Weekly Special | January 21, 2019

Home Size Impacts Appreciation Rates

All existing single-family home sales (condos, townhomes, and single-family detached homes) were bunched into five size groups between 1,000 and 3,499 square feet. Smaller and larger homes were omitted from this study.

Each year, I plotted the average home value (price per square foot) for each group of home sizes. Then, starting from the right size, I’ve added a dotted line moving backwards from right to left to determine where today’s value intersects with past values.

What we find is that homes sized between 2,500 and 2,999 square feet have recovered best (see yellow field above), while homes sized between 1,000 and 1,499 have recovered least (see blue field above).

This simple graph shows that the smaller homes purchased from 2005 through most of 2008 remain valued below their purchase point, while the larger 2,500-2,999 square foot homes today are valued lower than they were from 2006 through early 2007.

While new home sales were not included in this report, the sale of smaller new homes from 2005 through 2007 appear to have had a larger impact on smaller homes than they did on the larger ones.

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