Indoor Pool Value

[bgillett]

How much value should be given to an indoor pool area? We have a 16x32 indoor pool that is enclosed in a 26x52 building w/ vaulted ceilings, 10 sliding doors and 16 skylights - There is another room attached to the pool room that is also included in the pool area for a total square footage of around 1500. This pool area is heated and used year around. I believe it would could well over $100,000 to replace. What is the value of a structure like this? I realize it is a super adequacy, but I believe there is some value - even if it is nominal compared to the cost of construction. We were told that it wouldn't be considered in our appraisal because it was uncommon? Does that sound right?

 

[DMZwerg]

How much value should be given to an indoor pool area? We have a 16x32 indoor pool that is enclosed in a 26x52 building w/ vaulted ceilings, 10 sliding doors and 16 skylights - There is another room attached to the pool room that is also included in the pool area for a total square footage of around 1500. This pool area is heated and used year around. I believe it would could well over $100,000 to replace. What is the value of a structure like this?

There are many types of value, so I will assume you mean "market value".
The only way to know the affect on market value for YOUR SPECIFIC MARKET would be for somebody to analyze the affect on market value.

I have seen outdoor pools worth nothing at best in many of my local markets (in some markets they yielded a 5%-20% reduction in market value) but in other areas of the country outdoor pools are the opposite.

But you are talking about an indoor pool, which is something that can be used all year round, and thus should either be a positive or generally at worst zero. More below.

I realize it is a super adequacy, but I believe there is some value - even if it is nominal compared to the cost of construction. We were told that it wouldn't be considered in our appraisal because it was uncommon? Does that sound right?

It depends.
In my market such a building with a pool in it would add value of square footage (and SF of building only, not the actual pool) at a rate of 50% or more of the rate GLA is adjusted in the specific market. But that is my market, and yours is different. Pole barns could be worth one value here per SF, another there, and other rates depending on exact location, etc, and likewise with other accessory buildings such as pool buildings. Therefore it could be that whomever claimed that could be telling you what is typical in your market OR they don't want to deal with the additional complication for one reason or another.

So, what is the circumstance that you are asking that question?
Selling, refinancing, looking at an appraisal report, or other?

 

[Deleted member 77547]

Are there any other homes with an indoor pool feature in your market area? If not then it may be a feature that may not have much, if any, contributory value, regardless of what it would cost to replace. Cost does not equal market value.

 

[glenn walker]

Because something is uncommon does not mean it has no value , first of all the description is of the pool and the 26' X 52" building it's enclosed in. In my market area something like this could range from a low of $10,000 to as high as $200,000. This indoor pool in a Beverly Hills home could easly exceed $100,000 but if I move the pool down to a typical Los Angeles neighborhood the Pool may only command $10,000 to $20,000.

Try working it backwards , how much is the home worth without the Pool and the 26' X 52" enclosure ? Also what does it cost to heat this pool in the winter months ? and does this improvement fit into the overall size and design of the main home, the pool enclosure is about 1,350 square feet in size , how large is the main home in relation to the pool house ? ( this is a key factor in my opinion )

 

[residentialguy]

It depends. In my market such a building with a pool in it would add value of square footage (and SF of building only, not the actual pool) at a rate of 50% or more of the rate GLA is adjusted in the specific market.

I'm glad this came up. I am currently doing a $1m home with an indoor pool. I'm not going to use the pool area (1063 sq ft) in my GLA. It is nowhere close to GLA value. The home (without pool) has a 4154 GLA. It is a very unique, one of a kind home built around 1940, in an area where only newer executive homes are pulling in that kind of value. I have my work cut out for me on this one. I spent all day running around different areas of 16 comps. I'm charging $1,400 for the appraisal and that's a bargain, considering all the time and blood, sweat & tears that will go into this.

I will be running paired analysis on homes with indoor pools to try to find if there is any contributory value for the pool. While, yes, they are all year round, they are also high maintenance and fraught with issues as well as high costs. MN weather is very similar to MI...can get very hot and very cold.

I may end up giving it no value. The buyer and listing agent did not give it value when coming up with a listing price...taking that with a grain of salt, of course. We'll see. If someone from MN or like state has done research on this, I'd love to hear your take on it.

 

[bgillett]

The home is 3,000 sq ft w/o the pool. There are virtually no homes in the are with indoor pools so I don't know how this effects the market value. There are lots of homes with barns - farming town - so it seems that it should be worth at least as much as a heated barn would be. I have had 2 appraisals - the house is unique for the area, three including the purchase appraisal. In two the house was 3200 sq ft and one it was 2200 sq ft b/c he didn't want to include one of the additions (I dont' know why). In one the pool was worth $10,000 and the other it wasn't included. I want to refi my mortgages - but I keep getting appraisal values that don't make sense. I am trying to figure out is there some kind of standard that appraisals follow or is it just they make it up as they go. If I buy a classic car with a unique set of features it isn't worth less, is a house different?

 

[Ken B]

Someone previously mentioned that there are different value definitions. "Market value" is the value definition appraisers are most often asked to develop and report. Given your information, there are appears to be substantial demand for properties with barns. That demand is established by the market. With that demand, there is value. You report that there are few to no homes in your market area with indoor pools. The market indicates there is little to no effective demand for that feature. Effective demand requires not just a desire, but a desire combined with the financial ability to purchase. The lack of properties with a feature similar to yours indicates that there is little to no effective demand. Given limited resources, the market has decided to invest their funds differently. The appraiser must consider the market's behavior.

Swimming pools are the textbook example of superadequacy. Superadequacy results when a feature has a greater cost than value. Value, in this case, is typically market value. However, to the original owner who installed the feature, cost was equal to or less than value. This value is "value in use." "Market value" and "value in use" have different definitions and the methods of developing opinions of these different value types are also different.

"Uniqueness" is not a positive factor when developing an opinion of market value. The very essence of the uniqueness results in a limited market. At the extreme, that market could be limited to a single entity. In such an extreme case, the feature would have no value to the market at large. In less extreme cases, the feature will have some value, but that value is very likely to be something less, perhaps substantially less, than cost. The less common the feature, the more substantial the difference between cost and value.

 

[JTip]

If I buy a classic car with a unique set of features it isn't worth less,

With a pool like that in your market, you have a 57 Chevy with dual blueray players in the back seat. Sounds like a classic case of overimprovement.

I have done several homes with indoor pools. From average quality to a top of the line, seamless intergration with the other rooms in the house and a $20,000 dehumidifier clearing the indoor pool area.

Does your pool room/building actually attach to your house or is it detached, a few steps from your main house? Also, describe the flooring around the pool. Was the pool originally outdoor, surrounded by concrete or decking material and the enclosure was a later addition? If you have a picture, that would help too.

While we cannot provide you with a dollar value of the additional value your pool provides, these additional details can help with the discussion to give you an idea of how the value would be approached.

 

[Scott R Marshall]

I am trying to figure out is there some kind of standard that appraisals follow or is it just they make it up as they go. If I buy a classic car with a unique set of features it isn't worth less, is a house different?

Cars and houses are two entirely different animals. Firstly cars are portable and their values I would imagine stay fairly consistent from place to place. Homes are directly affected by the market they are located in. An indoor pool in your market may be a very desireable amenity or it might be considered something more preferential or a superadequacy. How much is a $200,000 cost to build amenity worth in a market where the highest sale is $250,000 versus the same amenity in a market where the highest sale is $8.5 million? To answer your question, there is a standard which an appraiser can utilize to determine the contributory value, if any, for your indoor pool, but it is market specific and would require an appraiser from within your market to adequately determine.

 

[DMZwerg]

I will be running paired analysis on homes with indoor pools to try to find if there is any contributory value for the pool. While, yes, they are all year round, they are also high maintenance and fraught with issues as well as high costs. MN weather is very similar to MI...can get very hot and very cold.

Do your analysis very carefully and check specifically for indoor pools as in colder areas outdoor pools add no value at best and actually dtract from value (in the case of my mentor's house it was a major contributor to the 20% BELOW market value for the area). My mentor and I have run across a number of properties with indoor pools and to the best of our analysis in our local markets the added benefit appears to be the Sq.ft. of the pool house as additional GLA, but at a ratio (I say closer to 50%, he has seen closer to 100% IIRC ... we just discussed this topic last week ).

Hope that helps residentialguy as well as the original poster.