Investing in a historic home usually pays, Realtor says
PERRY — George Massey keeps these stats handy for doubters.
A house in Edmond’s Faircloud addition sold in 1995 for $228,333 and sold in 2012 for $340,000 — that’s an increase of 49 percent.
A house in northwest Oklahoma City’s Quail Creek area sold in 1993 for $170,000 and sold in 2011 for $288,500 — for an increase of 69 percent.
Massey, a Realtor, bought his own house in Oklahoma City’s historic Heritage Hills in 1993 for $170,000 and it appraised in 2012 for $520,000 — an increase of 205 percent.
Investing in a historic home usually pays, he said at Our Sense of Place: Oklahoma’s 25th Annual Statewide Preservation Conference, earlier this month in Perry.
Historic headaches
Of course, older homes can come with headaches, said Massey, a sales associate with RE/MAX First, 1000 Wilshire, Suite 428. Property disclosures are especially critical — for both sellers and buyers — he said.
Structural problems can be missed when buyers are wowed by more pleasing aspects of a historic home, he said, showing slide after slide of shims, bricks and blocks with no footings and even 2-by-4s used to shore up foundations, as well as leaning columns, drywall cracks and other flaws hard to detect by the unwary eye.
A general home inspection should be just the start when considering a historic house, Massey said. Other inspections include engineering, termite, mold, lead-based paint, roof, square footage, asbestos and radon, he said. Detection of problems need not derail a purchase, but must be dealt with, he said.
“If you’re buying a $300,000 house, I’d spend $1,000 to $1,500 for inspections. It’s a big invest-
ment,” Massey said.
Look closely
Sometimes detective work is required, he said, giving some examples.
Mold growing through a framed picture in one dining room came from rain getting in through a small crack in a mortar joint at an upstairs bedroom window that ended beside a valley of a lower hip roof. Mold along a ceiling in another house wasn’t from a roof leak, but from a dryer vent exhausting into a tight attic space. A clogged drain in a flower bed caused mold beneath a window that found its way inside and behind paneling in a study.
Such obstacles take little away from the appeal of buying a house and living in a historic district, said Katie McLaughlin Friddle, historic preservation officer with the Oklahoma City Planning Department.
Her presentation at the statewide preservation conference was “Beyond the Quaint Charm and Original Fireplaces: The Tangible and Intangible Benefits of Living in a Historic District.”
Plenty of payback
Friddle broke the benefits down into categories:
Sustainability: Historic houses generally have light-colored exteriors
that reflect light and heat; have working windows that allow ventilation; have tall ceilings to allow heat to rise from living space; have wide porches and wide eaves that provide shade across the facade; and often have mature trees providing extra summer shade.
Older neighborhoods tend to have sidewalks and mature trees.
Prestige: Designated historic districts are esteemed — partly because of rules that sometimes cause controversy but are meant to lend stability and consistency that insulate them from fluctuations in the broader housing market.
Rules and review processes for improvements have more than one upside, Friddle said, but a big one is: “You might have to abide by the rules, but so does your neighbor.” Plus, she said, because of public input and involvement, “the guidelines for a historic district are a living document.” property values compared with other areas, according to the study commissioned by Preservation Oklahoma Inc. and the State Historic Preservation Office.
By 2003, nine of 11 historic districts had higher values after controlling for “standard real estate influences” and had appreciated faster than other areas, according to the study by David Listokin of Rutgers University and Dan Rickman of Oklahoma State University.
The researchers found the greatest rates of appreciation over the three years in Crown Heights (69 percent), Edgemere Park (53 percent), and Heritage Hills and Capitol-Lincoln (both 28 percent). They called the increases “remarkable average annual appreciation rates.”
Appreciation likely
Listokin and Rickman acknowledged that home value appreciation is not a given with historic preservation — but is likely.
“From a theoretical perspective, historic designation can exert many different pressures on a property’s value. It can improve it by providing prestige, protection from demolition, financial incentives via tax credits, and being a catalyst for neighborhoodwide improvement,” they wrote in an executive summary of their study. “It can theoretically dampen a property’s value, however, by sometimes ramping up the costs of building rehabilitation and by sometimes disallowing or challenging the realization of real estate ‘highest and best use.’ Thus, it is theoretically possible that some owners will gain and others will lose as a result of officially designating their properties as historic.”
However, they wrote, “Regardless of the vintage ... (research) overwhelmingly points to a net positive effect on property values of historic designation. Only a handful of studies come to a negative impact conclusion, and most of these are studies focusing strictly either upon the costs of alteration and demolition or upon the values of multifamily residential properties.”