- Design elements associated with the “modern farmhouse” style fetch the biggest price premiums.
- Self-admitted fixer-uppers sell for almost 28% less than expected.
- Many higher-end, custom home features are associated with slower sales.
Many rustic-chic home design elements – of the kind often featured on popular home improvement TV shows – also frequently pop up in the online listing descriptions of homes that end up selling for more money than otherwise expected.
The apex of the trend? Over the past two years, homes described as “modern farmhouse”-style sold for about 10% more than expected, according to a Zillow analysis of listing language and the sales performance of thousands of homes nationwide in 2018 and 2019. Other features that could help boost proceeds for sellers include waterfall countertops (listings mentioning this feature sell for 9.4% more than would otherwise be expected), Moroccan tile (7.3%), Craftsman-style homes (6%) and exposed brick (6%).
And just like there are features and descriptors associated with higher sale prices than we’d otherwise expect, there are also elements and phrases associated with lower-than-expected sale prices. Perhaps unsurprisingly, sellers that ‘fess up to or otherwise describe their homes as maybe needing a little work should probably expect to fetch less for their home. Homes described as “fixer-uppers” yield a price discount of 27.8%; those needing some “TLC” end up selling at a 17.4% discount; and ones that mention “investment” potential go for about 10% less than expected. Bike racks, perhaps due to their frequency in small spaces or as a substitute for car parking, are associated with a 2.9% discount. And listings that mention a water slide could end up soaking sellers, netting about 1.6% below their expected sale prices.
Correlation, NOT Causation
Now, before we go any further, here’s a critical note: Adding these design features to a home, or just adding these words to a for-sale listing description, does NOT guarantee or definitively cause the ultimate sale price to increase (or fall) as much as observed. Rather, the most likely explanation for these results is that for-sale homes with these kinds of features in their descriptions may be of generally higher quality all around (or are at least perceived to be), in ways that are difficult to observe or quantify but which tend to lead to a higher final sale price. Essentially, the whole of a home can often amount to more than the sum of its explicitly advertised individual parts, and a home’s overall perception of “niceness” – and the price premium that comes with it – seems associated at least in part with the presence of these currently popular features.
But that doesn’t mean this information isn’t valuable to sellers determining how to market their homes and/or buyers determining the right offer – it certainly is!
From a buyer’s perspective, the features present in a home and/or the choices made to advertise said features in a listing description are indicators that a home may be perceived as cutting-edge and/or well-updated. And buyers actively seeking those traits in a home from the moment they move in may be willing to pay more for them when making an offer. But for bargain-hunting buyers or those with different tastes, the presence of such features may be a warning that they could end up overpaying for a prior renovation that doesn’t suit them or for features they don’t want/need.
From a seller’s perspective, there’s a clear takeaway: If you’ve got these features in your home, don’t hide them from buyers! And if your home doesn’t have these features, don’t pretend it does. But because we can’t prove causality behind these relationships, it remains unclear if that waterfall countertop will really move the sale price needle so dramatically – much less whether any gains would outweigh the costs of installing one and throwing out the old countertop.
Going…. Going… Gone
Beyond a higher price, many sellers are also interested in a faster sale. Homes with “smart sprinkler systems” sold a whopping 15.1 days faster than expected, given their Zestimate, location and other features. Other features common to quick-selling homes include rattan (12.8 days), drought-resistant landscaping (12 days), mid-century style homes (10.5 days) and board-and-batten designs (8.7 days). Sellers with mid-century homes (or at least, homes that can be reasonably marketed as such), could be sitting on a listing description sweet spot: In addition to selling quickly, homes described this way also fetch a respectable 4% sale premium.
The features commonly mentioned in slower-selling properties are generally higher-end finishes, suggesting they may appear exclusively in luxury or custom-designed homes, which tend to take longer to sell in general. The slowest-selling homes were ones that mentioned “wellness” – usually wellness rooms – which sold 24.5 days slower than expected; wine cellars (19.1 days), steam ovens (18.9 days), steam showers (15.7 days) and professional appliances (15.0 days).
Top 15 features for sale price premium:
|heated floor; radiant heat||4.9%|
Bottom 5 features for sale price premium:
Top 15 features for sale speed:
|smart sprinkler system||15.1|
|board and batten||8.7|
Bottom 5 features for sale speed:
Zillow analyzed closed home sales in the United States in 2018 and 2019 where Zillow could match the sale to the listing description and the home’s Zestimate in the month before listing. The listing descriptions were checked for whether they mentioned each feature in the analysis, and then log-linear regression was used to estimate a percentage price difference in one analysis, and days on market difference in the other, as a function of: each home’s pre-listing Zestimate, quadratics of age and square footage, local ZIP and MSA-level home value trends, the time of year listed, and the presence of each of these 170+ features in their listing descriptions. Results are only reported for features meeting two conditions: They appear in at least 100 listing descriptions of sold homes, and their estimated coefficient in the regression was statistically significant at the 5% level. Note: previous versions of this appearing on Zillow.com/research ran the regression separately for every feature; this version considers all simultaneously, so the effects are theoretically additive, and this addresses some of the omitted variable bias.