Many dreamy-eyed millennials are entering the housing market with their sights set on farmhouse and craftsman style homes, but they may have to pay a price for their sense of style. Entry-level homes described as “craftsman” or mentioning farmhouse style characteristics come at a premium, according to a study released Wednesday by RealEstate.com.
RealEstate.com, a Zillow Group brand focused on assisting first-time homebuyers, analyzed millions of descriptions of entry-level homes to determine which features cost homebuyers the most. Homes priced in the bottom third of the market are considered “entry-level.”
Making up 42 percent of homebuyers and 71 percent of first-time buyers, millennials are beginning to have “an increasingly notable impact on the market,” according to RealEstate.com.
In the entry-level sector, “craftsman” homes sold for 34 percent more than other comparable homes without the “craftsman” designation between 2016 and 2017.
Starter homes with “coffered ceilings” or “clawfoot tubs” came at a 29 percent premium, according to the analysis.
Other high-value features or descriptors included “mid-century,” “in-law,” “landscape/path/outdoor/deck lighting,” “exposed beam or ceiling,” “farmhouse sink,” and “wainscot.” All of these features came at a premium between 25 and 30 percent in the entry-level sector of the market.
Buyers in the top tier of the housing market also paid more for these features, but the premiums were lower on a percentage basis. “Craftsman” and “coffered ceilings” bumped prices for high-end homes up by 20 percent.
Homebuyers in the top tier prioritized “outdoor kitchens,” which came at a 28 percent premium, and “heated floor; radiant heat,” which cost buyers 25 percent more.
While style was clearly a priority among homebuyers shopping for lower-priced homes, energy efficiency may be the most coveted feature. In the low-priced home sector, solar panels came at the ultimate premium, selling for 40 percent more than homes without.
Homebuyers in the top tier paid just 13 percent more for solar panels.
“In today’s competitive housing market, understanding what homes may command a premium or attract multiple offers can be hugely beneficial to buyers,” said Jeremy Wacksman, Chief Marketing Officer at Zillow Group.
With nearly a quarter of homes selling for more than their asking price in 2017, according to research from Zillow, Wacksman urges home shoppers to “keep in mind which features or amenities matter most to you in a home.”
“While a farmhouse sink or butcher block counters may appeal to many millennials and first-time buyers, not everyone may want to pay the premium those features may command,” he continued.