What is a built-in pool worth? I get asked this question all the time. Well, let’s look at some fresh stats to help show why there isn’t a one-size-fits-all answer.
New Pool Stats: I pulled some stats and I’m excited to share these. If you aren’t local, does your market look similar regarding pools? Also, what other property features besides pools could we look at this way?
BIG POINTS:
– There are more pools at higher prices
– There are less pools at lower prices
– The percentage of pools differs greatly by location
– Some areas have tiny lots, so there are less pools
– The market expects a pool in some price ranges
THE HUGE VALUE POINT:
It’s easy to get stuck giving the same value adjustment every time we see a pool, but the market doesn’t pay the same amount for a pool everywhere because buyers have different expectations based on location and price range. So a pool probably isn’t worth anything in Antarctica while it’s worth way more in Arizona. As local stats show, in some areas like Granite Bay, buyers hands-down expect a pool to be present while in other places pools are extremely rare. Of course just because a pool is not common doesn’t mean it doesn’t add value. I’m just saying this gives us pause to consider the value of a pool might not be the same everywhere.
SORRY: I know I didn’t answer the question in my blog title, but that’s on my purpose. My goal is to give us something to think about rather than a bogus adjustment that isn’t going to apply everywhere. But if you do want to find out what a pool is worth, start comparing homes with and without pools to see if you can discern a price difference.
MARKET UPDATE VIDEO: Here’s a market update I did a few weeks ago. It’s about 40 minutes. Enjoy below (or here) if you wish.
SPEAKING GIGS THIS WEEK: On Friday I’m talking at the Gold County Women’s Council of Realtors. Then on Monday night I’m talking at the Real Estate Round Table (at a tavern).
I hope this was interesting or helpful.
Questions: What stands out to you about the data above? What is the most or least value you’ve ever seen for a built-in pool? Anything to add?
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We are at the mile high level here in Prescott, AZ; so in some ways the pool could be a liability due to very cold winter period from Dec to March. I typically weigh what I do based on value as well. Higher end giving more emphasis in buyer pool interested in pool amenity. I measure pool size and use cost analysis to weigh in on contributory value. Also whether interior/exterior. Less than 1% of sales having a pool; thus it is a blue moon between pool assignments.
Thanks Mark. I appreciate your take. Yeah, the higher end could be way different. Agreed.
You gave us a misleading title! Well that’s just dirty pool! (grin)
Haha. Well, that’s why I said sorry in my post. But my goal is to highlight this issue in an interesting way. I think it’s fascinating to unpack data like this. I’ve never seen it published before. It gives me pause and I hope it does for others too.
Nice post! I do see the same thing in the Cleveland Area. In most neighborhoods in which homes selling above $500K, pools are much more common. In some neighborhoods they add value. In some, there is no major value added. And, in some neighborhoods, especially in the lower price points, most buyers don’t want a pool, in which case, it can be a negative factor. The price to remove and fill-in a typical in-ground pool in my area is generally around $10,000-$15,000 +/-. So, having an in-ground pool in an area in which they are viewed as a detriment, can have a significant impact on market value. Thanks for a good reminder that one size doesn’t fit all when it comes to in-ground pools, or any other amenity for that matter.
Thank you Jamie. Interesting to hear most buyers wouldn’t want a pool. Dude, that’s no joke with a price like that. It’s higher than I thought it would be. I wonder why people view them as a detriment in some areas? Is that because of being an investor-neighborhood?
It is also time dependent. In mid 1990’s I appraised in different communities and several were negative to sales price based on cost to run /think CA utility costs. So when everyone is euphoric or semi-euphoric those % will probably increase, when a recession hits not such a good feature, except in Palm Springs, CA or Phoenix AZ. Combine that with shortage of inventory of pool homes in places that are pool friendly weather wise and you have potential for even high %. As Ryan does so well, check your immediate market area and compare those with and without. It won’t take that long and it will help the agent set their pricing for the home, not to mention make them look more professional in the eyes of their client. Plus it gives you a data base in case the appraiser doesn’t do their job. Thanks Ryan and YES that was dirty pool!!!
Thanks Brad. I appreciate your take here. I’m glad you mentioned utilities. I think of the severe drought we’ve had and the cost to fill pools. The environment could certainly play a factor and/or rules. The thing I observed regarding the drought was the high-end of the market still had mega green lawns wheres other areas had golden lawns. It was fascinating to watch because expectations for even lawn color were different based on location.
I live in Florida, I find that neighborhoods with lots of kids in good school districts (or just neighborhoods with lots of kids) will pay a higher price for a pool. Neighborhoods with older folks dont pay so much for a pool.
Thanks Dana. That’s a great point. It reminds me of the value of a pool in a 55+ community or HOA with a community pool. It’s important to know the market and weigh the expectations of that particular neighborhood rather than apply an appraiser adjustment every single time at $10,000. 🙂
In our area, I find the proportions of pools on the higher end properties similar. It is true that when more homes in the market have a feature, that feature tends to be worth more in relation to its cost. Some things that I’ve seen in pulling many sets of paired sales for homes with and without pools is that pools in disrepair rarely have value, but newer pools in very good condition usually do have value even on the lower priced homes. The hard part is when you pair a home with a pool and without a pool the ones with pools often have many other amenities, particularly large patios and outdoor living spaces, so it can be hard to know if the value is from the pool or other amenities that often come with the pool. One more thing I’ve observed is that if you have a home with a pool, try hard to sell in the hot part of the year because anecdotally it seems pools have less value in the winter.
This is outstanding Gary. I think you bring up solid points – particularly about a home with a pool also maybe having other upgrades. On a different level it’s like when a home has a weird addition. That probably isn’t the only odd element…. Anyway, thank you.
Ryan –
That is very cool to see the percentage of homes with pools in different areas – thanks.
I was just speaking with a agent in Lincoln Hills (Del Webb 55+ community) last week about pools in the neighborhood and she was saying that it’s common for a home to sell with a pool in Lincoln Hills but the buyers don’t want it and don’t plan on using it – they just want the house. So yeah, pools can be a tricky thing to value.
Thanks Gary. I was really stoked to run these numbers. I think there are other things we can do hear too to further unpack the data. Great point about Del Webb. It’s easy to project the trend from a different neighborhood on another, but the trend doesn’t always translate. I was just talking about soaking tubs as an example. Maybe that could be an asset in a 55+ community (still maybe though), but that’s going to be absolutely unwanted in a new modern build in Midtown…
Hey Ryan,
This is a little (maybe a lot) off-topic, but I hope for your opinion on something that has perplexed me and my buddies ( all non-real estate folks ). If you go to West Sac and follow Jefferson Blvd. south, you will find a sprawling development of gigantic houses packed together like sardines. The houses are Huh-uge, all two story and some even three story singly family structures. They are in no danger of winning a design contest as they are slab sided stucco houses where the only consideration seems to be to enclose as much of the lower atmosphere as possible. I will admit there are some countries and cultures where such a borg cube might be desirable for a large extended, multi-gen family. However, such an equation would have to figure in children. And since these houses have no yards to speak of, the multigen explanation seems precluded. Some of my friends say the places were built as investment vehicles ( and cheap ones since I can already see extensive cracks in the stucco.) I guess that planning commissions would green light such absurd structures in order to max out property tax on interior space. Bottom line is I am bewildered. Any idea why those places were built or what that design represents? Your old bud, ricardo
Hey Ricardo. It’s great to hear from you. I’m not sure exactly which units you’re talking about. What intersection? That might help me give thoughts. Otherwise I’ll just let some words flow below.
I will say high-density residential is all the rage because builders can effectively build more homes in a tight space. Anything boxy is really popular too because it feels more urban or “modern” so to speak. I don’t know if that’s what you’re referring to when talking about cubes or not, but boxy has been pretty popular in a number of developments (especially in The Bridge District).
Keep in mind lots of kids stay inside looking at their screens and they’re seeming to spend less time outside, so a huge backyard might not be totally necessary for families. But also keep in mind some developers really aren’t selling to families either. For instance, the developer of The Creamery has actually sold to a good number of Baby Boomers downsizing. One might expect for Millennials to eat up a product like that, but Boomers have been pulling the trigger for a more urban experience after the kids have moved out. I don’t know if the product you’re talking about is in the same category at all, but if people are buying it’s because the product is resonating. As far as investors it would be interesting to see how many owners on Tax Records have off-site addresses (which is usually a clue as to being rentals).
I always use pools in the cost vs. value discussion because I rarely see pools returning more money than they cost. In some areas, it could be said that pools generate a negative value because I have seen them filled in and it costs money do that. This could happen in an area where they are not very common and add to the cost of homeownership for those that might not be able to afford it. I like how you broke the number of pools down based on price range and location.
Thanks Tom. I appreciate your thoughts as always.