’ve noticed the first massive homes replacing older ones will sit a bit longer on the market, likely because of low appraisals for non-cash buyers or the tendency of buyers to forgo buying the most expensive home in a neighborhood for the least expensive home in a “better” more expensive neighborhood.
But if your neighborhood is transitioning and you own one of the older, well maintained homes, when do you stop thinking about upgrades, or even maintenance? There isn’t an easy answer – it involves some calculating for each neighborhood. If you’d like help with that calculation in your neighborhood, contact Dana at the Hollish Hill Group at 202-271-5301.