Marketing is a great idea. Agents and appraisers alike need to be in the public eye as individuals on a regular basis, otherwise we are easily forgotten. Cautious marketing however; could be a better idea. We really do not want to impart information that could lead our audience astray, even if it does spark conversation and gets our name out to those whom we wish to reach.
This morning I read a post on social media, citing a 2017 Zillow study about the effects of paint color on property sales prices. The post provided exact prices where a color increased the “value” of a property based on this study. However, and this is a very big however, the source does not cite how exactly this study was conducted; whether it encompasses houses in the entire country; every price range conceivable; any variables related to overall condition of each property, or how these numbers were extracted with confidence from the market. While we want to provide meaningful content, we have to be careful about painting a picture of what something may, or may not be. A study that encompasses an entire nation would unlikely accurately encompass a smaller market segment in a smaller local community. Even though most people reading the post would understand that the data provided was national in scope, some might not. Perhaps a link to the article would be a wise approach, in particular if the information is offering advice on increases in sales price based on some improvement or another.
For instance, if we have two identical houses with identical remodeling in the $200,000 price range in Chelsea, will the house with a blue front door truly sell for $1,514 more than the house with the brown front door? What happens if this house is in the $1,000,000 price range in Ann Arbor? Will it truly sell for that same $1,514 premium? What about a 1900’s Farm House with a blue dining room, compared to a 1950’s contemporary; will they see the same effect? See the problem?
Searching for the source of this information, I believe it is the Zillow article linked below. The methodology is discussed in that article, but it does not account for location, price ranges, sizes, or condition and quality of the properties, and focuses on colors only. Although it states that the properties had similarity, this is based on photographs, not detail, and photographs do not always portray properties accurately. My question is whether you can pair identical or virtually identical properties with the one variable being a colored wall or door, and extract this type of precise sales price difference? Do homeowners typically paint walls white as addressed below, or when painting interior walls, is the trend towards some type of color? If homeowners/investors are not using white as the current trend, are we even comparing new paint to new paint? In my opinion, so much of the differences come down to the overall condition and levels of upgrades of the properties involved, not as much the paint colors. So much of what we see is local, not national, which is important to remember.
Is using this type of marketing tool wise given the precise numbers expressed, or is it better to simply say that currently, the color blue is popular for front doors, bathrooms and dining rooms, and point to the recent study? Is it also possible that in our local community, the color choices may not be popular?
The Zillow Paint Colors Analysis measured how different paint colors in various room types may affect the sale price of a home compared to its Zestimate. We analyzed more than 135,000 photos from listings around that country that sold between January 2010 and May 2018 to identify which paint colors were associated with a home selling for more or less than its Zestimate when compared to similar homes with white walls. The analysis controlled for other wall colors within each room type, square footage, home age, and ZIP code Zillow Home Value Index in the listing month. Price effects for different room-color combinations are estimates of the average premium or discount but may not reflect a causal difference in value compared to white walls.”
Appraisers try to measure market reaction to various elements of comparison, but a paint color choice would rarely result in any effect on the opinion of value, unless the paint color was so bold that it was a detractor from the value of the property. Even so, this type of subtle and easily cured element, would be exceedingly difficult to measure with any type of precision. It would be very dependent on the market segment and market activity. Most appraisers would factor in the cost to cure plus a small entrepreneurial profit for the buyer’s time and efforts involved in the cure. Or they would consider it under the overall condition of the property. It also depends on inventory and how the rest of the home shows, as there may be no penalty or benefit from it. If it was just one room, and the market was undersupplied, it might have no effect on the marketability of the house, but if there was ample supply and houses were taking 6-months to sell, and the house needed paint throughout, then there would be a different situation. It is unlikely an appraiser is going to measure to this granular a level, just as it is unlikely that a buyer is going to pay a precise $1,514 extra for that blue front door. At least in our local market.
If you need an opinion of value for your property in Washtenaw County, please contact me through email at firstname.lastname@example.org.