Since 2018, home listings that have included the description “modern farmhouse” have sold for about 10 percent more than anticipated, according to a new study by Zillow that analyzed correlation between language in listings and price premium or days on market.
Zillow gathered data by analyzing closed home sales in the U.S. in 2018 and 2019 where Zillow could match the home sale to the listing description and the property’s Zestimate (Zillow’s estimated market value for a home) the month before listing. Listing descriptions were then checked for whether they mentioned specific features and then Zillow used log-linear regression to estimate percentage price difference in one analysis and days on market difference in another analysis.
“Adding these design features to a home, or just adding these words to a for-sale listing description, does not guarantee or definitely cause the ultimate sale price to increase (or fall) as much as observed,” Jeff Tucker, Zillow economist, noted in Zillow’s report.
“Rather, the most likely explanation for these results is that for-sale homes with these kinds of features in their descriptions may be of generally higher quality all around (or are at least perceived to be), in ways that are difficult to observe or quantify but which tend to lead to a higher final sale price,” Tucker continued. “A home’s overall perception of ‘niceness’ — and the price premium that comes with it — seems associated at least in part with the presence of these currently popular features.”
In addition to the “modern farmhouse” premium, the following features mentioned in listings also correlated with a higher than anticipated sales price: waterfall countertops (an increase of 9.4 percent), Moroccan tile (an increase of 7.3 percent), Craftsman-style homes (an increase of 6 percent) and exposed brick (an increase of 6 percent).
Sellers who disclose their listing as a “fixer-upper,” however, should be cautious. Listings with this term mentioned earned 27.8 percent less than the anticipated selling price. Similarly, listings that mentioned needing “TLC” sold for 17.4 percent less than expected and those that said the home had “investment” potential sold for 10 percent less than anticipated.
Sellers more concerned with getting their home off the market quickly may want to tout their “smart sprinkler system” if they have one since listings with this feature mentioned sold 15.1 days more quickly than expected.
However, mentions of rattan (12.8 days quicker sell), drought-resistant landscaping (12 days quicker sell), mid-century style homes (10.5 days quicker sell) and board-and-batten designs (8.7 days quicker sell) also helped move homes off the market more quickly.
But, sellers who list homes with very high-end features should prepare for a longer period on market. Zillow’s study also noted that “features commonly mentioned in slower-selling properties are generally higher-end finishes, suggesting they may appear exclusively in luxury or custom-designed homes, which tend to take longer to sell in general.”
“From a seller’s perspective, there’s a clear takeaway,” Tucker said. “If you’ve got these features in your home, don’t hide them from buyers! And if your home doesn’t have these features, don’t pretend it does.”