Not all home ages are created equally, especially when it comes to investing in real estate. Each decade of homes has unique pros and cons, and average home values can vary greatly from one to the next.
BPInsights took a look at the data and evaluated median home values and amenities by decade, ranging from historic homes built before the 1940s to ultra-modern homes built after 2014. Here’s what we found.
key takeaways
- For the most part, the newer the home, the higher its average value.
- Homes built after 2014 have the highest prices, averaging $456,968.
- Older homes (those built before 1940) also have strong values ($333,852 average), as there is always a market for historic homes with unique features.
- Homes built “in the middle” (between 1940 and 1989) are the least valuable on average.
- The least valuable home decades are the 1970s ($292,832 average) and the 1940s ($283,547 average).
since 1990
Not surprisingly, the newest homes are the most valuable. They are built as per the current standards and require low maintenance overall, making them attractive to buyers.
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2014 and on
Homes built after 2014 have the highest average price. Buyers are willing to pay a premium for these homes as they are well designed, energy-efficient, in line with contemporary living standards, and they are cheapest to maintain.
Average Home Value: $456,968
1990 to 2013
Homes built between 1990 and 2013 also have strong valuations. The closer you are to 2013, the higher the median home value you can expect.
These homes tick the boxes that are important to buyers – think open floor plans, ample kitchen islands and large, updated bathrooms.
But they also have their flaws, namely their cookie cutter designs. Newer homes sit on smaller plots and are typically located in developments of dozens, if not identical homes.
Still, contemporary homes tend to perform well in terms of value because there’s always a market for them.
Average Home Value:
- 2010 to 2013: $419,236
- 2000s: $388,819
- 1990s: $357,631
1970s and 1980s
The median home value drops drastically when you start looking at homes built in the 1980s and 1970s.
Homes from the 1970s in particular lagged behind in value, with a median home value of only $292,832. In fact, the 1970s is one of the two worst performing decades when it comes to home values (the other being the 1940s).
There are a few reasons why 1970s homes are in low demand.
For one thing, homes from the 1970s are about 1,000 square feet smaller than modern homes, and typically have smaller master bathrooms—an unpopular feature for buyers, not to mention expensive upgrades for investors.
Homes built in the 1970s and 1980s also tend to have significant maintenance issues. Their plumbing is often subpar compared to modern standards. Many 70s homes used galvanized steel pipe with a life span of 20 to 50 years, while 80s homes used polybutylene pipe made of plastic—a material that tends to degrade. Was. The plumbing in these homes will need to be replaced if it hasn’t already been done.
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Many homes from this era also have electric systems that are not grounded, so they do not have the added shock protection, which is a safety feature that modern buyers have come to expect. Homes from the 1970s can also have foundation erosion issues, as most have slab-on-grade foundations.
Overall, homes from the 1970s and 1980s can require considerable work to be brought up to code, and architecturally, they are out of vogue with buyers, hence fetching low prices.
Average Home Value:
- 1980s: $311,720
- 1970s: $292,832
1940s to 1960s
Homes built in the 1940s, 1950s, and 1960s didn’t fare particularly well. Homes of this era were quickly rebuilt after World War II to accommodate the growing population. For this reason, many of these homes are small, simple, and prefabricated.
These medieval houses may lack proper insulation, as they were usually built with single-pane windows, and their electric and heating systems are usually very basic – assuming they haven’t been upgraded since construction. Has been done
They also lack the safety features today’s buyers have come to expect, such as grounded electric systems. And speaking of electric systems, homes from this era typically only had a few power outlets per room.
Asbestos and lead are also quite common in these homes, and any older galvanized steel plumbing pipes will need to be replaced as they only have a lifespan of up to 50 years. Also, these older homes may have deteriorating foundations that need to be fixed.
Homes from the 1940s, 1950s and 1960s can be expensive to upgrade, and they tend to be smaller, lacking the spacious open layouts today’s buyers are looking for.
Average Home Value:
- 1960s: $304,803
- 1950s: $299,638
- 1940s: $283,547
1939 and older
Next to new homes, historic homes command the most value, with the median home value coming in at $333,852.
Older homes are full of charm and unique details that buyers love. Of course, they require a lot of maintenance, but they are usually built to last, with hardwood or old-growth wood frames that can stand the test of time.
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Expect the bones of these homes to be good, but understand that they may need expensive upgrades to bring top dollar to the market.
Average Home Value: $333,852
conclusion
Now that we’ve looked at home values and characteristics by decade, we can come to some conclusions about which eras of homes have the best value and why.
- New constructions are the highest priced homes because they are up to modern building codes, they are cheaper to maintain, and they better meet the preferences of today’s buyers.
- The oldest homes (built before 1940) value well and remain desirable for their unique features and durable construction but can be expensive to fix up and maintain.
- Homes “in between” (1940 to 1989) are worth the least because they are usually so dated in need of expensive upgrades, and not up to today’s safety or living standards.
Of course, individual cities can have their own markets, so it’s always a good idea to look at decade-by-decade average home values for your city before making your next investment.
questions? notes? Which era of houses do you love the most and why?
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
