A house in a woodland area elevated upon a hill on the right, with an ADU and garage to the bottom left.

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Study: ADUs Can Add 35% to Home’s Value

November 4, 2021

Accessory dwelling units, also known as granny flats, in-law suites, or garage apartments, have been on the rise since the pandemic. ADUs are growing at a rate of 9% or 100,000 per year, according to a new analysis by Porch.com, a home improvement site.

Properties that have one are sought after. In the largest cities, a home with an ADU is priced 35% higher, on average, than a home without one, according to Porch.com.

 

 

ADUs have been touted as one answer to the housing affordability and inventory crisis. Homeowners with ADUs can earn extra income by turning them into rentals or as places to house their aging family members nearby.

ADUs are not cheap to build, however. The average cost of an ADU is $180,000, typically about $260 per square foot. That number could stretch much higher depending on where you live. For example, an ADU could cost anywhere between $149,000 and $400,000 in the San Francisco Bay Area, and in Austin, Texas, an ADU can cost $300,000, the study shows.

There are about 1.4 million homes with an ADU in the U.S. as of 2019. The states with the highest concentration of sales listings with ADUs are California, Florida, Texas, and Georgia.