What is the value of a basement?

Let me explain basement value as this relates to no basement vs a basement and a finished basement vs an unfinished basement.

I completed a study for newer homes in a specific area located in Spokane Valley. I located three to five 1 story homes that sold recently that do not offer a basement. All of the sales were recent and all of the sales offered three bedrooms and two bathrooms on the main level.

Next, I looked at three to five sales that offer basements. These sales offer the same functional utility with the same bedroom and bathroom count on the main level. The basements for these sales are all unfinished. In this case, the value of a finished basement vs. no basement is supportive at around $10 to $15 per square foot. So if your home is a newer home located around this area, and your home offers 1350 square feet, then your basement will be valued at $13,350 to $17,550 more than a home with no basement.

I completed an additional study during the same time frame to compare basement value with older homes. In this study I selected an older neighborhood with most of the homes that are built around 1950. Eight homes sold within the past six months within this area that offered no basements. In comparison, I completed an additional search to locate homes with basement in the same area and that sold within the same time frame.

The median price for homes with no basement is around $105,000. The median price for homes with basements that are either finished or unfinished is around $120,000. Regardless of whether the basement is finished, the adjustment for a home with a basement and no basement is supported at around $15.00 to $19.00 per square foot. In this case, there is no discernable value difference between a finished basement and an unfinished basement.

Each market is different and each home is different. The only clear conclusion in this case is that basements will increase the value of your home. In this case, I completed two separate studies, one within a newer subdivision and one within an older subdivision. In both cases, the value of an unfinished basement and no basement is valued at around $15.00 per square foot. This will change over time and with each individual home. Furthermore, what I’ve found many times is the newer your home is the more the basement will be valued. This is usually because the market area will be comparing homes that have just been built and the cost to add these types of amenities, so you’ll get more money for a finished basement for newer homes, everything else being equal.

So if you are trying to decide of the basement is worth finishing, figure out how much the basement will cost you to finished and figure out what basement values are in your area. Most of the time, you’ll find that it will cost much more to finish the basement than what you’ll get back out of the dollar value, especially, if your home offers a nice functional main floor living area with three bedrooms and two bathrooms. Once you get into homes that offer two bedrooms or less, the finished basement becomes more important. This is because the market will want and need that extra space.

Most of the time, the best way to finish the basement is to complete the work yourself or if you can find a contractor that is in need of work and can complete the basement for a better or same price as what it would cost you. This way, you are passing the benefits to your home and the value will be given to you instead of your contractor profits. This will also allow a higher probability to get your money back when you sell. Make sure you get all needed permits for your county. If you don’t, this could ruin your chances of getting a loan.