Depending on what state or country you live in, you might have a different opinion of what a great view is. For some, the ideal living quarters is a house or condo next to the water. For others, it’s stepping outside on your patio or porch and overlooking the forestry and world below. But no matter where you live, you can bet that the better the view, the more money you’ll have to pay to see it.
How much is a great view worth? Well the quick answer is that it depends on the location but we just might be able to help you quantify the different types of views and how much additional value they bring to a home. Whether you’re looking for a mountain view, ocean view or just an unobstructed open view, you first need to understand how much the home itself would sell for if there was no view at all.
The best way to evaluate a view would be to find two identical homes, one with a view and one without. See how much one home sells for vs. the other and contribute the difference to the view and the view alone. Unfortunately, finding homes like this are one-in-a-million, so the only other way would be to come up with qualifiers that add a certain percentage to a home’s value, based on the view. So let’s identify the different views available and then see just how much they can increase a home’s value. (Based on identical new homes being built in the same area valued at $500,000 each)
Ground Level, Unobstructed View (1% – 2.5%): This type of view means that you are located at the same level as many of the other houses around you but you have the advantage of having a view that allows you to see a large, non residential space, like the woods. These views are somewhat undesirable because they’re not jaw dropping but a good one can increase the value of your home by almost 3%. (New sale price might be $512,500)
Rooftop, Partially Obstructed View (3% – 5%): A view from above would suggest that you can almost see over all of the other houses around you but there may be a few houses that partially obstruct your view. Generally the higher you are, the more value a view can bring to your home, so a rooftop’s partially obstructed view can bring in an additional 5%. (New sale price might be $525,000)
Unobstructed View from Medium Elevation (6% – 8%): This category is primarily reserved for houses that reside on the top of a small hill. This particular view can see areas all around a house without any obstructions but aren’t high enough to see far beyond the houses small community. Having an open area will always command more money than if you can only see a few houses down, so this type of view has the potential to add 8% to the value of your home. (New sale price might be $540,000)
Unobstructed View from High Elevation (9% – 12%): Doing slightly better than the previous view, being able to see an entire city from the comfort of your own home can add significant value to it. The estimates you see are conservative depending on the city in which you reside as you can bet an Omaha unobstructed view will not be as valuable as a New York City one. Still, the value of the real estate can increase substantially. (New sale price might be $560,000)
Unobstructed Water View (15% – 80%): The biggest attraction of a view continues to be a large body of water. Whether it’s a lake, bay, river or ocean, the value of a property will certainly increase a considerable amount. This view needs to be unobstructed and the more rooms it can be seen from, the better. Depending on the body of water, the residence can increase in value up to 80%! This would mean that your $500,000 house has become a $900,000 house, simply because you see what two-thirds of the Earth is made of.
I currently live in a high-rise building with a view of Biscayne Bay on one side, meaning that I had to pay a much higher price to rent my apartment, than if I lived on the other side of this building. The difference in price for me was around 30%, so moderately priced if you will, compared to the estimates above. Pricing a view is certainly not an exact science but as more and more properties are constructed, the chances of finding a great view are becoming increasingly difficult. In just a few years, you may find the value of a great view to be double than what it is right now but only time will tell.
Real Estate has been anything but lucrative over the last few years and home prices have taken quite a tumble. Thousands of families have been forced out of their homes because they could not keep up with their mortgages and states like Florida (where I reside) are continuing to see falling prices. Some say now is the time to buy but whether or not you’re ready, make sure to educate yourself as much as you can to understand the potential a property has, good and bad.