In Colorado, homes with beautiful views of the outdoors command a hefty premium on the real estate market, but homes with stunning views of the city outside of Denver are actually less expensive.
According to a study commissioned by American Home Shield, a company that offers home warranties, homes with scenic views of nature list for an average price of $1.15 million in Colorado, which is second only to California at $1.17 million.
In comparison to all home listings, the panorama premium for nature is about 50% higher and is comparable to the 44.2 percent premium demanded nationally. The states with the highest markups are Wyoming (140%), Texas (121%), and Mississippi (119%), in that order.
The nature view premium is 55.3 percent in Denver and averages $1.12 million, while it is even higher in Colorado Springs at 56.9 percent and $770,191 respectively. The average list price of a home in Aurora with a view of the outdoors is $665,655, which is 46.3 percent more expensive.
“The higher a feature’s premium will be, the more in demand it is, and the less common it is. Despite this, Juan Carlos Sánchez Albarracin, a senior data analyst with NeoMan, which conducted the study using listings on Zillow, asserted that a house’s precise location and general features also play a significant role in its market price.
For instance, waterfront properties are more expensive than properties with views of the outdoors or the city. In dry states like Wyoming and Nevada, the premium for a waterfront home is 192 percent, compared to 78 percent nationwide. A waterfront home in Colorado costs 83 percent more than the national average for its list price.
Albarracin acknowledged that location isn’t the only factor in the premium. The quality of the building and the finishing touches, as well as the inclusion of extra features, are frequently upgraded by builders who secure a parcel with a great view, such as one that is high on a mountain or by a lake. Even though the study took square footage into account, those “extras” intended to draw in a more affluent buyer are a factor.
Great city views, which increased values in 21 states with data available but were discounted in 22 states, including Colorado, are still up for debate. Michigan had the largest discount for city views (55.3%), followed by Oklahoma, Nebraska, New Mexico, and Illinois.
The city view discount in Colorado was 8.5 percent, but there were significant variations. Listings describing beautiful urban views were 30.6 percent more expensive in Denver than they were in Aurora, though a small sample size may have skewed that result.
Does that imply that residents of Michigan and Oklahoma don’t care to look at their ugly cities? Or do city views no longer have value because they are so common?
“A city’s discount does not imply that it is unattractive. It just goes to show that houses without city views are generally more expensive, Albarracin said.
