Avrahom Orloff On What Determines a Home’s Value: Understanding the Core Influencers of Residential Property Worth

Determining the value of a home is both a science and an art, blending quantifiable data with subjective assessments. Homeowners, buyers, real estate agents, and lenders all rely on accurate property valuations for critical decisions—buying, selling, refinancing, or investing. However, many people don’t fully understand what actually drives a home’s market value. From location to condition, and from market demand to home upgrades, there are multiple elements that work together to establish what a home is truly worth.

Avrahom Orloff breaks down the key components that influence property value, explains the appraisal process, and discusses why understanding these factors is essential for both buyers and sellers in today’s housing market.

1. Location, Location, Location

Avrahom Orloff understands that perhaps the most repeated mantra in real estate, “location” remains one of the most critical factors in determining a home’s value. But what exactly makes a location desirable?

Several components of a property’s location impact its value:

• Proximity to Amenities: Homes near schools, public transportation, shopping centers, and recreational areas typically command higher prices.
• School District Quality: A well-rated school district can significantly increase a home’s appeal to families, thereby boosting its value.
• Neighborhood Trends: The overall status of a neighborhood—its safety, cleanliness, and future development plans—can elevate or diminish a home’s worth.
• Employment Opportunities: Cities or towns with growing job markets and corporate presence often experience higher property values due to increased demand.
• Scenic Views and Environmental Factors: Homes with views of lakes, mountains, or parks tend to be more valuable. On the flip side, proximity to environmental hazards like flood zones or noisy highways can decrease value.

Location is permanent. Unlike other factors such as upgrades or repairs, it’s something that homeowners can’t change—making it a foundational component of a home’s valuation.

2. Size and Usable Space

Size matters in real estate, but it’s not just about total square footage—it’s about usable space. Avrahom Orloff explains that larger homes generally command higher prices, especially when the space includes highly functional rooms like bedrooms, bathrooms, and kitchens.

Key aspects of size and space include:

• Total Square Footage: This is one of the primary numbers used in comparative valuations. All else being equal, a home with more livable space is usually worth more.
• Lot Size: Larger lots offer more outdoor space, which can be a huge draw for families or those interested in gardening or expansions.
• Layout Efficiency: A poorly designed 2,000-square-foot home might be less valuable than a well-designed 1,500-square-foot one. Buyers look for functional flow and space utility.

Garages, attics, and basements—especially when finished—also play into the perceived value of a home.

3. Property Condition and Age

A home’s condition heavily influences its market value. Even older homes can maintain or increase in value if they are well-maintained and have up-to-date systems.

Avrahom Orloff shares some factors affecting the condition that include:

• Structural Integrity: Foundations, roofs, and framing must be sound. Any signs of damage can lower a property’s value significantly.
• Mechanical Systems: Updated plumbing, heating, ventilation, air conditioning, and electrical systems are key selling points.
• Cosmetic Appeal: Fresh paint, modern fixtures, and well-kept landscaping can enhance curb appeal and increase perceived value.
• Age of the Home: Newer homes typically require fewer repairs and are often built to modern codes. However, historic homes in good condition can also carry premium values, especially in desirable locations.

Routine maintenance and upgrades show buyers and appraisers that the property has been well cared for, which helps justify a higher asking price.

4. Market Demand and Economic Conditions

Real estate, like any market, is influenced by supply and demand. Avrahom Orloff understands that when more people are looking to buy than there are homes available, prices go up. Conversely, when supply exceeds demand, prices stagnate or decline.

Contributing factors include:

• Interest Rates: Lower mortgage rates tend to encourage buying, which boosts demand and prices.
• Local Market Trends: A booming local economy with population growth will naturally push home values up.
• Seasonality: Spring and summer are traditionally busier real estate seasons, often resulting in higher prices due to increased competition.

Even macroeconomic conditions—like inflation, employment levels, and consumer confidence—can trickle down to influence housing demand and values.

5. Comparable Sales (Comps)

One of the most objective measures of a home’s value is the sale price of similar homes in the same area. Avrahom Orloff explains that these are known as “comps.”

To determine comps, professionals look at:

• Homes of similar size and style
• Properties within a specific geographic radius
• Sales within the last three to six months
• Homes with similar features, such as number of bedrooms, bathrooms, and type of garage or yard

Comps serve as benchmarks and are used by real estate agents, buyers, sellers, and appraisers alike to set listing prices or make offers.

6. Upgrades and Renovations

Not all renovations yield the same return on investment. Avrahom Orloff explains that strategic upgrades can significantly enhance a home’s market value, while others may have minimal impact or even turn buyers off if not done tastefully.

Value-boosting upgrades include:

• Kitchen Remodels: A modern, functional kitchen is one of the most sought-after features.
• Bathroom Upgrades: Adding a second bathroom or updating an existing one adds utility and comfort.
• Energy Efficiency Improvements: Solar panels, insulation upgrades, and new windows can be attractive to environmentally-conscious buyers.
• Curb Appeal Enhancements: Landscaping, exterior paint, and new doors or windows can make a strong first impression.

However, over-improving a home beyond the standards of the neighborhood can backfire. It’s important to align upgrades with local market expectations.

The Role of Home Appraisals

Avrahom Orloff understands that an appraisal is a professional evaluation of a home’s market value, usually conducted during the sale or refinancing process. Appraisals are critical because:

• They Influence Lending: Banks use appraisals to determine how much money they are willing to lend on a property.
• They Protect Buyers and Sellers: An objective valuation ensures no party is overpaying or underselling.
• They Reflect Current Market Trends: Appraisers consider local comps, property condition, and market conditions in their analysis.

If an appraisal comes in lower than a sale price, the buyer may need to renegotiate or come up with the difference in cash—making appraisals a make-or-break factor in many transactions.

A Complex Equation

A single factor does not determine a home’s value, but by an intricate interplay of location, size, condition, upgrades, demand, and market data. Avrahom Orloff explains that understanding these drivers allows homeowners to make informed decisions about when to sell, what improvements to invest in, and how to price their property competitively.

Avrahom Orloff emphasizes that in a fluctuating real estate market, staying informed is key. Whether you’re a first-time buyer or a seasoned homeowner, recognizing what truly determines a home’s value can lead to smarter financial decisions and a more successful real estate experience.