Entry-Level Homes with 'Farmhouse Sinks,' 'Wainscoting,' or 'Exposed Beams' Sell for Nearly 30 Percent More than Expected

SEATTLE, May 2, 2018 /PRNewswire/ -- Homebuyers – especially first-time buyers shopping for entry-level homes – can expect to pay a significant premium for houses with listings that tout popular farmhouse or craftsman-inspired features, according to a new report from RealEstate.com, a Zillow Group® brand tailored to helping first-time buyers find and budget for their first homeⁱ.

RealEstate.com® analyzed listing descriptions from millions of entry-level homes – defined as those priced within the bottom third of the market – to see how certain home features, amenities and design styles affected sale price.

Starter homes mentioning "coffered ceilings," "claw foot tubs" or "farmhouse sinks" in their listing descriptions saw some of the highest sale premiums of the keywords analyzed – selling for as much as 29 percent above expected values. Furthermore, homes described as "craftsman" performed better than any other design style analyzed. Even though Chip and Joanna Gaines' 'Fixer Upper' TV show may be over, their farmhouse chic style has certainly had an impact on home trends, especially among entry-level homes or first-time buyers.   

Energy efficient features also command high premiums among entry-level homes. Homes mentioning "solar panels" sell for as much as 40 percent more than expected, but mentions for higher-tier homes only saw a 13 percent boost.

Millennials are playing an increasingly larger role in the housing market. They make up 42 percent of all homebuyers today and 71 percent of first-time buyers, and their preferences – from location to home features – may have an increasingly notable impact on the marketⁱⁱ.

"In today's competitive housing market, understanding what homes may command a premium or attract multiple offers can be hugely beneficial to buyers," says Jeremy Wacksman, Zillow Group chief marketing officer. "However, it's important to keep in mind which features or amenities matter most to you in a home. While a farmhouse sink or butcher block counters may appeal to many millennials and first-time buyers, not everyone may want to pay the premium those features may command."  

Buying a home can feel like a moving target. With 24 percent of homes selling over list price, determining a realistic budget – and sticking to it – can be challengingⁱⁱⁱ. To help first-time buyers, RealEstate.com allows home shoppers to search for homes based on the home's "All-In Monthly Price," which includes estimates for costs such as mortgage, property tax and utilities, giving them a more accurate picture of the cost of homeownership.

About Zillow Group

Zillow Group (NASDAQ:Z) (NASDAQ:ZG) houses a portfolio of the largest real estate and home-related brands on mobile and the web, which focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with unparalleled data, inspiration and knowledge around homes, and connecting them with great real estate professionals. The Zillow Group portfolio of consumer brands includes real estate and rental marketplaces Zillow®, Trulia®, StreetEasy®, HotPads®, Naked Apartments®, RealEstate.com and Out East®. In addition, Zillow Group provides a comprehensive suite of marketing software and technology solutions to help real estate professionals maximize business opportunities and connect with millions of consumers. The Zillow Instant Offers™ marketplace provides homeowners with the opportunity to receive offers from buyers, including Zillow in some metropolitan areas. When Zillow buys a home, it will make necessary updates and list the home for resale on the open market. The company operates a number of business brands for real estate, rental and mortgage professionals, including Mortech®, dotloop®, Bridge Interactive® and New Home Feed®. The company is headquartered in Seattle.

Zillow, Mortech, Bridge Interactive, StreetEasy, HotPads, Out East and New Home Feed are registered trademarks of Zillow, Inc. Zillow Instant Offers is a trademark of Zillow, Inc. Trulia is a registered trademark of Trulia, LLC. dotloop is a registered trademark of DotLoop, LLC. Naked Apartments is a registered trademark of Naked Apartments, LLC.

ⁱ This analysis measured how listing keywords associated with different home features can impact the sale price of homes in the lower-third value tier compared to the upper-third value tier, holding constant other factors. We analyzed 1.9 million home sales between 2016 and 2017 to identify which home attributes found in listing descriptions are associated with a higher sale price and less time on market. Multiple regression was used to control for the age and size of the property, the year and quarter of sale, zip-code-level ZHVI at time of list (local market cost), and MSA-level ZHVI growth compared to national growth at time of list (local market hotness).

ⁱⁱ Data from Zillow Group Consumer Housing Trends Report 2017.

ⁱⁱⁱ According to a Zillow analysis.

SOURCE Zillow Group

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