Swimming Pools, Movie Stars

Posted by Gary Hoeferkamp on July 1, 2022.

Sorry, no Beverly Hillbillies here, but residential pools have sure jumped up in popularity! I noticed a marked increase, mainly in the mid to upper price ranges, of buyers looking for homes with pools, as the price and wait of installing new ones has soared. An appraiser I spoke to related that he gives pools a higher valuation now, as well as other home amenities, due to the spiking prices and wait times for many home improvements. He adds from 5-10% of the home's value for a pool depending on lot, size, age and other factors. It would still be very unusual to recoup the full cost of the installation, but the return is higher now than in the past.

I ran several scenarios of areas in Wildwood, Creve Coeur, Town & Country and Manchester, plus 2 subdivisions with similar numbers of homes with and without pools, one in Town & Country and one in Wildwood. The differences in price were always higher with pools anyway I ran comparisons, but the variances ran from 14% to 44% (averaged 28%) when running on municipal boundaries or even 1 mile squares, in order to get a larger sampling and theoretically more accurate. This size brings in too many variables, though, in home size, lot size, condition, etc to be effective. When I ran the 2 subdivisions, which shrinks the home variables to a minimum, those differences were $953,000 with pool vs 908,000 without, a 5% premium; and $1,247,000 with vs $929,000 without, a 25% premium. Then I took the larger samples and computed price per square foot, and those pool premiums ran from negative 2% in Manchester to 14% Ladue to 23% Creve Coeur, still too wacky to rely upon. However, it underscored a pool rule of thumb, that on smaller lots and home values, expect a lower return.

I also researched some large surveyors on their results. The National Ass'n of Realtors latest Return on Investment posted is from 2018 showing pools averaging $25,000 return, or 43%. Homelight says from 2021, an average return of $27,000 on pools. If you have looked into the cost of a pool lately, those figures seem quite low.

End result: Homes with pools are hot sellers. If you have a pool and are considering selling, now is a very good time! I estimate a 5-6% increase (but could be 3-10%) of home value for an average pool in an area that commonly has pools; and a roughly 50-60% return on investment. These are very loose guidelines, so please install a pool mainly for your enjoyment, certainly not for the return. And if estimating value on existing homes with and without, I would need to look at the exact home and area to determine an accurate range.

Watch for my announcement next week of my pilot program on a salaried Apprenticeship Program at Hoeferkamp Real Estate. I will be taking applications soon, and looking to hire in mid-late July!

Here is an update on current real estate sales in STL, all prices, existing single family and condo from yesterday (June 29):

• Manchester has 10 homes available and 25 under contract
• Ballwin has 22 homes available and 50 under contract
• Kirkwood has 30 homes available and 75 under contract
• St Peters has 25 homes available and 96 under contract
• Arnold has 10 homes available and 45 under contract
• Florissant has 48 homes available and 120 under contract

The ratios run from 2.5 pending sales for every 1 available, up to 4.5 pending sales for 1 available. That still indicates no slow down in the STL market, as the average ratios have been running from 2 to 4 pending sales for every 1 available for the past 2 years. One big change from 3 weeks ago is the overall number of available and pendings has dropped considerably in Ballwin, Florissant, Arnold and St Peters, while Kirkwood increased substantially, and Manchester stayed the same. That is a reflection of the heavy spring market closing out, and could indicate a drop of buyers entering the market, although so far that has been matched by less homes coming on line. You can bet that many record prices have been set this month, I set four subdivision records myself since April, and 2 more likely in July.

Gary had a record 6 months from January to June with $6 million in closed sales volume! It has been a busy year, thank you to our clients who continue to trust us with their home sales and purchases, and refer others.