Auto Trends Offer Insight Into Real Estate

The latest report on the best car resale values shows that consumers value luxury, maintenance, and curb appeal.

October 1, 2005

I believe it’s a good mental exercise to read a wide range of news and think about how the stories might apply to real estate. One recent report I read looks at why certain cars have higher resale values than others—providing insight into what types of features are valued most by consumers.

Although cars are much different than homes, the findings provide clues into housing preferences and home resale values. What makes one car sell for a higher resale price than another? According to Kelley Blue Book’s 2006 survey, luxury amenities, well-performed maintenance, and wide consumer appeal all come into play. Sound familiar?

Top-Ranked Cars

On Kelley Blue Book’s list of cars that hold the most resale value after five years, you’ll find pricey German performance cars and eco-friendly Japanese hybrids ranked high.

BMW and its offshoot MiniCooper tied for best resale brands, while the Honda Accord hybrid was rated as the top sedan model. The Porsche Cayenne topped the SUV category, and Infiniti M45 won for best luxury resale. Toyota Tacoma PreRunner topped the pickup segment, and Subaru Outback won in wagons. In the overcrowded minivan segment, the Honda Odyssey took top billing, while the Chevrolet Corvette Convertible won in the convertible category.

All of the winners “capture a magical combination of attractive design, superior build quality, and customer appeal that stand the test of time,” says Paul Johnson, president of Kelley Blue Book. The same could be said for homes that demand the highest resale prices.

Maintenance Matters

Cars don't have the long, useful life that homes do, but similar notions of quality, performance, and careful maintenance also apply to how home values improve over time. Homeowners who are serious about maintaining their properties tend to enjoy higher resale prices.

Just as car owners keep maintenance records, smart homesellers keep track of warranties, maintenance, and replacements. A home that was cherished by its previous owner is an important selling feature for buyers. Buyers are much less likely to pick over small details if they see that small and large problems have been handled or prevented by proper care and attention.

Consumer Appeal Sells

Another one of the most important factors in car resale values is wide consumer appeal, just as in homes. Car buyers want to be able to enjoy their purchases the moment after driving them off the lot, and homebuyers are no different—they want their properties to be move-in ready, including fresh paint and new carpet.

In fact, Kelly Blue Book strongly advises car buyers to choose a neutral color, such as silver, black, or white, that will appeal to the largest cross-section of future buyers.

Similarly, homesellers also are advised to improve curb appeal with crowd-pleasing paints, finishes, and trims. Interior colors should be neutral to appeal to the broadest number of homebuyers. While sellers may like Barney purple rooms for their kids, homebuyers who want to use that space as a home office might be horrified.

Luxurious Extras Improve Resale

To boost the resale value of a car, load it with as many luxurious extras as possible, from leather seats to navigation systems to anti-lock brakes and alloy wheels, suggests Kelly Blue Book.

This advice certainly applies to real estate. Older homes are routinely expected to be upgraded for modern tastes with wood floors, granite countertops, stainless appliances, and whatever else is in current fashion for high-end finishes.

Energy-saving features also score big with car buyers, as two gas-saving hybrids landed high on the Kelly Blue Book list. With heating bills expected to nearly double this winter, homebuyers also are paying attention to cutting energy costs.

Sellers with older homes should overcome perceptions of outdated energy efficiencies by getting their homes inspected for energy loss and taking steps to insulate attics, repair seals, and replace outdated appliances to attract energy cost-conscious buyers.

(c) Copyright 2005 Realty Times. Reprinted with permission.

Blanche Evans is a writer/editor and CEO of evansEmedia. Formerly, she was a senior editor with Realty Times, where she was named by REALTOR® Magazine as one of the most influential people in the real estate industry.

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