A recently updated online house price estimator and economic model from the National Association of Home Builders (NAHB) enables builders, developers, prospective homebuyers and homeowners to see the impact that various physical features might have on the price of a home.
According to the estimator, a third full bathroom is the one feature that can have the greatest impact on the value of a standard new single-family detached house in a Southern suburb, increasing the estimated price by about $43,000.
“In an economic environment where consumers are particularly price-and value-conscious, this is an important resource for assessing key features and characteristics that help determine housing prices,” said NAHB Chairman Bob Nielsen. “To get the most out of the estimator, those using it need to understand that the nation’s housing marketplace is actually comprised of thousands of local markets and submarkets, with their own dynamics.”
Looking broadly at the four principal Census regions of the country and the urban status of areas—central city, suburb or non-metro—the estimator finds a general tendency for house prices to be higher in the Northeast and West, as well as in central cities and suburbs. The price tends to be lowest for homes built outside of a metro area, although some regional variation exists regardless of urban status.
The model estimates that the standard new home will cost more than $500,000 if it’s built in a suburb of one of the large metro areas in California, but only about $155,000 if it is located outside of a metropolitan area in the Midwest region.
“Because the model uses data from the Census Bureau’s American Housing Survey, which contains somewhat limited geographical detail, the results show averages across a broad region rather than estimates for a particular house in a specific location,” said Paul Emrath, NAHB’s VP for survey and housing policy research. “The model captures the impact of various features in considerable detail, but no model or database can capture all the features that influence house prices. For that reason, a homeowner shouldn’t think that the addition of a certain feature will necessarily increase the cost of their home by the amount specified by the estimator.”
Looking at the physical features of the home, adding 500 sq. ft. of living space with no other changes increases the estimated price of that home by roughly $13,000. Adding another bedroom or miscellaneous room increases the estimated price by less than $10,000. However, eliminating the fireplace reduces the estimated price by about $24,000.
NAHB’s Single-Family Detached House Price Estimator can be found here.
