Bigger isn’t necessarily better when it comes to appreciation. In fact, a new study shows that smaller homes likely will offer a bigger percentage return on a home shopper’s investment. A new study conducted by NerdWallet culled three years of listing data from realtor.com® of 20 of the largest U.S. metro areas and shows that smaller homes, in general, appreciate at a faster rate than larger homes. Markets can vary greatly, however. In 17 of the 20 metro areas analyzed, listing prices of the smallest 25 percent homes rose faster when calculated as a percentage, according to NerdWallet. The median annual growth rate for the smallest quartile of homes was 8.9 percent from 2013 to 2016, the study showed. The second smallest group of homes had the second-fastest growth rate: a median annual growth of 7.4 percent. Still, while the smallest homes appreciate fastest when viewed as a percentage, larger homes appreciate fastest by absolute dollar amount, the study showed. Richard K. Green, a professor and chair of the Lusk Center for Real Estate at the University of Southern California, says one reason smaller homes are likely appreciating faster is due to less inventory of starter homes available. Buyer demand for starter, smaller homes remains high, however. Source: NerdWallet
Darius Jenkins (NMLS# 187399)
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