Does an HGTV remodel effect a neighborhoods property value?

Question

I am curious to know if anyone here has owned a home in a neighborhood where there was an HGTV home remodel show shot. If so, did you see an increase in the value of your home and/or others in that neighborhood?

I have an "inside sources" telling me that there is a property currently being rehabbed for an HGTV show in the same neighborhood I have a flip project. They told me that they believe it will affect the market and cause home values to rise. Do you think this is true?

Ritch Bonisa · Answer

It hasn't changed anything in Indianapolis and we have Two Chicks and a Hammer. From my perspective - most of those shows make people (mainly newbies) think large rehabs happen super fast and skew the understanding of actual rehab costs. The labor usually gets paid on those shows, but many times the input players are acting for free (publicity and excitement of TV) and many materials are donated. It probably helps sell that individual home, because "My new house was on HGTV." That would be a 1 comp impact in a 1/4 to 1/2 mile radius. If someone disagrees, I'd love to hear someone else's take on it.

Jaron Walling · Answer

Matt K. · Answer

I'd argue the million other external factors that could impact value play a greater role than the TV show. I'd wager the people buying a house that catch the episode are probably pretty slim.With that said... if the home was well done... then I don't see how that wouldn't have a positive impact, but that comes from a well done home, not HGTV.

Joseph M. · Answer

I don’t think there are too many people that see a house on HGTV and then want to move to that neighborhood. Also by the time the show films there and is aired they’ve probably been flipping in that area a while .

Account Closed · Answer

The only possible impact will be if it sets a new high bar for that specific property. Ex 3 bed 2 bath 1200 sq ft bungalow on the 1500 block etc. Even then, only in an improving market where trend is up. 0% of appraisers I’ve dealt with put in enough effort to notice even that.

Darren Lenick · Answer

@Jared Cauffield from my experience I’d say no. It probably will create hype for properties in the area more out of curiosity than from real buyers but i dont think it will affect values. A homes selling price is dictated by what someone is willing to pay for it and not what was done to a neighborhood property. My opinion is based on doing an episode of Designed To Sell back in 2006 for my house in an LA suburb. It attracted a lot of attention but no qualified buyers. Part of my issue was the beginning of the real estate down turn but it’s also because many of the viewers of these shows are dreamers and not buyers. If you think about it, if you’re a serious buyer looking to buy a property, would you be searching HGTV or any other reality show for properties? The other side is that these TV shows don’t disclose all of the details. Some leave out closing costs, holding costs or the fact the house may not have closed because it didn’t appraise or the buyer wasn’t qualified in the end. You’ll notice most of these shows end with “If this deal closes, we may make $xxxxxx”.

Jaron Walling · Answer

@Ritch Bonisa I 100% agree especially with all the houses they flipped in Fountain Square.

Jared Cauffield · Answer

@Mike Verna There is plenty of comps in the area as it is in an urban location within Columbus, OH. I am thinking that it would be less about the comps and more about speculation or craze of buyers. TV makes people do funny things.

Mike V. · Answer

I think people are willing to overpay for a house simply because it’s got the HGTV bragging rights that the new owners will have with their friends and family. And it’s also probably going to be a very nicely done unit. This overpaying is a valid, legal comp that appraisers can use and will to some extent affect the local market in a positive way. The question I think is more important is how many comps are there in your area? If there’s a ton of them then one really inflated sale won’t do much. If there’s not many then it’s likely to carry more weight.

Jared Cauffield · Answer

Thanks @Matt K. and @Chris Mason ! I assume any remodels done in a given area can only help the valuations of the properties around it (assuming its done the right way). I was hoping that someone here on BiggerPockets would share an experience they had with HGTV remodels being done in their area. The lack of response leads me to believe that this isn't as big of a deal as others may think but I guess we will see.