Ever wonder what you might have to pay to live on the 20th floor instead of the first? I've done a bit of research that may help you the next time you're looking for a new place or selling your old home.
Several years ago when I was searching for a condo, I looked at a corner unit on the second floor of an eight story building. The condo was completely renovated with shiny new floors, stainless steel appliances and granite counter tops. It was perfect except for one thing — all the windows faced brick walls or the dumpsters in the parking lot. As luck would have it, the same unit was also for sale on the seventh floor. The place was rough around the edges, but the views of the city were breathtaking. We closed on those celestial views a month later. But, now I wonder. How much is a view really worth?
Of course, every situation is going to be different; there are no standard rules about the value of views, but sometimes it helps to have ballpark numbers so you have a starting point for research. Below are some figures to help guide you and a few quick tips about researching.
Condos and Homes
Try to find identical or extremely similar homes that were sold in the past 3 to 6 month period in your neighborhood. Then, calculate the difference in the amount each house sold for - be sure NOT to use the listing price. Do this with at least three properties and then take the average. Also, be aware that broker costs can be paid by the buyer or the seller, which can substantially affect the "perceived" value of a home.
Based on this method, you may find these general price increase ranges based on view over otherwise similar properties...
• Ground Level, Unobstructed View (1% - 2.5% increase)
• Rooftop or large porch, Partially Obstructed View (3% - 5% increase)
• Unobstructed View from Medium Elevation (6% - 8% increase)
• Unobstructed View from High Elevation (9% - 12% increase)
• Unobstructed Water View (15% - 80% increase)
Apartments are less regulated by long-term market factors, so the cost of a view can vary widely. It's best to research your geographical area and often a good place to start your reasearch is at websites for newly constructed apartment buildings. Sometimes the price of a unit will be listed by floor. In the DC area, I've found the cost of an apartment generally increases by approximately $20 for every successive floor.
Image: Apartment Therapy: Views of the City from New York Apartments from New York Social Diary