The Impact of Landscaping on Your Home's Value
I feel a bit callous reducing landscaping down to its monetary value. It can’t help but be an underestimation. However, our home and the property it sits on is typically the single largest investment any of us make. Surely the way we develop our property will have an impact on its’ value. But how much? And how should you landscape with your home’s property value in mind? While preparing for a presentation on exterior staging, I came across some interesting research that provides a few answers to these questions.
You have everything to be gained, or at least a percentage.
While a county or city’s property tax assessment might give us an idea of how much our home is worth, it’s the buyer who needs to convinced of our home’s value. They are the ones to whom we want to appeal. To help us see into the thoughts of the public, we’ll look at a survey given in seven states by a group of researchers from Michigan State University (Behe, et al.). They asked participants to estimate the value of the same home pictured with different landscaping which varied by sophistication of design, plant size and plant material variety. The home pictured with the most extensive landscaping in all aspects was valued an average across all states of 9% higher than the same home pictured without landscaping. Individual states reported increased values that ranged from 5-11%. Keep in mind that 9% average increase in perceived value as we look at a few other studies.
In the next study, the effect of improved curb appeal on the selling price of homes was explored by researchers at Texas A&M University (Elam and Stigarll). Elam and Stigarll defined curb appeal as features of the landscape and the exterior of the home. They developed a list of key features (List 1) and had professional evaluators use the list to score the curb appeal of 75 properties in a neighborhood.
List 1. List of exterior and landscape features by which homes in the study were scored.
Exterior:
- condition of paint
- paint color and coordination with other features (brick and roof shingles)
- type of windows and shutters
- whether the windows were appropriate for the house
- type of front door
- type of storm door
- type of porch supports
- type and condition offront garage door
- special positive features (ex. special roof feature)
- unusual negative feature (ex. large visible satellite dish)
Landscape:
- tree cover and quality
- grass quality
- volume and diversity of foundation plants
- plant maintenance
- concrete condition and size
- amount of soft and hardscapes
- design coordination
This score was used to sort the homes into four categories: excellent curb appeal (the top 25%), good curb appeal (the middle 50%), and poor curb appeal (the bottom 25%). The homes with excellent curb appeal sold for 16.6% more than those with poor curb appeal (Fig. 1). When they analyzed the data to isolate the effect landscaping had on the sale price they found homes with excellent landscaping sold for 10.2 % more than those with poor landscaping. Homes with excellent exterior features sold for 9.6% than those with poor exterior features, making the exterior of the home and landscaping of roughly equal value in improving curb appeal. Remember the last study? It concluded that improving the landscaping from lowest to most advanced level raised the perceived value of the home by 9%; which is close to this study’s finding that excellent landscaping increased the selling price of a home by 10.2% over those homes with poor landscaping.
Figure 1. Increase in sale prices of homes divided into groups based on curb appeal.
Yet another study conducted in Greeneville, South Carolina by Thomas Henry also examined the impact of landscaping on the selling price of homes. As the landscaping improved from average to good, the price increased by 4-5%. With further improvement in landscaping from good to excellent, the price rose another 6-7%. If a home moved from average to excellent, the total improvement would be 10-12%. Sound familiar? He also considered the effect of landscaping adjacent to the home for sale. I’m sure no one will be surprised to learn that poor adjacent landscaping reduces the gain a homeowner might achieve through landscaping their own property. However, if you are in the reverse situation – you have neighbors with delightful yards, but you just haven’t gotten to yours yet – you may have the most to gain. Not to mention happier neighbors, just don’t talk to mine, okay?
We’ve seen three studies showing similar increases in home value due to improved landscaping. Now let’s take this information and play a little game of pretend. Harry the hypothetical homeowner has a house valued at about $235,000 (the average home price in Blacksburg is $230,259 according to realtor.com). He lives in a nice neighborhood where most of the yards are well landscaped, but he has focused on other aspects of his life. (Oh, that sounds painfully familiar!) If we use 10% as the improvement in value landscaping could bring to his home, he could see an increase of $23,500, bringing his home value up to $258,500. That ought to give Harry some focus on his landscaping! However, I do have one question. As I understand it, there are certain price ceilings that potential homebuyers tend to stay within. If Harry’s current home value is close to one of those price ceilings, I would think that landscaping might increase his home’s selling price close to that ceiling but not beyond. If his home value is further away from a price ceiling, he may be more likely to realize the full fiscal benefit of improving his yard. Perhaps this is a case of not counting your chickens before asking your realtor.
What to do, what to do …
Remember the Michigan State study? They weren't just trying to look at the increase in perceived home value. They also wanted to know how different components of the pictured landscapes contributed to the increased home value. The three factors which varied in the pictures were: plant material variety, plant size and design sophistication. Design sophistication was the strongest contributor to increase in perceived value, accounting for 42% of the rise in value. Plant size was the next most important aspect of the landscape, contributing 36%, and plant material type contributed 22%. So what does design sophistication mean? And how big do the plants need to be to give the boost this study shows? A description of each level follows:
Design Sophistication
- foundation planting only
- foundation planting with one large, oblong island planting and one or two single specimen or shade trees in the lawn
- foundation planting with adjoining beds and two or three large island plantings, all incorporating curved bedlines.
Plant Material Types
- evergreen only
- evergreen and deciduous plants
- evergreen and deciduous plants with 20% of the visual area of the landscape beds planted in annual or perennial color
- evergreen and deciduous plants, 20% annual or perennial color, and the addition of a colored brick sidewalk entrance.
Plant Size
- smallest size commercially available
- a size approximately midway between smallest and largest commercially available
- largest size commercially available
All research results need to be applied with discretion. I certainly don't plan to make the results from the Michigan study the guiding recipe when designing for my clients (foundation planting, check; adjoining beds, check; 2-3 large island beds, check …). Nor do I think each homeowner should expect a 10% boost in their house value if they develop their property. Each property is unique, as is each client. If that weren’t the case, we could all simply use plans out of books and magazines. However, seeing research results which support significant and consistent gains in home value will, I hope, give homeowners confidence that improving their property should improve the value of their home. Quantifying that potential gain may help a homeowner develop a budget for their landscaping. Finally, knowing what influences a potential homebuyer’s perception of value may help set landscaping priorities. I think this research makes a good fiscal case for installing and maintaining a well-designed landscape. Maybe it also encourages homeowners to go ahead and install that landscape sooner rather than later. Not only will you have time to enjoy your lovely new landscape, but it will give time for the landscape to mature and possibly further bolster the value of your home.
(One caveat especially for those versed in the magical mystery of statistics - I thought the information in these studies was interesting and valuable to designers, landscapers and homeowners. However, I have not done any research myself and some of the statistical doings described in these studies flew over my head without ruffling a hair! With that in mind, I tried to present the results and recommendations most clearly reported by the authors of these studies. Anyone who is versed in this art/science is welcome to read the studies for themselves and if they would like to add any enlightening comments, I would be grateful. )
Sources
Behe , B., J. Hardy, S. Barton, J. Brooker, C. Fernandez, C. Hall, J. Hicks, R. Hinson, P. Knight, R. McNiel, T. Page, B. Rowe, C. Safley, and R. Schutzki. "Landscape Plant Material, Size, and Design Sophistication Increase Perceived Home Value." Journal of Environmental Horticulture. 23.3 (2005): 127-133. Web. 24 March 2014.
Elam, E. and A. Stigarll. "Landscape and House Appearance Impacts on the Price of Single-Family Houses." Journal of Environmental Horticulture. 30.4 (2012): 182-188. Web. 24 March 2014.
Henry, Mark S. "Landscape Quality and the Price of Single Family Houses: Further Evidence from Home Sales in Greenville, South Carolina." Journal of Environmental Horticulture. 17.1 (1999): 25-30. Web. 24 March 2014.
Niemiera, A.. "The Effect of Landscape Plants on Perceived Home Value." Virginia Cooperative Extention. Virginia Cooperative Extension, Virginia Tech and Virginia