Trend in real estate valuation: Reusing materials or buildings
Appraisers may find that more buildings are being built with reclaimed or reused building materials, which means they might need to adjust their approach to accurately reflect the values of these materials within homes. A current trend in home construction favors reclaimed materials that are more environmentally friendly than all-new items. While older or recycled materials have long been a popular choice for certain home decor items, these elements have made the leap into the actual construction of homes.
The trend toward reuse
As more people become aware of the environmental impact created by procuring building materials, a higher percentage of new home construction has started to incorporate reclaimed elements. This may include wood from homes that are set to be demolished or other elements, like doors and windows, that can be installed into a new structure, according to Green Building Elements.
"Reclaimed elements are often cheaper."
Several organizations assist with the deconstruction of old buildings, and their efforts make it easy to get the elements needed for new construction. Those pieces are often cheaper than comparable new materials, according to Houselogic. That price disparity, and the age of the materials, means valuation professionals need to keep additional elements in mind.
Structures that incorporate reclaimed materials may identify a greater return on investment when appraisers apply the cost approach to finding a valuation. These elements are generally cheaper than new materials to purchase. It's also possible that these pieces will bring increased liability for homeowners. Older pieces can still carry elements like lead paint, which must be dealt with. Appraisers must learn if a building they are valuing incorporates these reclaimed pieces so they can accurately assess the structure's true worth as well as identify any potential health risks or inferior energy efficiency features.