How has the pandemic affected buyers? Today I want to share a few fascinating shifts concerning home size, pools, and migration. If you’re local, have you been seeing this? If you’re not local, what’s happening in your area?
1) BUYERS WANT LARGER HOMES
If you’ve been cooped up for months it makes sense that you’re going to want a larger home, and that’s exactly what the stats show in the Sacramento region. Do you see that spike in home size on the right side of the graph over the past three months? For the first time ever the average monthly home size was over 2,000 square feet in the Sacramento region too (two months in a row).
The Takeaway: Be in tune with shifting buyer expectations so you price it right since larger homes may be more marketable right now.
2) POOLS ARE MORE POPULAR
Lots of buyers want a home with a pool. After all, if you’re going to quarantine somewhere you might as well have the ultimate backyard. Home sales with built-in pools are up 4.2% this year in the Sacramento region so far. This is something we could have guessed, but it’s good to see what the stats actually say rather than going with what we feel might be true.
The Takeaway: Homes with pools are in high demand. They are more marketable and they may be more valuable too.
3) FLOCKING TO PLACER & EL DORADO COUNTY
This is where it gets interesting, so bear with me. Noticeably larger homes have shown up in sales stats from June to August this year, but a big part of that comes down to buyers focusing more heavily on Placer County & El Dorado County. In fact, over the past three months compared to last year Placer County sales volume is up 16.8% and El Dorado County volume is up 31.5%. Why does this matter? If you didn’t know, monthly sales in these two counties are routinely 400+ square feet larger in size than Sacramento County (mostly due to having newer homes through the years that were built larger). This data does NOT include brand new homes currently being sold from builders – only MLS sales. Anyway, when we consider why the home size in the region has jumped so much lately, a huge reason looks to be buyers flocking to these two counties in search of more space.
The Takeaway: When we consider large price gains lately it’s important to recognize some of the hefty gains are because larger homes have been sold.
I put some of this post in a video in case that’s easier to digest. Enjoy.
a
I hope that was interesting or helpful. Thanks for being here.
Questions: In what ways have you seen buyers and sellers change because of the pandemic? I’d love to hear your take.
If you liked this post, subscribe by email (or RSS). Thanks for being here.
Timely post. Good stuff.
I might reach out for data if you don’t mind to go with something I plan to write.
Thanks so much Joe. I’m excited about this one and I’m glad to share where I can. If you end up needing something just send me and email and I’m sure I can figure something out.
Great information as usual Ryan. We are hearing the same things in our market as your data shows, I just have not run the stats to verify it. I guess it is time.
Thanks Gary. Keep me posted if you see anything interesting in the stats. I’ve been reading about the air quality in Portland lately. Hang in there. It’s been unreal here. I cannot wait to open our windows again…
Great article. Question Ryan , we are in the process of remodeling our home in East Sac from 1234 sqft to approx 1700, no pool. How this new trend could impact us if we want to sell in a couple years?
Thanks for your blog!
Hi Jorge. Great question. Congrats on the remodel also. It’s hard to say how the trend with pools and larger homes is going to unfold when we are not in a pandemic eventually. Will buyers be changed for good or will they settle back into what things were like before? I’ll be following the stats closely so we know. It’s good to remember buyer preferences are always changing though, so we can expect some changes in the future. No matter what, I wouldn’t be too concerned about not having a pool though, especially in East Sacramento. There just aren’t many pools in your neighborhood because lots tend to be smaller in size. Here is a post where my research showed only 12.3% of homes in East Sac had a pool too (https://sacramentoappraisalblog.com/2020/02/18/how-much-value-does-a-pool-really-add/). Keep in mind 4 out of 5 homes that sold this year in the region do NOT have a pool either, so 80% of the market essentially is happening without a pool. I hope that gives you a little comfort.
I would be interested in seeing what ADU’s and other accessory units are getting in the way of increases in this market. I’ve had several clients looking for homes with an in-law unit or something that they can use as a detached home office and I also have investors looking to add these into future projects.
Thanks Nathan. It does seem like there has been a greater appetite for ADUs. I have definitely been hearing this more and more and it’s something we’ll need to research. I don’t have any stats off the top of my head, but here is a study that Berkeley did. I don’t think this is what you are looking for exactly, but if you felt like pouring a cup of Joe and reading about ADUs, maybe this is your thing… 🙂 https://t.co/tV2R5uOoXa?amp=1 (PDF).
Completed an assignment in the Wilton, CA area. Custom home on acreage. A sales search revealed that 1980’s construction generally was between 2,000 to 3,500 sq.ft. Newer construction built between 2000 to 2007 showed GLAs 3,500 sq.ft. to 4,500 sq.ft. Having a well and septic established on a rural lot brings about $50,000 to $65,000 depending on slope and soil.
I bought a house with a pool. In the last 3 years I have put another $10,000 in removing root intrusion and concrete deck issues.
Back yard fencing and pool equipment; now that I know what to look for, are high on the list of deferred maintenance issues for many properties.
People are more inclined to spend on a new kitchen or bathroom. In the Urban areas of Sacramento I do find that privacy is a new commodity given the “Stay at Home” and that private spaces created by landscaping and good fences has a real appeal in the market. I am talking to contractors and several said minimum about $30 a linear foot for new privacy fencing.
Thank you so much David. I think you are 100% correct about privacy. It’s a big deal. People are feeling a lack of space right now in a number of ways, so having a sense of serenity can go a long way. The interesting part to me is privacy can show up due to location, layout, a killer backyard, the size of the home, etc… There are many factors for us to consider.
I’ve been told in the last that a standard pool adds 10-15K to a future home selling price. Is this still accurate these days?
Hi Michele. That’s a great question. While a pool might fall somewhere within that range in many cases, there is no standard adjustment. In other words, there is not a one-size fits all adjustment we can apply to every property. It would be great if that was the case, but it’s just not. For instance, appraiser colleagues in Beverly Hills tell me a pool could easily come in at $100K. In contrast a pool that needs to be filled in is probably a negative. Moreover, a pool in a neighborhood with the bulk of properties owned by investors is a different thing compared to a neighborhood where everyone has a pool. Thus we have to be cautious about always saying 10-15K because it could easily be more and it could be less.
Even in Sacramento we see a phenomenon where pools are more common at higher price points. Thus the higher you go in price the more buyers expect a pool to be present. This leads us to question value. Could value be different at higher prices if there is a higher expectation of a pool? Yep. Here is a post where I talk about that. https://sacramentoappraisalblog.com/2020/02/18/how-much-value-does-a-pool-really-add/
I hate to sound wishy-washy, but there really isn’t a 10-15K adjustment that always works.
Does that make sense?
You can use $26,000 from now on. Jim Walker says so. I sold two perfectly paired 3 bedroom 2 bath 1600 sq ft houses in Antelope, in July. Both multiple offer, completive sales
Pool house $410,000 less $9,000 BCCC Concession.
Almost the same house no pool $370,000 plus $5,000 deferred maintenance. |||| $401,000 – $375,000 = $26,000.
Ha. Thanks Jim. In truth we have to keep an eye on the value of pools because that typical $10,000 canned adjustment might not work well in all situations… 🙂