With market values in Tacoma’s North End on the rise, we’re often asked by our clients to “keep our eyes open” for a house exactly like theirs but with a water view. The implication being that if they found a view home that was as nice as their current residence, they would want to buy it. The follow-up question from them is inevitably, “how much more would that cost?” Well, that isn’t always an easy question to answer. When showing homes to buyers that are specifically interested in purchasing a view property, it becomes readily apparent that not all views are created equal. I did some digging and found an article published in 2011 by the Texas Association of Appraisal Districts that mirrors my experience with the Tacoma housing market. It states the following:
Market studies support the premise [that a view adds value], with one study concluding that . . . “in addition to square footage and lot size, view is the most significant determinant of home value.” A panoramic view (breadth and/or depth in aspect) tends to command the ultimate premium, . . . a near view of a prized view object is preferred over a far view, while the ability to see a far distance is prized over a vista that is foreshortened. Other things being equal, an obstructed (or keyhole) view will draw a lesser premium. A view only visible from the upper floor of a single family residence likely draws a lesser premium. A damaged view (a mountain view marred by overhead power lines or a junkyard in the foreground) will likely invoke a lesser premium. View orientation can influence value. It is said that the view from the “back” of a residence (where family rooms and patios are often located) is significant, while the view from the front door is less significant.
A study of 1984 – 1993 data from Bellingham, Washington found that a view added a 25.9% premium to home value. When the views were differentiated, however, the study findings were more informative: poor partial ocean view (8% premium), good partial ocean view (29% premium), unobstructed ocean view (59% premium), and water frontage (127% premium). (See the full study here)
I was curious to see if view homes in North Tacoma garnered this same price premium so I pulled recent sales data specific to the North End, comparing similar houses in the same neighborhood with and without views to determine pricing differentials. The exercise is a challenging one, but I was able to find three pairs of properties of the same size and condition but differing in view (see below for side-by-side comparisons). The view homes sold for 51%, 40% and 55% more than their non-view comparables for an average premium of 49%. My sample size is obviously too small to draw definitive conclusions, but I think the results do support the findings of the study discussed above. The results also echo what I always tell our real estate clients when they ask me “how much more for a view property?”… expect to pay at least 50% more for a great view property and be prepared to wait. Patience is everything.
|7213 N. 25th Street
5 bedroom, 2.5 bath, 3,032SF
Built in 1970, sold for $425,000 on 9/20/2013
|1818 Skyline Drive
5 bedroom, 2.75 bath, 3,000 SF
Built in 1965, sold for $282,000 on 12/13/2013
|3009 N. 31st Street
3 bedroom, 1.5 bath, 2,006 SF
Built in 1906, sold for $462,000 on 8/28/2013
View: unobstructed water view from rear
|2210 N. 29th Street
3 bedroom, 2 bath, 1,820 SF
Built in 1904, sold for $330,000 on 10/23/2013
|3712 N. 39th Street
2 bedroom, 1.75 bath, 1,606 SF
Built in 1916, sold for $460,000 on 07/31/2013
|3905 N. 35th Street
3 bedroom, 1 bath, 1,358 SF
Built in 1922, sold for $297,000 on 8/1/2013
Have you ever wondered about the multicolored contemporary building next door to the Museum of Glass on Dock Street? Well, wonder no more. The building is called Thea’s Landing, which makes sense given its location on the historic Thea Foss Waterway. The mixed use complex was built in 2002 and offers spectacular views of downtown Tacoma, Mt. Rainier and the Port. The building features shops and restaurants at street level, 189 apartments for lease and 46 privately owned loft style penthouse units. Restaurants currently include The Social Bar and Grill on the water side of the building and Paesan Kitchen and Bar on the street side. Penthouse prices range from $150,000 to $350,000, depending on unit size and view, and many have large balconies.
Building amenities include two separate fitness rooms (one for cardio and one for weights), a club room with a full kitchen, a library/media room, a business center, storage units (available for rent) and secure covered parking. Thea’s Landing offers easy access to the Dock Street Marina, the Glass Museum, downtown Tacoma and UW Tacoma via the Chihuly Bridge of Glass.
We were excited to hear that the same Tacoma-based group that developed Thea’s Landing has plans for a new mixed use project called The Henry next door to the Albers Mill Lofts on Dock Street. The new seven-story building will include 165 rental apartments and 12,000 square feet of commercial space. The building is to be designed by local architectural firm BCRA. Construction is slated to begin in September. If the project comes to fruition, it’ll be a very positive sign of economic recovery in downtown Tacoma.