The past few years have taught many Americans that property values often exist only on paper and in our minds. For decades, Americans' flight to the suburbs drove prices up on cul-de-sacs while urban properties languished. Larger homes enjoyed higher valuations from appraisers, who were responding to a market that rewarded square footage over efficiency. However, a new trend may make refinancing smaller properties more affordable.
A recent USA TODAY report profiled the growing number of baby boomers who have decided to "age in place." Instead of trading properties for ever-larger estates or spaces in retirement communities, they prefer to remain in the homes where they raised their families. Simple renovations can help homeowners accommodate family members with arthritis, impaired vision, or other health concerns, USA TODAY said.
In some regions, aging in place means downsizing to smaller, urban dwellings in close walking distance to shops and restaurants in familiar neighborhoods. According to Philadelphia real estate agent Mark Wade, some baby boomers have decided to trade suburban sprawl for urban condominiums. In neighborhoods popular with empty nesters, condos and low-maintenance townhomes may appreciate in price faster than similar properties in other parts of the same region, Wade said.
Whether you're investigating a refinance with a renovation project in mind or you simply want to take advantage of today's best mortgage rates, these three elements can earn you a higher appraisal based on market demand:
- Neighborhood. Access to nightlife, restaurants, and markets reduces reliance on automobiles, especially in regions where older drivers face nighttime driving restrictions.
- Energy efficiency. Older Americans require rooms with brighter lighting to eliminate shadows. Investing in LED lighting and compact fluorescent bulbs can add value while reducing energy costs.
- Accessibility. Industrial designers have developed new safety features and fixtures that make a home safe for older residents without resembling a hospital ward.
Even in parts of the country where real estate values have languished, a property that appeals to aging baby boomers can experience significant gains in valuation. Whether you plan to age in place yourself, or you want to find a way to add some extra value to your next appraisal, making your home attractive for older residents could help you score additional home equity.