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Pricing Residential Amenities: The Value of a View

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This study provides estimates of the value of the view amenity in single-family residential real estate markets. A focus on Bellingham, Washington, a city with a variety of views, including ocean, lake, and mountain, allows for differentiation of the view amenity by both type and quality. Results from a hedonic model estimated for several recent years suggest that depending on the particular view, willingness to pay for this amenity is quite high. The highest-quality ocean views are found to increase the market price of an otherwise comparable home by almost 60%; the lowest-quality ocean views are found to add about 8%. For ocean views of all quality levels, the value of a view is found to vary inversely with distance from the water.

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Benson, E.D., Hansen, J.L., Schwartz, A.L. et al. Pricing Residential Amenities: The Value of a View. The Journal of Real Estate Finance and Economics 16, 55–73 (1998).

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