Is there anyone else who's tired of hearing -- and doesn't necessarily buy the line -- that having the biggest house on the block can be a negative.

Having the biggest house is also NOT the same as OVER IMPROVING.

If the biggest -- or even the over improved house is the one I WANT -- then I'll buy it.

I WANT the house with all the space or improvements. And surely I'm not the only one.

No matter where you are, a given neighborhood will only bring a certain price at any given time (until appreciation and inflation break through the next price level.) But that's the case whether the house is the biggest or most improved or not.

Besides, its the biggest or most-improved house that BREAKS the price level open for the first time!

If the home you are planning to buy is over-improved for the neighborhood - may run into resale problems...
later.

Please explain. I don't see why.

This message has been edited. Last edited by: clbselhar,

If you want to buy the biggest house in the neighborhood then go for it -- but some neighborhoods, not all, will only support a certain price point.

We once lived in a neighborhood with all 50's ranches, roughly 1500-1800 square foot homes. A neighbor decided to build onto their 50's ranch and increased their square footage to 2400 sq ft. At the time (back in the 80's), those 50's ranches were only selling for between $70,000 and $80,000. When the neighbors that increased their square footage tried to sell their home for $110,000 it didn't fly. Our neighborhood would not support a home for over $100,000. So while it eventually sold for in the high 80's, they really didn't recoup the cost of the addition.

Recouping your cost -- and the size or improvements being a negative are two different things.

I think it's a made up issue. Someone will still buy the biggest or most improved house.

Common sense dictates don't put on a two story addition if you may sell in the next year if you want ALL of your money back.

(If you do list your house, it's not the size or improvement that's a negative affecting or delaying a sale -- YOU just won't recoup the investment right now. Again 2 different things)

As sellers are finding. Not selling -- and not selling for want you want are not the same.

On MHIWW today, a couple had put on a master bedroom suite in the 1980's. Their house was still one of the biggest if not the biggest, but something tells me they'll get their money out of it. And I'm willing to bet that house will have interested buyers it BECAUSE IT IS the biggest house, that has the additional space. Heck, people today want four bedrooms for two people.

As long as the change, whatever it is, doesn't DETRACT from value -- I don't think increasing the size or improvements if done with the long term in mind, are anything to even be concerned about.

Ah, yes, but that's the rub. Getting people today (not like our parents or the couple mentioned above who is still in the house after more than 20 years) to think long term.

In the example above the couple was older now and hadn't ever redone that master bath they put in in the 80's. All they'd have to do if they wanted to was re-do it now. But at least they have the SPACE -- and that's also what buyers want now. So so-much for being the biggest being a negative.

This message has been edited. Last edited by: clbselhar,

In the town I moved from there was a house that was added on to and became the biggest house in the neighborhood. Beautiful home but looked silly in its surroundings of small cape cods and modest little ranches. Average home prices of that neighborhood were between 300-400,000. The improved house was listed for 599,900. Would have been worth it anywhere else in town, not that neighborhood. It just sold almost 2 years later, for 390,000. People who would have bought it for over half a million don't want to live in that neighborhood. The people who wanted to move into that neighborhood couldn't afford that house. I can see that having the biggest and most desirable house in the neighborhood could be a problem for resale. Even if price wasn't a factor I think resale is more difficult if your house looks out of place.

We don't necessarily own the biggest house in the neighborhood, but we come close. We are also the nicest, maybe one other on our block compares. We are also a single-family home in a neighborhood that is probably around 60% duplexes with a four-plex down the street. Before we bought this house, it sat on the market for about 6 months and went through 3 or 4 price reductions. The initial listing price was about $20,000 over what it appraised for, so it was over priced. However, we got it for about $15,000 UNDER appraisal, so it was a good deal for us.

We know this house was hard to sell. We hope to stay here 10+ years, and I am hopeful that some of the surrounding properties will sell and be improved in that time -- several are still owned by original owners from when the neighborhood was built in the 70s. Some of the duplexes could easily be single-family homes.

But even if that doesn't happen, we are in a neighborhood near the university and close to very good elementary and high schools. All three schools were factors in our purchase. We also know that when the time to sell comes, we will have to price it right and be patient. After all, we finally found this place and loved it. When the time to sell comes, eventually the right people will come along.

This message has been edited. Last edited by: inchworm70,

Well, as a previous poster said - if the biggest/best house is priced significantly over the other homes in the neighborhood - I think it will be harder to sell. I see neighborhoods where they are tearing down the 1952 ranches and building big houses - and the couple that I have seen put up for sale have sat on the market for... well, actually, they're still on the market... If the price is the same as the little ones, NO PROBLEM, everyone would jump onto that deal. But, most people do want to recap their costs. I still shy away from going to the house that sticks out like a sore thumb (but I don't mean in a bad way) because it's so much bigger..... I do think many buyers feel the same way...

This topic immediately brought to mind a house in my old neighborhood in TX.
The couple had decided to be "the Jones'" so to speak.
She made all kind of improvements inside the house. Whatever was the latest and greatest she had.
Then they yard was over improved for the neighborhood.An inground pool was added even though they weren't going to use it. They were a middle aged couple whose kids had grown and left home.
She wanted more square footage so they took the two car garage and made a spacious master bathrom suite. Now the house had two master bathrooms suites, albeit one was nicer than the other but by no means was the first one a slouch.
They added a 3 car garage and a huge storage shed to the property.
Now they had much less yard than they started with.

This was in a neighborhood of 1400-2200 sq ft homes that was family oriented.

That house went up for sale 9 months out of every year for more than 5 years and never did sell. They always took it off the market around the holiday season.

They were trying to get $20-30000 more than every other house in the 1200 home subdivision.
She felt she was competing with the Master planned community next to our subdivision but that wasn't her competiotion.
I say 'her" because most of this was her idea.

We knew this couple very well and socialized with them often so it isn't that I didn't know the whole situation.
For the price point she was trying to get a buyer could go about a mile away and get everything she had and more for the same price and newer construction to boot.
Eventually they completely took it off the market and were just going to retire there. They may have sold it since I moved 4 years ago but if they did I haven't heard.

My point is this: if you want to over improve because it's what you want to live in and with and aren't concerned about resale value that's terrific. Go for it.
Just know that being over improved for the area wil not necessarily get you what you think it will.
If for no other reason than appraised value; nowadays lenders are looking hard and fast at loans and making sure they appraise right for the neighborhood.

This message has been edited. Last edited by: crazymaggiemay,

I too lived in a neighborhood of homes that were ranchers built in the late 40's and early 50's. About 4 homes down an interior designer & husband decided to gut their home & outfitted with Viking ranges, beautiful landscape, interior furnishings & faux painting likening a showroom. The homes in that area at the time ranged from $70's-100 grand. Because they expected much more in price, it took them forever & a day to sell the home. The problem was, our neighborhood backed up to new construction featuring the ammenities but in a newer home. Granted I believed our neighborhood homes were more solid but not all buyers take this into consideration. My current home doesn't compare to anything in a 10 mile radius because it's smaller with ammenities. Most homes are large with ammenities, however I'm not looking to ever sell.

Here's my take: I prefer to buy the worst-looking house and fix it up. Or, buy the smallest house in a well-kept neighborhood of big homes. This is what we just did.

Why? Because the smaller house, if improved to the standards of the larger homes, gains more percentage-wise in resale value by virtue of being surrounded by larger homes.

I call it "gelt by association."

It is known as the principle of regression. The nicest house in the neighbordhood value is adversely affected by being around houses of lessor value. When houses nearby are selling for less they are used as comparables and then adjusted for qualitative differences to come up for a sale price for the nicer home. These qualitative difference rarely come up to the price that the owners of the larger nicer house have put into the home. You are starting at a lower base and working up.

The opposite of this is the principle of progression where the worst house in the nicest neighborhood has its value pulled up by the surrounding houses. When comps are pulled they are starting at a higher base and working down and it results in a higher price.

That was us in our previous home, sort of. I can't tell you how glad we were to finally sell. Our house sold for the 2nd highest price ever in the neighborhood. We were extremely careful of not winding up in the same situation this time around. I really think we got lucky in selling when we did. We sold after living in the house for 6 years- any major improvements we wanted to make would not have paid off, even in the kitchen, unless we stayed in the house for many years.

"having the biggest house on the block can be a negative."

I can somewhat agree with that statement. I have to agree with flowerchyld. If you buy a 4000 sq ft two story grand house on a street that has 1500 sq ft cape cods or ranches then ya I can see how that could be a bad thing, you can't expect someone to pay the price you'd want for that house in that neighborhood. Now if the street had all say 3000 sq ft colonials and one house had an extra 1000 sq ft then no that statement wouldn't make any sense. It depends on the style of the rest of the houses on the street compared to the "biggest house". My last house was a colonial in the richest section of town, I used to take our dog for a walk every day and we'd walk a couple of miles, there was a few streets of ranches built in the 50's and someone went in and converted one of the ranches to a huge two story house they tried to sell it for significantly more then the ranches were selling for and it never sold, I moved from there 2 years ago and I just saw that same house come back up on the market. It sticks out like a sore thumb in that neighborhood. They are trying to sell the house for the same price the houses in my last development are selling for, it's not going to happen, obviously it hasn't in two years.

I think you're right beantown -- it's more about a house not fitting with the rest of the neighborhood that could be a problem for resale. My neighborhood has a wide variety of custom homes ranging from 2100 sq feet all the way up to 3600 sq feet, but because of the variety of homes, none of them sticks out as being out of place. If it was in a neighborhood like I lived in back in the 80's where 1500-1800 sq ft ranchers were the norm, a large house would be out of place and have a more difficult time selling.

Clbselhar, read Crazymaggiemay's post. I was going to go into trying to answer your question, but her post says all there needs to be said. After reading that, you shouldn't have any more questions/ confusions about this, lol.

I'm not confused. I just wish realtors on TV would be clear about what THEY mean, but these days on HGTV that's too much to ask.

When they say "biggest" they don't clarify what may be considered a blanket statement, and one that may not be correct at that. I think they give inexperienced buyers the wrong impression and I think that's misinformation.

In my suburban neighborhood of 3-4 BR houses (cape cods, ranchers and colonials), I'd say about 50 percent have additions.

Some of those additions are just family rooms, others are bedroom additions, some just sun rooms. Some ranchers have ground floor additions, a few even have 2nd story additions.

Some people have enclosed their garage for more space, some have done that and/or expanded from the inside by bumping out into the ground floor porch. Some of those are fully integrated expanded dining rooms other are just 'enclosed porches.'

Some people whose original house was already a 4 BR 2-car garage already -- then added an addition in back or on the side, AND enclosed the garages, and enclosed the front porch.

SO, do they have the biggest houses in the neighborhood of original 3 BR ranchers and 4 BR cape cods, which still DON"T have additions? YES.

Are those houses going to be up for sale longer than the non-addition house that hasn't been updated since it was built in 1964?

Depends on what each house is LISTED for. THAT is what gets lost.

The largest house at a good price may sell faster than the untouched house that sellers have priced unrealistically for the condition of the home.

clbselhar, I know what you are saying. The blanket generalization is not always correct.
When buying one for the long term, it may be a perfect fir for the buyer. Especially, if the house is priced right for the neighborhood.
Your last paragraph makes your point.

quote:

The largest house at a good price may sell faster than the untouched house that sellers have priced unrealistically for the condition of the home.

This message has been edited. Last edited by: Meischa,