How much extra do people pay to have a waterfront home in Foster City, CA?

Aug. 24, 2010 - PRLog -- Have you ever wondered how much a waterfront location is worth to a homebuyer?  According to data analyzed by Robert Stuart of Professional Real Estate Brokerage, homebuyers are willing to spend nearly 10% more for a waterfront home than a non-waterfront home in Foster City.  “On average, waterfront homes receive nearly a ten percent premium as compared to non-waterfront homes in Foster City and the premium is likely to be even greater for a wide waterfront home and somewhat less for a channel or narrow waterfront home” according to Robert Stuart of Professional Real Estate Brokerage.

The idea behind the study came from a listing assignment Mr. Stuart recently accepted.  “The fixer-upper listing that I accepted was a channel waterfront home in Foster City and a similar non-waterfront home across the street had just closed escrow for $950,000.  I wanted to properly price my listing to account for the waterfront factor.”

The significance of this study is that waterfront homes can be realistically priced based upon actual sales statistics as opposed to myth, hearsay or feelings.  According to Mr. Stuart, this becomes extremely important when managing expectations of both homebuyers and home sellers.  In a competitive market sale, homebuyers and home sellers come together and a price is settled upon in a normal amount of time.  The real estate term for this is known as days on market.  Homes that sell in less than the average days on market tend to get a premium and those that take longer than average to sell tend to receive a discount.

A home seller that overvalues their home and lists it at too high of a price will likely not maximize their net sales proceed due to the increased time it will take to sell the home (days on market) and the increased carrying costs that result.  Carrying costs include mortgage payments, taxes and insurance while an additional cost to home sellers is the lost potential of homebuyers who purchase more attractively priced homes.  Conversely, a homebuyer that over or under estimates the value of the waterfront location will likely overpay for the home or spend too much time writing offers that are rejected.

While hosting a recent open home at a listing in Foster City, Mr. Stuart observed that some neighbors who owned waterfront homes placed the waterfront amenity at closer to 20% while neighbors who owned non-waterfront homes placed the waterfront amenity at just 5%.  “Homeowners whose homes were located on the water tended to over-value their waterfront location and view amenity by double while the nearby homeowners whose homes were not located on the water underestimated the value of waterfront property by half.”

Mr. Stuart based the study upon sold homes that were between  1,900 square feet and 3,000 square feet in size, had at least four bedrooms, were located in Foster City and closed escrow within the past year.

The average size of the non-waterfront home in the study was 2,428 square feet which sold for approximately $1,055,000 as compared to 2,451 square feet for the waterfront homes which sold for approximately $1,165,000.

Robert Stuart is an enthusiastic and experienced Realtor and broker with Professional Real Estate Brokerage.  He was formerly the Research Director for Franklin Properties, a wholly owned subsidiary of Franklin Resources which manages the Franklin-Templeton group of funds.  Please visit http://www.ProfessionalRealEstateBrokerage.com to learn more about Robert Stuart and to sign up for the opportunity to work exclusively with him.

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Experience and expertise in waterfront homes, REO transactions, short sales, probate sales, conservatorship sales, and 1031 exchanges for both residential and commercial properties especially in San Mateo and Santa Clara Counties as well as portions of Alameda County for buyers, sellers, lenders and asset managers.