Your historic home’s original features aren’t just charming – they’re appreciating assets that outperform the stock market. That’s a bold claim I know and your’e probably wondering “What’s the real value of historic homes?”
According to the PlaceEconomics study of Saratoga Springs, properties in historic districts average 2.5 times the assessed value per acre compared to the rest of the city. But many homeowners still rush to replace rather than restore, not realizing they’re cashing out a high-yield investment.
Here’s how it works: This is gonna get a little mathy so grab your T83 calculator and hear me out. Historic features follow a compound appreciation pattern that we can conceptualize with this formula (note: this is a theoretical model for understanding, not a validated economic equation):
Feature Value = Original Cost × (1 + r)ʸ × S × H
What do all those variables stand for? Let’s break it down.
- r = Rarity appreciation rate (based on scarcity increase)
- y = Years preserved
- S = Craftsmanship scarcity multiplier
- H = Historical district premium
While the exact multipliers vary by market and time period, this framework helps us understand how preservation value compounds. The formula is supported by real market data showing three key value drivers:
- Market Resilience: Historic districts consistently show greater rates of appreciation than properties elsewhere in the same city. They fall later and less steeply when markets decline, and begin their value recovery sooner than other neighborhoods.
- Location Premium: The value of historic real estate is driven by its context. As the PlaceEconomics study notes, “The value of an individual building does not somehow magically emerge from within the property boundaries, but from its larger context.”
- District Enhancement: Historic designation provides protection for the surrounding context, which is the economic essence of historic districts and drives long-term value appreciation.
Real World Studies
Sounds great, but does any of this translate to the real world? 100% it does! Check out the studies below and the real world returns for the value of historic homes versus non-historic.
In San Antonio, over a 15-year period between 1998 and 2013, historic district homes increased 139% in value, while similar homes outside historic districts only gained 68%. This pattern held true even during market downturns. I’ll take a more than double ROI on my home value any day!
Looking at Indianapolis between 2002 and 2016, a single-family house in a local historic district increased in value by 7.3% each year on average, compared with just 3.5% for houses not in historic districts.
Historic districts, making up only 5.5% of properties in the city, represented nearly 20% of all sales and almost 35% of the aggregate sale amount.
Final Thoughts
The point is this: the value of any old house is far greater than most people think. Your investment appreciates faster in good times and decreases less in bad times. That can’t be said for any investment in the stock market that I know of.
If your scared of the repairs and maintenance that come with owning an old house you can feel confident that you can fix it yourself using the info in the blog and with things like the Window Restoration Mastery Course. Then you can enjoy higher returns than your friends in the suburbs.
Most historic houses also benefit from being located in first-rung neighborhoods rather than on the outskirts of town so you can have even more confidence about the long term status of your investment. I’d encourage you to take the plunge into olof house ownership!
Founder & Editor-in-Chief
I love old houses, working with my hands, and teaching others the excitment of doing it yourself! Everything is teachable if you only give it the chance.