The modern real estate market has evolved beyond traditional, simple valuation drivers like square footage and comparable sales. Increasingly, buyers prioritize operational efficiency, sustainability, and technology integration alongside square footage and good locations.
A National Association of Realtors (NAR) study suggests that just under two-thirds (63%) of real estate professionals consider energy efficiency an important factor in listings; the same holds for other metrics, such as water efficiency. Here, we’ll discuss traditional drivers such as location and neighborhood quality, as well as more modern priorities like sustainability, technology integration, and water and energy efficiency.
Location and Neighborhood Quality
Location and neighborhood quality are still essential drivers of property valuation, but what makes a location “good” is different today than it was in the past. Increasingly, buyers are much more data-driven in their assessments. Today’s buyer can assess crime rates, school quality, access to amenities, and environmental risk through fairly simple online searching. Some research suggests that almost 40% of buyers used virtual reality (VR) tools to evaluate homes and neighborhoods in 2025, compared with just 22% in 2022.
As a result, real estate professionals and the market have had to adapt to new conditions. While location and neighborhood quality’s roles as the main drivers of value remain intact, the way these valuations are made and the factors that impact suitability for buyers have changed to meet thoroughly modern needs and priorities.
Property Features and Home Improvements
Today’s buyer increasingly prioritizes features that weren’t previously important – a big example is the availability of suitable office space. Post-pandemic trends have allowed many professionals to trade the office for home working, at least part of the time – according to Gallup data, in professions where flexible or off-site working is possible, 52% of roles are hybrid with a further 26% being exclusively remote. As a result, 38% of buyers in 2025 prioritized home office space, up from 28% in 2023.
Other amenities and home improvements have proven important with buyers, including gardens and private yard space – 42% of recent buyers value outdoor space – while in 2025, 33% of buyers wanted smart security or other automation features.
While property features and amenities have always been important considerations for buyers, the specific features desired by modern buyers are driving broad changes in which properties meet those criteria.
Sustainability and Energy Efficiency
A major modern driver of value is sustainability and energy efficiency, with energy-efficient homes commanding a considerable premium – typically 3-5% higher, according to Freddie Mac data. A HomeLight survey of more than 900 real estate agents in 2022 found that homes with better energy efficiency saw an added value of around $8,000 compared to those with worse efficiency ratings. This aligns with NAR’s findings that 90% of homebuyers are willing to pay more for homes with energy-saving features.
Sustainability and energy efficiency command a premium because sustainability represents significant ongoing operational savings, greatly improving the affordability and desirability of efficient homes. Research by the Department of Energy reports that efficient home energy management systems can deliver energy savings up to 35%, with utility bill reductions up to a massive 29%. Against the backdrop of rising bills, many prospective homeowners opt for higher initial purchase prices with lower monthly operational costs, thereby increasing overall property value.
Technology and Smart Homes
Parks Associates research estimates that 42% of US households with Internet access own at least one smart home device. Popular smart devices include thermostats, lighting systems, security devices, and entertainment systems like smart speakers. A Security.org survey found that 56% of respondents already owned security-related smart devices, while 90% of those without such devices expressed a desire to own one in the future.
The rapid rise of smart home technology has shifted homebuyers’ priorities significantly in recent years, with research showing that 78% of buyers are willing to pay more for a home with smart devices. As a result, these devices don’t simply provide functionality; a recent NAR report suggests smart home devices can increase a property’s resale value by up to 5%.
Water Submetering and Utility Cost Transparency
Rising water costs mean buyers, especially in drought-prone regions, are increasingly considering the total cost of ownership, including utilities, when they are looking to purchase a new home. Water submetering has emerged as a key consideration, allowing unprecedented transparency and control over water consumption.
The benefits of water submetering to property owners, homeowners, and prospective buyers are enormous: multiple sources, including the Environmental Protection Agency and the US DoE, suggest submetering can lower water consumption from 15% to 30% and significantly reduce ongoing operating costs.
The EPA estimates that household leaks waste more than 1 trillion gallons of water annually; EPA research also positions smart water submeters as effective at identifying such leaks early, preventing spiralling costs. A case study from water submetering provider Mainlink showed that one California community unlocked $17,000 in monthly savings after adopting a modern water submetering system, representing a significant decrease in utility spending.
Accurate billing, efficiency, and transparency increase perceived and actual affordability of properties, even at higher purchase prices.
Shifting Priorities
Factors influencing property valuations today are increasingly shifting from static attributes, such as square footage, towards performance-driven factors, including energy efficiency, smart technology integration, and cost transparency. Market evidence shows buyers will pay a premium for homes that reduce costs, improve convenience, and integrate data, sustainability, and technology, driving new trends in property valuation.
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