Don’t follow the crowd. Be a leader. Do not conform to what everyone else is doing. Well, unless we’re talking about real estate. That’s when conformity becomes important.
What is the principle of conformity? According to the Real Estate Glossary, it’s the idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.
Case-in-point: This photo was taken by a blog reader of a neighborhood in Sacramento County that is less than ten years old. Houses are typical earth-tone colors with stucco siding and tile roofs, and yards are postage stamp lots. The owner of the house below installed a very elaborate set of stairs that is not found anywhere else in the neighborhood. There is truthfully nothing wrong with the design of the stairs at all, but the problem is they don’t fit with the community. When a feature like this stands out in a neighborhood, it can often feel like a sore thumb. One additional issue is that the stairs basically remove the front yard too, which could impact resale value.
Application of the Principle of Conformity: The stairs are not an extreme non-conformity example, but they do help us get conversation going about what types of improvements are best for a neighborhood. If you are considering improving your property, you may wish to consider updates that are consistent with the neighborhood already and enhance the overall image of the community. It’s good to be known for having the best house on the block, but maybe not so good to be known for having a really odd property feature. This means you probably shouldn’t lay down concrete over the entire front yard if its common to have sod for the neighborhood. You may wish to reconsider doubling the size of your house when everything else surrounding your property is tiny. You’ve really been wanting that bright hot pink color on the exterior, but the new paint probably won’t be a magnet for future buyers. You’ve always dreamed of living in the Bat Cave, but maybe stucco and tile ought to suffice for the time being. Basically, you don’t want to add features that harm your wallet or leave prospective buyers in the neighborhood thinking, “Hmm, I’d rather not live next door to that house.” When that happens, it certainly smells like a negative impact to market value.
What examples of non-conformity in real estate can you think of? Do you buy into the principle of conformity for real estate? How might non-conformity impact relationships with neighbors?
If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our company website or via Facebook.
Rachael Seda says
This house is just too much! Reminds me of a house in a friends neighborhood in high school that had a ridiculous fountain (especially for the neighborhood but really for anywhere) that took up the whole lawn of the house. The house itself looked nice but the fountain was so gaudy and unnecessary it was hard to look past it!
Thanks for a great post!
Ryan Lundquist says
That’s a great example, Rachael. Thanks so much. The funny thing about real estate is that we say “conform”, but in nearly all other areas of life we would never say that. It seems so non-PC, but that’s the way it is. I’ll be curious to hear stories and opinions from others too. Thanks again.
Hillside Appraisal says
I sure love the way it looks, but giving it any more than $1000 credit (when it likely cost $10k) is all an appraiser can do. I think that a buyer amenity appeal like this is a double edge sword. Personally I love the lack of lawnmowing, but people with kids have no where to play on this postage stamp size lot in the backyard. One city, Cupertino, CA is going through the “teardown old house– build new McMansion phase” of regeneration. The city is slowly transforming from a tired mid century modest city into very valuable high priced luxury homes community. As years pass, its clear that there is money to be made by picking up a low priced teardown and rebuilding. Great observation & topic. –Sonja
Ryan Lundquist says
Insightful comment, Sonja. There is definitely a place for people to update their properties with amenities they really like. They should definitely do so to a certain extent, but it’s a balancing act because you don’t want to spend $10K to reep $1K as in your example. It’s interesting to hear about Cupertino. There are quite a few McMansions in the East Sacramento area too, though I wouldn’t categorize it as a revitalization. East Sac is a well established community already – very desirable. Thanks Sonja.