What’s Behind the Gates? Higher-Priced Homes

“This [research] provides clear evidence that homes in gated communities sell at a premium relative to comparable homes in non-gated communities,” said ARES Publication Director Ken Johnson in a release. Johnson is a real estate economist at Florida Atlantic University’s College of Business.The premium may be less in gated communities where amenities like a clubhouse, pool or tennis court drive up maintenance costs for residents, ARES researchers found. Examining a sample of gated communities, researchers discovered a $19,500 decrease in sale price in communities with these types of amenities.

“Additional maintenance costs associated with these amenities often outweigh their benefits, and it appears that while a gate has value, additional neighborhood amenities do not always provide additional value,” explained Mark A. Sunderman, one of the ARES researchers.

“From the perspective of both the buyer and the seller, this information should help each to better price property,” Sunderman continued. “A good understanding of what adds value and what does not should help create increased marketability of gated homes.”

“The long-held belief that gates add value is supported by the data, as long as the impact of the amenities is properly factored in,” Johnson added. “This should set buyers’ minds to rest as to whether or not they are actually receiving a boost in value when they purchase inside a gated community.”

Source: Florida Atlantic University (FAU)