Add bath or garage? Website will calculate value

WASHINGTON — It’s one of housing’s age-old dilemmas: What features will increase the value of your property?

New-home buyers ask this question when deciding whether to opt for another full bath as opposed to, say, a garage or a fireplace. And existing homeowners ask the same thing when they are considering adding on, or other improvements.

There’s a new online tool to help determine how the value of a property changes in response to adding or subtracting about two dozen key features.

The Single-Family Detached Home Price Estimator, based on data culled from the Census Bureau’s 2003 American Housing Survey, is available on the National Assn. of Home Builders website at https://www.nahb.org . Click on Resources, then on Economic & Housing Data, then Housing’s Economic Impact, and finally on NAHB House Price Estimator.

The estimator is far from infallible. No statistical model can possibly capture all the features that affect prices, said Paul Emrath, the association economist who built it.

If, for example, a house with a fireplace has high-quality decorative trim, a feature not considered by the estimator, the model won’t pick it up.

Also, the amount of geographical detail is somewhat limited, so the model estimates the average price across a broad census region as opposed to the exact price of a particular house in a specific neighborhood.

Despite these drawbacks, the estimator is head and shoulders above anything else available to potential buyers, improvement-conscious owners, or even builders looking for a more exact way to price their offerings based on a plan’s particular features.

The model is much broader than a recently published study by two Florida State University professors on the effect various features had on the price of houses sold in a 21-county Philadelphia area market during an eight-year period.

It also is a more scientific, statistically valid tool than the annual cost versus value “guesstimate” published by Remodeler, a trade journal that polls local real estate professionals about the worth of a dozen or so high-end remodeling projects.

Perhaps the online estimator’s most interesting aspect is what happens when certain features in the house change.

“It turns out that a full bathroom has a greater impact on the price of a home that starts out with more bedrooms than baths,” said Emrath, who ran thousands of permutations with numerous variables when working the bugs out of his model.

Take a standard house — 2,000 square feet of living space with three bedrooms, two full baths, a living room with a fireplace, a dining room, a basement and two other miscellaneous rooms — in a Southern suburb.

Adding a miscellaneous room increases the value only marginally, from $176,415 to $177,169. And adding a family room doesn’t boost it much more, to $183,411. But adding a third full bath jumps the value to $203,204, a considerable difference.

The government’s housing survey identifies little more than the four principal census regions, so the model is not very specific regarding geographic location. But it is definitive enough to show what the same house will cost in rural and urban locations.

For instance, the standard house described above would cost just under $150,000 in a non-metro Midwestern location. But in one of the large California markets, the same place would run nearly $330,000.

It’s also possible to look at how the price of a standard house varies based on the year it was built. Let’s consider the standard house again, only this time in a Southern suburb, where roughly one-third of all U.S. single-family detached houses constructed after 1999 were built.

Controlling for the same size and features, a house built after 1999 would command a price tag of $176,415. But if it was erected in 1995, it would be worth only $170,880. And if it was put up during the ‘70s, the estimator values it at just $150,328.

Besides when the house was built and the number of bedrooms and baths, the estimator considers square footage and whether a home has a dining room, family room, miscellaneous rooms, fireplace, basement and garage.

It also analyzes the home’s location, such as on or near the water or in a gated community, and the community’s features and the house’s proximity to them.

Consumers and builders alike can play with the estimator, but there’s a caveat: You must have Microsoft Excel to make the model work. And your Web browser’s security setting must be adjusted to “low” or “medium” to allow its macros to run.