For anyone contemplating the sale of their home, the picture in 2017 is rosy indeed. According to residential real estate advisory site, Zillow, the median home value in the United States rose 6.8 percent over the past year – and predicts another 2.7 percent increase next year.
An individual home's resale value, of course, is subject to many different factors, such as interest rates, the economic health of the country and overall consumer confidence. However, the basics of real estate still hold true: The location of the home (both the city and the neighborhood) and the quality of its construction are the main contributors to resale value.
When the population of an area is growing due to job growth, the demand for homes in that location increases. The law of “supply and demand,” first postulated in 1838, is still very much in effect. Quality of life issues, such as climate, recreation and natural beauty, are all part of this “location” equation. Likewise, the quality of the construction and the materials used greatly enhance the value of the home.
Brick Homes Have Greater Appreciation
For hundreds of years, brick construction has been a hedge against the short-term fluctuations of the real estate market. This has enabled most brick homeowners to realize an above-average return on their investment under almost any circumstance.
“There are many markets in the United States where all of these considerations – especially the supply of homes versus the demand – are at work.” said Britt Stokes, director of marketing for Acme Brick. “Dallas-Fort Worth, St. Louis, Birmingham, Denver and many other markets are seeing a robust growth in the resale value of existing homes.
“As we have noted in our whitepaper ‘The True Value of Brick,’ brick homes appreciate more over time than homes with wood or fiber-cement siding homes. Interestingly, brick homes also improve the appraised value of the neighborhoods and communities where they are built, enhancing the tax base. Plus, brick homes are 5 – 8 percent less expensive to insure because they are less likely to be damaged by fire or wind.”
Little or No Maintenance Makes Brick a Better Value
When showing an existing home, residential real-estate agents are typically asked about the cost of the home’s maintenance. Savvy homebuyers know that the mortgage payment is only part of the total cost of home ownership. Brick construction offers a distinct advantage in this area, and this too enhances its resale value.
“A wood sided home must be painted every five or six years,” Stokes noted. “Depending on where the home is located and how large it is, this can cost $8,000 – $10,000 each. Extended over the life of the mortgage, painting a wood sided home can total $30,000 or more. Brick, on the other hand, never needs to be painted. It will never fade and will retain its original hue for hundreds of years."
“There is also an energy efficiency factor to consider in calculating monthly maintenance expenses for a brick home versus a wooden or synthetic siding home,” noted Michael Earley of Acme Brick. “Brick slows the transfer of summer heat to the home’s interior, allowing more efficient air conditioning. And in the winter, the process works in reverse – helping keep the house uniformly warm and free of cold spots.”
Interior Brick Adds to the Character and Resale Value of the Home
More and more homeowners are adding interior and entertainment areas finished with brick, and this enhances the resale appeal of these homes. The “killer kitchens” found both inside and outside, adjacent to patio/pool areas, are extremely popular among larger custom homes.
“Brick allows almost unlimited creativity for homeowners who want to entertain in their kitchens or outdoor areas,” said Earley. “The timeless appearance of brick enhances every part of the home – from wine cellars to loft-style bathrooms – and, while these additions are difficult to quantify from a dollars and cents standpoint, they certainly add to the home’s character and resale value.”
Building with Brick = Better Return on Investment
A family builds a new home to accommodate current needs. But what if they outgrow the house and need to sell it in order to purchase a larger one? This is where resale value – and resale velocity - of that first home become very important.
“While the initial investment of brick construction might be a few hundred dollars greater than that of a wooden or fiber-cement siding home, the brick home begins to appreciate immediately,” said Stokes. “The analysis in the whitepaper noted above shows that comparably-sized homes, the brick home sees an immediate increase in value by about $4,000 over a home with wood or fiber-cement siding. As the years go by, this leads to a proportionally higher return on investment.
“For a family that is planning on staying in a home for six or seven years and then moving to a larger home, they want ALL of the appraisal value increase they can get in this short amount of time. Brick will deliver this increase in appraised value and homes constructed of wood and fiber-cement will not.
"Further, studies show that brick homes sell faster than comparably sized homes with less durable siding. That's crucial when you're planning to use the proceeds from the sale of current home to help finance the next one.”
If you are considering building a new home, let us show you the resale value of brick construction. Contact us for more information.