A home generally appreciates in value between 3 and 4 percent each year, but not every home appreciates equally. While every market is different—and appreciation is naturally affected by factors homeowners can’t control— there are certain home features that create greater appreciation than others. Realtor.com did some research, analyzed millions of listings over the past five years and here’s what they found:
Size -Small homes are in high demand, especially by millennial first-time buyers. Homes smaller than 1,200 square feet appreciated an average of 7.5% a year for the past five years. Larger homes (more than 2,400 square feet) only rose by 3.8%.
Bedrooms – Two bedrooms appreciate 6.6% while five bedrooms appreciate just 4.3%.
Floor Plans – Open floor plans appreciate 7.4% a year—beating out other home features like a patio (6.8%), hardwood floors (5.7%), a fireplace (5.3%) and a finished basement (4.6%).
Style – Modern and contemporary architectural styles appreciate 7.7% a year. Bungalows and traditional homes appreciate at 6.5% and 5.6%, respectively.
Adjacency – Homes overlooking a park appreciate at 7.9% a year, hold value over a longer period of time and recover quickly from a downturn. Homes with mountain views appreciate 5.1% a year, while lake homes appreciate 4.9% annually