For many people, their home is their biggest asset. It could be one of the largest purchases you’ll make in your lifetime. For a variety of reasons - for tax purposes, a home equity loan, or retirement planning - you might want to understand how much your home is worth. Here’s how you can try to figure out just how much your home is worth in 2023.
Image: How Much Is My Home Worth?
What Determines Your Home's Value?
Many elements can affect your home’s value. The physical condition of your home is important, as is the size and number of bedrooms and bathrooms. Various parts of your home - the roof, the carpets, and the appliances - depreciate as they age. To maintain the value in your home, it’s important to continue making updates and improvements.
What happens in your neighborhood is also key. If you bought a home on the outskirts of town and now, in 2023, there’s a gourmet grocery store and a variety of upscale retailers nearby, your home's value has likely gone up. The presence of investors or urban homesteaders who have fixed up the surrounding homes can also contribute to an increase in your home's value.
Other factors include the sale prices of the homes around you (called comparables) and whether you’re in a good school district. The housing market will cause prices to increase or decrease. Your home should appreciate in value at the rate that the general economy is appreciating at.
How to Determine Your Home's Value
“It depends on the reason you want to know because that dictates who you’re going to speak to,” said Chantay Bridges, a real estate specialist in Los Angeles. You can get a good estimate of your home’s value from a realtor. Most brokers will give you a free valuation with the hope that when it comes time to sell, you’ll give them a call. They can come out, look at the interior of your home, and compare it to recent sales.
That kind of valuation is helpful if you’re wondering about the value of your home in terms of a future sale or estimating your general net worth. Alternatively, you can also look at the tax valuation of your home, which you might receive in tax communications from your locality or for which you may need to call your local tax office. However, the tax value of your home may not reflect the current market value.
For an official valuation, you’ll need to hire an appraiser. An appraiser will evaluate your property, inside and out, compare it to nearby homes and their recent sales prices, and give you an official written valuation. Expect to pay $300 to $500 for that kind of service.
Why Knowing Your Home's Value Is Important
Knowing your home’s worth in 2023 is simply practical. You want to know what your assets are, just like when you're doing any other business. It’s useful to know how much your home is worth if you’re considering selling it or if you’re thinking of tapping into home equity for renovations or other projects. It can also give you a feel for your overall net worth, though your home’s value will fluctuate over time.
In an official sense, a home appraisal can help you petition your bank to get private mortgage insurance removed from your mortgage payment if you feel your equity now exceeds 20% of the home’s value. It can also give you something to work with if you’re fighting your city’s tax evaluation of your home. You don't want to be overtaxed.
Conclusion
Your home is a huge part of your portfolio, and knowing how much it’s worth is just good operating procedure. You can determine its value through a realtor, tax assessor, or appraiser, depending on your purpose for asking. However, keep in mind that your home's value can and probably will change over time, so this is a number you should check regularly, especially considering the uncertainty of 2023's housing market.
