Other than the home, a person’s vehicle (car-truck-SUV) is typically the second most valuable or costly asset of the household. Nationwide, a garage adds an average $23,211 to the value of home according to a just-released study by Redfin. That equates to a value gain in homes with garages of 12 percent (on average), with 85 percent of homes across the U.S. that sold in 2018 having a garage.
The value of a garage, however, varies significantly from one location to another. Once again I invoke my favorite Axiom, the TINSTAANREM statement, which is an acronym for There Is No Such Thing As A National Real Estate Market. The same is true regarding the contributory value of a garage. A garage is a parking space, which varies in value from one market to the next. In Boston, home to the first car condo (just a parking space), the value of a single space has exceeded $400,000 in recent times. In addition, the garage protects vehicle(s) from the elements, provides storage space, and can become more affordable living space if converted. For some people, the garage is a place for them to “Put their stuff.” Many businesses started in a garage including Mattel, Disney, Microsoft, Apple, Dell, Google, Amazon, Harley Davidson, and Hewlett-Packard.
To ascertain the contributory value of a garage, Refin analyzed single family housing sales across the country closed in 2018 in the markets they tracked. To be included there had to be:
- Minimum 1,500 single family sales in the respective market
- Minimum 500 home sales with and without garages
- Contributory data such as square feet, bathrooms, price per square foot, location (ZIP Code) drive times to local business district, month of listing, age, neighborhood density were included to isolate the variability of these factors
The following tables show the markets with the greatest and least contributory value of garages based on the Redfin Study.
The metrics from all 56 metros are included in the following table.
To read the entire Redfin study click https://www.redfin.com/blog/does-a-garage-add-value-to-a-home
While the expectation is that most higher-end homes will always have a garage, there are many markets where homes in high-value areas were built prior to the age of automobiles. Prime areas in Boston and Washington, D.C. often do not have garages. The first car condominium was built in Boston decades ago, and the resale market continues strong today.
Many of the most valuable contributions for garages are in colder climates. Living, however, in Houston with 100 degree, sunny, high-humidity days makes a garage a necessity – at least in my opinion. That said, many neighbors continue to park their cars outside in the summer heat. The lack or presence thereof of garage is an objective measurement, but the contributory value of a garage is subjective depending on the individual homeowner.