Buyers Will Pay Premium for Garage Spaces
November 19, 2015
Extra garage space is coveted among home buyers. In a new analysis by realtor.com®, the site’s researchers examine median listing prices per square foot and all homes listed between Jan. 1 and Oct. 31 to determine how much more sellers are asking per parking spot.
Read more: No Parking, No Problem
While added spaces cause prices to rise, the jump with a three-car garage boasts a notable 11.45 percent increase over those with a single spot, according to the study. The majority of the homes – or about 64 percent -- have two-car garages but three-car homes tend to be larger and higher-end, which can increase the prices, Javier Vivas, realtor.com®’s economic researcher, told The Wall Street Journal.
Also, homes with a seven-car garage see a price jump, on average, of 31.42 percent more than a one-car garage home.
The share of luxury homes with big garages has been growing in demand in recent years among high-income households, says Stephen Melman, director of economic services for the National Association of Home Builders.
“Most people who purchase a home with six, seven, even more garage bays—they’re really very likely to be either collectors or auto hobbyists,” he says.
While homes with more garage space tend to be pricier, the study did find, however, that homes with two-car garages were 2.71 percent less expensive than homes that fit a single car. Vivas says it could be the mix of the listings studied, but he says single-car homes do tend to be smaller spaces, which tend to fetch a premium on a per-square-foot basis nationwide.
Here’s a closer look at the premium extra garage space can offer:
- 1 parking space: 0.00% (the premium over a one-car capacity)
- 2 parking spaces: -2.71%
- 3 parking spaces: 11.45%
- 4 parking spaces: 15.54%
- 5 parking spaces: 20.36%
- 6 parking spaces: 20.84%
- 7 parking spaces: 31.42%
- 8 parking spaces: 34.70%
- 9 parking spaces: 40.81%
- 10+ parking spaces: 33.80%
Source: “The Parking Premium: How Mega-Size Garages Affect Home Prices,” The Wall Street Journal (Nov. 12, 2015)
Updated: November 20, 2018