Many Reasons for Pricing a Home
A first-time homebuyer in Encinitas recently asked why prices on homes differ so much when they are only a block away from each other. An excellent question that requires more than the short answer of “They are different homes!”
All real property (homes) have a unique feature called “heterogeneity” meaning that no two homes are alike even if built with the same floorplan, by the same builder, using the same materials. Below are some of the reasons for the differences:
- Location: Of course, this is the mantra of real estate, that location is key factor in its value. Is it by the ocean or by a factory?
- Topography: Each parcel of land has different land features. Is it level or on the ocean bluff?
- Proximity: Is it located in a residential area, a gated community, close to shopping, schools, freeway, etc?
- Improvements: What are the exterior landscape improvements? Does the interior have upgraded materials, a functional floorplan? Is it a one level home or three story?
- Environmental: Either hazardous surroundings, businesses or the “green” building materials. One decreases value and the other increases.
- Views: Any type of view will increase the value of a home with the most desirable for San Diego: an ocean or bay view!
It’s important, for both buyers and sellers, to understand why two homes that may be similar are priced differently when they are involved in a real estate transaction.