In a previous article about what Léo and Taylor can do for you as real estate consultants, we briefly mentioned the home evaluation process. This article will dive deeper into that process, and it will break down precisely what gives a home value in the Saskatchewan market.
Location, Location, Location
Homes generally hold a higher value in more convenient areas. A great example is comparing prices of downtown condos compared to ones in a typical suburb. The downtown location is a lot more convenient as it is closer to shopping centres, entertainment, recreation centres and employment opportunities. In Saskatchewan, the top 7 most expensive apartment/condo-style homes are within walking distance to downtown cores that hold values above $850,000. However, a home’s value isn’t exclusively based on its proximity to a downtown area. It can also be affected by its proximity to highways, ease of access to downtown centres, and local schools’ quality.
One of the most straightforward tools real estate consultants use is to analyze the housing market in a particular neighbourhood. They can determine what houses are selling and ones that aren’t based on the area and the price. Under normal circumstances, homes near each other are very similarly valued because of similar traits such as age and lot size. Using comparables can typically give a plus or minus $50,000-$75,000 price range estimate.
Home size and Usable Space
Square footage of a home is a key indicator of its value. After doing a quick search of the first 25 homes on the MLS market in Saskatoon, the average price per square foot in Adelaide Churchill was $290/square foot. Like the neighbourhood comparables, this ratio provides a baseline valuation for a home in the surrounding area. The price per square foot may be similar in other comparable regions, but the ratio will fluctuate depending on the specific neighbourhood. In addition to square footage, the home’s usable space matters when determining its value. Usable space is the square footage of the home minus any unlivable areas such as unfinished basements, garages and attics.
Age and condition
Newer homes are typically appraised at a higher value because the plumbing, electrical and structure itself are less prone to failure, and if they do, they’re most likely be covered by a warranty. That’s not to say older homes are valued less because they will break down, but instead, people tend to pay a premium for housing that is move-in-ready. For older homes, it’s important to pay attention to when the mechanical was upgraded, the roof was replaced and so on.
We are all well aware of the harsh weather conditions in Saskatchewan. From 30°C in the summer to -30°C in the winter, which means air conditioners and furnaces take their turns running nearly all year round. Having energy-efficient appliances can help save homeowners hundreds of dollars a year on their power bills. The newer the appliances, the better since they will be less prone to failure. Also, each year companies come out with more efficient models. A home’s R-value or the insulation rating can significantly impact value. The better the house is insulated, the more energy-efficient it will be. Extra insulation is ideal in the attic and walls, including the basement, as often they can be overlooked or insulated to the minimum standard. Other ways to increase the R-value are through window upgrades with extra panes and weather stripping and energy-efficient exterior doors.