Tuesday, October 4, 2016

The Value of a View

“And… (as your broker whips open the shades), the view of the city is truly spectacular!”

If you are lucky, from time to time, you witness these intangible pieces of metropolitan beauty. The view of skyline or city scape, literally painted across your window or terrace, is a rarity. A piece of art so to speak that will never be the same. The view is always subject to passer-byers, the random taxi or Uber service, the changing weather, sunrises and sunsets, a boat in the harbor, shooting stars or even plane landing at LaGuardia. Always subject to spectator’s opinions, but at the end of the day the view is a valued asset to the collector, or in this case the buyer.
A view is subject to a number of different value factors such as the sight of major land marks, the free and unobstructed point of view, and the light that emanates into your living space. Methods such as the "Fuzzy Delphi" show that a pleasant view could considerably increase the price of a home, up to roughly 50%. Using the Fuzzy Delphi method, brokers would compare two similar properties located in the same neighborhood by their views. Properties with view of important monuments ( Freedom Tower and Empire State building included), sights of the sea and urban parks attract the highest premium, more than 40%. On the flip side, an unpleasant view; a brick wall, industrial installations, unpleasant neighboring building, power lines, metal bars, alleyways, uncontrolled disposal sites or trash receptacles could lead to a decrease in price of the homes by as much as 25%. [1]

This may sound like a simple math equation, nothing could be further from the truth. Most brokers find it difficult to find a comparable property with a similar view. In this case, the property becomes very similar to Art and that it's a one-of-a-kind and hence the intangible increasing the value exponentially

You'll be surprised by the following price variations attributed to views when comparing two similar properties [2]:

- Rooftop or large porch, Partially Obstructed View (3%-5% increase)
- Unobstructed View from Medium Elevation (6%-8% increase)
- Unobstructed View from High Elevation (9%-12% increase)
- Unobstructed Water View (15%-80% increase)

Manhattan's history of limited lateral space to build gave rise to the ingenuity of skyscraper buildings. Shopping for real estate in the city means looking beyond the physical metrics of living space, or the price per square foot (terra logic). The intangible characteristics of natural light and city views are no longer valued as just "added perks". They continued to be quantifiable assets baked into the value of the property.


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