Parks, trails may increase property value
Parks, trails may increase property value
Developers of master-planned communities strive to offer amenities, such as parks and trails, that reflect homeowner's lifestyles. Although these amenities are a popular addition to communities, there is mixed opinion on how these amenities affect home valuation.
"New master-planned communities are putting major emphasis on parks as one of the main amenities for that master-planned community," Jim Brooks CEO and owner of The Brooks Team and Realtor with Realty One Group said. "We still see there is more demand for parks over trails especially when new master-planned communities are so heavily populated by families with multiple young children."
Brooks estimates the value of a property in a community offering parks and trails can see a 2 percent to 4 percent increase in valuation.
"We do believe this is a popular amenity that is attractive to many different types of homebuyers," Brooks said. "We have also identified that increased value actually comes from the increased demand for parks and trails from recent and current homebuyers."
According to Jeff Payson, appraisal manager of the Clark County Assessors office it is difficult to determine what value trails and parks offer homeowners in regard to property value.
"If it can be determined that common element amenities do increase the value, each community would have to be analyzed separately to determine what that amount may be," Payson said. "Typically appraisers will try to find comparable properties within the same community as a basis of their valuation so they do not have to adjust for any differences.
"The Assessor's office does not value using typical appraisal methodologies," Payton added. "Nevada Statutes specifically dictate that our common element values be based on the cost approach and allocated on that basis to each of the community units."
Payson further added that the amenities in master-planned communities come at a cost to the homeowner so the increased value of the property is harder to determine.
"Developers of planned communities often build common elements within a new community to attract buyers who perceive a value in extra amenities; after the developer has sold out the community these amenities are left to be managed and maintained by the homeowners in the community typically through association fees and dues," Payson said. "It is difficult to ascertain in the market how much additional value is added."
Although difficult to determine if parks and trails do indeed increase a homeowner's property value, Brooks research of the area's real estate market reflects an intrinsic value to the homeowner.
"Our research shows the most value comes when parks and even trails are located within the community of the home," Brooks said. "We have found it creates overall value to all homes located within that neighborhood and becomes a private amenity for that community. If parks and trails are outside of the community, it is considered more of a public amenity so really no additional value for the homeowners in this specific community."
Other sources around the country tie the value of a property to amenities the surrounding area provides.
According to Ralph Bivin's Realty News Report, a study issued by Deal Sikes & Associates in Houston Texas stated: "properties located adjacent to one of Houston's premier parks typically received more than a 20 percent positive impact in value."
Matthew Deal, a principal of Deal Sikes & Associates, said in Bivin's report published this year properties located more than 1,000 feet from a park can receive a 5 percent to 50 percent increase in valuation.
Eliza Ann Underwood Hoffman of the Department of Recreation Management and Youth Leadership, BYU Master of Science, published a thesis entitled "Value of Bundled Recreation Amenities in Southern Arizona Communities: A Hedonic Pricing Approach." She stated in her thesis that the "positive relationship between the bundle of community parks, neighborhood parks and trails located within master-planned communities and home valuation, accounting for 17.45 percent of home value in this sample. In addition, the inclusion of family-recreation programming was found to contribute 6.82 percent of home value within master-planned communities. Underwood took a sample of 600 homes in master-planned communities and compared to 600 homes in comparable subdivisions.