Single-Family Home Appreciation

If you’re thinking of purchasing a home, it’s important to become familiar with the factors that play a key role in increasing the home's value. You worked hard to earn that money, and buying the right home can provide a great return on your investment down the road if you decide to sell. Homeowners can take matters into their own hands with factors like renovations and upgrades, but we wanted to discuss the large-scale factors that have an impact on a home’s appreciation: location, economy, and real estate market.  

Home For Sale, 1957 | Source: State Archives of Florida

Location 

When we talk about home appreciation, it’s typically not just the physical structure itself that appreciates, it’s also the land that the home sits on. Although the world population has statistically been increasing, the amount of habitable land has not – therefore, due to high demand, the land will continue to increase in value. If that land is in a desirable location, the value will soar even higher. What makes a desirable location? Low crime rates, improving infrastructure, proximity to highly ranked schools and health systems, ease of access to shopping, etc.  

Economy 

Home appreciation can also depend on the status of the economy. If the economy is strong, more people will be employed, will make more money, and will have more money to spend. If individuals have more disposable income, they also have more room in their budget for a new home. This drives demand and creates home appreciation. Interest rates have a similar effect on home appreciation. When interest rates are low, it’s less expensive to borrow money to make bigger purchases (like a house), causing both demand and appreciation to increase.  

Real Estate Market 

The supply and demand aspect of the economy directly relates to the real estate market. Over the past few years, Southwest Florida has seen a shortage in the supply of single-family homes creating a shift to a “seller’s market.” In a seller's market, the appreciation of a home is positively impacted by low supply/high demand. In a “buyer’s market,” supply begins to catch up and even surpass demand pressuring the value of a home to stay the same over time.  

For more information about our single-family homes, click below to get in touch with a member of the Kanopy team!