Homes with a scenic view of nature carry a significant premium in their listing price in Colorado, but homes with great city views are actually discounted outside of Denver.
Homes with scenic views of nature list at an average price of $1.15 million in Colorado, which is second only to California at $1.17 million, according to a study commissioned by American Home Shield, which provides warranties on homes.
The panorama premium for nature versus all home listings runs about 50% higher and isn’t too far from the 44.2% premium commanded nationally. The biggest markups are in Wyoming, at 140%, followed by Texas at 121% and Mississippi at 119%.
In Denver, the nature view premium is 55.3% with the average price at $1.12 million, while in Colorado Springs it is even higher at 56.9% on an average price of $770,191. Aurora homes with nature views have an average list price of $665,655, which represents a premium of 46.3%.
“The more demand and the less abundant a feature is, the higher its premium will be. That being said, the exact location and overall characteristics of a house also play a key role in its market price,” said Juan Carlos Sánchez Albarracín, a senior data analyst with NeoMan, which conducted the study using listings on Zillow.
For example, waterfront homes come at a higher premium than those looking out over nature and those with great city views. The national premium for a waterfront home is 78%, but in dry states like Wyoming and Nevada, the premiums are 225% and 192%. In Colorado, a waterfront home comes with an 83% premium over the average list price.
Albarracin acknowledged the premium isn’t entirely about location. Builders who secure a parcel with great views, say up on the side of a mountain or on the shores of a lake, often upgrade the quality of construction and finishes and provide additional features. Although the study controlled for square footage, those “extras” designed to attract a more well-heeled buyer are part of the equation.
The verdict is still out on great city views, which boosted values in 21 states with available data but were discounted in 22 states, including Colorado. The biggest discount for urban views at 55.3% came in Michigan, followed by Oklahoma, Nebraska, New Mexico and Illinois.
Colorado’s city view discount came in at 8.5%, but there were wide variations. Listings describing scenic urban views in Denver came at a premium of 30.6%, while in Aurora those listings were discounted by 53.8%, although a small sample size may have distorted that.
Does that mean Michigan and Oklahoma are filled with unattractive cities that residents don’t care to look at? Or is it that city views are so common that they cease to add value?
“A discount doesn’t necessarily mean a city is unattractive. It just shows that the houses that do not have a view of the city are relatively more expensive,” Albarracín said.
