Expert: Richard Taylor, AIA - 4/6/2009

Question
Richard,
We are in the process of buying a new house from a new home builder.  However, we have a dilemma.  We want to ensure that the house we buy has real value at the end of the day when we go to sell it, whether that is 5, 10 or 20 yrs from now.  (This question also applies to older homes people may consider buying, which one offers the best value long term).

So we are trying to decide the following:
1) Would we be better off buying a 2 story home with a full basement (unfinished) that is 8 ft tall.  The home has about 3400 sq ft and about 1600 sq ft in the basement (unfinished)
OR
2) Would we be better off buying a ranch model, putting in a structural basement (9 ft ceilings) and then finishing the basement.  Main floor would be 2600 sq ft, basement would be 1800 sq ft for a total of 4400 sq ft finished.

Option 3 would be to put in a structured basement (9 ft) in option 1, but still not finish the basement, additional cost $17k

Option 4 would be to add a walkout to either model, change the lot, adding about $17k, and yes, for option 1 we would need to add the structural basement first.

Really what we are asking is where is the greater value, in a 2 story home with an unfinished basement OR a ranch with a completely finished basement that gives more finished / living space but less total sq footage.

Thanks
PS:  We would greatly appreciate an answer before the end of the week.

Answer
Good morning Mr. Sewalk - thanks for your question!

Home value is a complex equation, affected by many factors - the "type" of house is only one of them.  Others include location, condition, size, and the desireability of the market area you're in.  And just to add to the confusion, each of those factors weighs differently depending on what the rest of the neighborhood is like.

For example, a ranch home in a neighborhood of all 2-story homes isn't going to be as desirable, and visa versa.  An empty-nester home in a neighborhood of 4-bedroom family homes will be undervalued in comparison.

But on to your question.  No one knows what type of house will be valued 20 years from now; neighborhoods and the surrounding areas can change dramatically in that much time.  But you can maximize the value of your home - relative to others - by building/buying quality materials and construction, and buying quality design.

"Oooh" and "aaah" features won't help you down the road; what will sell an older home is good design, good quality, and maintenance.

"Production" homes today (regardless of what the building associations will tell you) are not built to last, at least not like they were 80 years ago.  Sure they have a myriad of technical improvements, but we regularly encounter relatively new homes that are essentially "unremodelable" because of the poor quality of construction.  The early 20th Century homes we remodel are generally very structurally sound in comparison.  I think much of what passes for quality construction these days won't be around in 40 years, much less 80.  Buy quality!

What Realtors and builders call "curb appeal" is important too, but not necessarily in the way you might think.  It isn't important to be the most eye-catching house on the block; rather find the most handsome, comfortable, "home"-looking house.  Buyers might be impressed by a dramatic home, but no one want to live in a fishbowl.

Quality design means no "wasted space"; no uncomfortably-high vaulted ceilings; no useless parlors and dining rooms; bedrooms where the furniture actually fits; and decent-sized closets.  It means a house that's designed to really work for the family it's designed for, rather than designed to look impressive at an open house.  Think carefully through the house design and how you will live in it - be critical.

By now you've guessed the answer to your question already - the house that will hold its value best is the most like the others in the neighborhood, only a little bit better.  Choose that one from amongst your four options and you'll do just fine.

Finally - you probably know from the current market conditions that buying a home ONLY for future resale is a mistake...you can lose a lot that way.  The best bet is always to buy a home that fits you and family now and for the future - and stay in it as long as you can.  If you make a wonderful home that you love living in, someone else will love it too someday!

Hope this helps,

Richard Taylor, AIA
www.rtastudio.com
www.rtaplans.com