In looking at this article below, do keep in mind that people do not usually make money on these home projects directly-- you can increase the general appeal in your home, and shorten the time it's on the market by engaging a buyer sooner. Don't be discouraged from doing projects, but remember that you are not likely to get a 100% return for it!
Daily Real Estate News | December 16, 2010 | Share
Owners Recoup More with Exterior Home Projects
As part of the 2010-11 Remodeling Cost vs. Value Report, Realtors® recently rated exterior replacement projects among the most cost-effective home improvement projects, demonstrating that curb appeal remains one of the most important aspects of a home at resale time.
“This year’s Remodeling Cost vs. Value Report highlights the importance of exterior projects, which not only provide the most value, but also are among the least expensive improvements for a home,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Since resale value can vary by region, it’s smart for home owners to work with a Realtor®through the remodeling and improvement process; they can provide insight into projects in their neighborhoods that will recoup the most when the owners are ready to sell.”
Nine of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. The steel entry door replacement remained the project that returned the most money, with an estimated 102.1 percent of cost recouped upon resale; it is also the only project in this year’s report that is expected to return more than the cost. The midrange garage door replacement, a new addition to the report this year, is expected to recoup 83.9 percent of costs. Both projects are small investments that cost little more than $1,200 each, on average. Realtors® identified these two replacements as projects that can significantly improve a home’s curb appeal.
“Curb appeal remains king – it’s the first thing potential buyers notice when looking for a home, and it also demonstrates pride of ownership,” said Phipps.
The 2010-11 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 13th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine.
Realtors® provided their insight into local markets and buyer home preferences within those markets. Overall, Realtors® estimated that home owners would recoup an average of 60 percent of their investment in 35 different improvement projects, down from an average of 63.8 percent last year. Remodeling projects, particularly higher cost upscale projects, have been losing resale value in recent years because of weak economic conditions.
According to the report, replacement projects usually outperform remodel and addition projects in resale value because they are among the least expensive and contribute to curb appeal. Various types of siding and window replacement projects were expected to return more than 70 percent of costs. Upscale fiber-cement siding replacement was judged by Realtors® the most cost effective among siding projects, recouping 80 percent of costs. Among the window replacement projects covered, upscale vinyl window replacements were expected to recoup the most, 72.6 percent upon resale. Another exterior project, a wood deck addition, tied with a minor kitchen remodel for the fourth most profitable project recouping an estimated 72.8 percent of costs.
The top interior projects for resale value included an attic bedroom and a basement remodel. Both add living space without extending the footprint of the house. An attic bedroom addition costs more than $51,000 and recoups an estimated 72.2 percent nationally upon resale; a basement remodel costs more than $64,000 and recoups an estimated 70 percent. Improvement projects that are expected to return the least are a midrange home office remodel, recouping an estimated 45.8 percent; a backup power generator, recouping 48.5 percent; and a sunroom addition, recouping 48.6 percent of costs.
Although most regions followed the national trends, the regions that consistently were estimated to return a higher percentage of remodeling costs upon resale were the Pacific region of Alaska, California, Hawaii, Oregon and Washington; the West South Central region of Arkansas, Louisiana, Oklahoma, and Texas; the East South Central region of Alabama, Kentucky, Mississippi and Tennessee; and the South Atlantic region of the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia.
The regions where Realtors® generally reported the lowest percentage of costs recouped were New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont), East North Central (Illinois, Indiana, Michigan, Ohio and Wisconsin), West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota), and Middle Atlantic (New York and Pennsylvania).
“It’s important to remember that the resale value of a particular improvement project depends on several factors,” said Phipps. “Things such as the home’s overall condition, availability and condition of surrounding properties, location and the regional economic climate contribute to an estimated resale value. That’s why it is imperative to work with a Realtor®who can provide insight and guidance into local market conditions whether you’re buying, selling or improving a home.”
Results of the report are summarized in the January issue of REALTOR® Magazine. To read the full project descriptions, access national and regional project data, and download a free PDF containing data for any of the 80 cities covered by the report, visit http://www.costvsvalue.com/.
Source: NAR
http://www.realtor.org/RMODaily.nsf/pages/News2010121601?OpenDocument
Thursday, December 16, 2010
Buying that home...
It is true that owning a home can be a great help in relieving some income taxes... and many renters still look forward to buying someday... so, here's an interesting article below!
Daily Real Estate News | December 16, 2010 | Share
People Still Want to Own a House: Fannie Mae
The desire to own a home hasn’t been diminished by the downturn in the industry, according to a survey by Fannie Mae.
51 percent of owners and renters say that the housing crisis has not affected their overall willingness to buy a home. About 27 percent said they are more likely to buy since the crisis, presumably because of lowered prices, and 19 percent said they are more likely to rent.
In the short term, Americans are nervous about buying. About 33 percent say they would be more likely to rent their next home than buy, up from 30 percent in January. Among renters, 59 percent said they would continue to rent in their next move, compared to 54 percent in January 2010.
Other findings include:
· 66 percent of respondents say they believe that housing is a safe investment - as safe as an IRA or a 401(k) plan.
· About 50 percent say they believe that owning is a good idea, even if they plan to stay in the home less than three years.
· 86 percent identify tax benefits as a reason to buy, even though tax benefits are small or non-existent for many homeowners.
Source: Fannie Mae (12/15/2010)
http://www.realtor.org/RMODaily.nsf/pages/News2010121602?OpenDocument
Daily Real Estate News | December 16, 2010 | Share
People Still Want to Own a House: Fannie Mae
The desire to own a home hasn’t been diminished by the downturn in the industry, according to a survey by Fannie Mae.
51 percent of owners and renters say that the housing crisis has not affected their overall willingness to buy a home. About 27 percent said they are more likely to buy since the crisis, presumably because of lowered prices, and 19 percent said they are more likely to rent.
In the short term, Americans are nervous about buying. About 33 percent say they would be more likely to rent their next home than buy, up from 30 percent in January. Among renters, 59 percent said they would continue to rent in their next move, compared to 54 percent in January 2010.
Other findings include:
· 66 percent of respondents say they believe that housing is a safe investment - as safe as an IRA or a 401(k) plan.
· About 50 percent say they believe that owning is a good idea, even if they plan to stay in the home less than three years.
· 86 percent identify tax benefits as a reason to buy, even though tax benefits are small or non-existent for many homeowners.
Source: Fannie Mae (12/15/2010)
http://www.realtor.org/RMODaily.nsf/pages/News2010121602?OpenDocument
Friday, December 3, 2010
Appraisal Standard changes...
These changes will bring more regulation and difficulties, since appraisers will not be easily held accountable... just hope you get a really good appraiser!!!!!!!!!
Daily Real Estate News | December 3, 2010 | Share
Fed Releases Updated Appraisal Guidelines
The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration jointly on Thursday released the latest and what is expected to be final version of property appraisal guidelines.
The new guidelines set a standard for appraisal independence. Lenders can exchange information with appraisers, but they cannot "directly or indirectly coerce, influence, or otherwise encourage an appraiser or a person who performs an evaluation to misstate or misrepresent the value of the property."
Among other rules:
· Banks cannot tell the appraiser of any expected or qualifying estimate of value.
· Banks cannot specify a minimum value requirement for the property that is needed to approve the loan or as a condition of ordering the valuation.
· Banks cannot tie an appraiser's compensation to loan approval.
· Banks can’t blacklist an appraiser if his valuations fail to meet expected thresholds.
The agencies also clarified that broker price opinions (BPOs) don’t comply with the minimum appraisal standards.
Source: Housing Wire, Jon Prior (12/02/2010 http://www.realtor.org/RMODaily.nsf/pages/News2010120303?OpenDocument
Daily Real Estate News | December 3, 2010 | Share
Fed Releases Updated Appraisal Guidelines
The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration jointly on Thursday released the latest and what is expected to be final version of property appraisal guidelines.
The new guidelines set a standard for appraisal independence. Lenders can exchange information with appraisers, but they cannot "directly or indirectly coerce, influence, or otherwise encourage an appraiser or a person who performs an evaluation to misstate or misrepresent the value of the property."
Among other rules:
· Banks cannot tell the appraiser of any expected or qualifying estimate of value.
· Banks cannot specify a minimum value requirement for the property that is needed to approve the loan or as a condition of ordering the valuation.
· Banks cannot tie an appraiser's compensation to loan approval.
· Banks can’t blacklist an appraiser if his valuations fail to meet expected thresholds.
The agencies also clarified that broker price opinions (BPOs) don’t comply with the minimum appraisal standards.
Source: Housing Wire, Jon Prior (12/02/2010 http://www.realtor.org/RMODaily.nsf/pages/News2010120303?OpenDocument
Thursday, December 2, 2010
Pending Home Sale Statistics...
Daily Real Estate News | December 2, 2010 | Share
Strong Rebound in Pending Home Sales
Pending home sales jumped in October, showing a positive uptrend since bottoming in June, NAR says.
The Pending Home Sales Index, a forward-looking indicator, rose 10.4 percent to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5 percent below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.
Last October, first-time buyers were motivated to make offers before the initial contract deadline for the tax credit last November. The data reflects contracts and not closings, which normally occur with a lag time of one or two months. Lawrence Yun, NAR chief economist, said excellent housing affordability conditions are drawing home buyers. “It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011,” he said.
“More importantly, a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery,” Yun said. Recent loan performance data from Fannie Mae and Freddie Mac clearly demonstrates very low default rates on recently originated mortgages, much lower that the vintages of 2002 and 2003 before the housing boom.
The PHSI in the Northeast jumped 19.6 percent to 71.3 in October but is 27.3 percent below the tax credit peak in October 2009. In the Midwest the index surged 27.3 percent in October to 81.7 but is 24.8 percent below a year ago. Pending home sales in the South rose 7.1 percent to an index of 93.8 but are 18.4 percent below October 2009. In the West the index slipped 0.4 percent to 104.3 and is 15.6 percent below a year ago.
Near term, Yun expects home sales will continue to climb from their cyclical low this past summer. “Even so, we now have some consumer concerns regarding the mortgage interest deduction, an important component in housing affordability,” he said. “Preliminary results of a new survey show nearly three out of four home owners and two out of three renters consider the mortgage interest deduction to be extremely or very important to them. Home owners already pay between 80 and 90 percent of all federal income taxes and additional tax burden would hurt them and the economic recovery, so we have a reasonable hope that it will not be changed.”
Source: NAR
Browse all of today's news
http://www.realtor.org/RMODaily.nsf/pages/News2010120201?OpenDocument
Strong Rebound in Pending Home Sales
Pending home sales jumped in October, showing a positive uptrend since bottoming in June, NAR says.
The Pending Home Sales Index, a forward-looking indicator, rose 10.4 percent to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5 percent below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.
Last October, first-time buyers were motivated to make offers before the initial contract deadline for the tax credit last November. The data reflects contracts and not closings, which normally occur with a lag time of one or two months. Lawrence Yun, NAR chief economist, said excellent housing affordability conditions are drawing home buyers. “It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011,” he said.
“More importantly, a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery,” Yun said. Recent loan performance data from Fannie Mae and Freddie Mac clearly demonstrates very low default rates on recently originated mortgages, much lower that the vintages of 2002 and 2003 before the housing boom.
The PHSI in the Northeast jumped 19.6 percent to 71.3 in October but is 27.3 percent below the tax credit peak in October 2009. In the Midwest the index surged 27.3 percent in October to 81.7 but is 24.8 percent below a year ago. Pending home sales in the South rose 7.1 percent to an index of 93.8 but are 18.4 percent below October 2009. In the West the index slipped 0.4 percent to 104.3 and is 15.6 percent below a year ago.
Near term, Yun expects home sales will continue to climb from their cyclical low this past summer. “Even so, we now have some consumer concerns regarding the mortgage interest deduction, an important component in housing affordability,” he said. “Preliminary results of a new survey show nearly three out of four home owners and two out of three renters consider the mortgage interest deduction to be extremely or very important to them. Home owners already pay between 80 and 90 percent of all federal income taxes and additional tax burden would hurt them and the economic recovery, so we have a reasonable hope that it will not be changed.”
Source: NAR
Browse all of today's news
http://www.realtor.org/RMODaily.nsf/pages/News2010120201?OpenDocument
Real Estate thoughts for Mendocino County
In looking behind and ahead, I see that we are slowly working through the worst of the downturn... but there is still so much to go!
I have been approached by some who wonder if the housing prices will drop again by a large percent, but in looking to the counties South of us, we see that is not likely to be the case. Sonoma County's lowest price ranges have been stabilizing and increasing a bit (only because they reached a "false" bottom due to the foreclosures), which is a good indicator for us in Mendocino County. Also, our own lowest price ranges have been stablizing in Ukiah and Redwood Valley, and Willits shall not be far behind...
But, there are others who hope that when the foreclosures trickle towards a stop, we shall see prices go up again-- to that I say, IF prices go up at all, it shall be by a VERY tiny amount (unless the value is rebounding from being affected by a "false" bottom in the lowest price ranges), but that we shall have years before any significant increase in prices occurs.
So, does one buy now or wait? Depends on what someone is looking for, really. If the property they want is available and suits their needs... they can afford the payments and are not paying too "over the current market" for it, then I would say that purchasing is a good idea. If someone is only waiting for the "real" bottom to buy, then they run a high risk of waiting until the prices do start back up... but by that point in time, perhaps they will not find what they want before they are priced out? All depends on the supply of homes and what is available at what time. However, if there is nothing out there that a buyer wishes to jump at, then do not feel forced! That is truly not the way to buy a home... there will be other properties on the market in future, and perhaps one of those will be the "one" for you.
Yes, the bank-owned properties offer good buys on the market, but I have also seen multiple offers and frenzies to buy that have driven the price above what I would have considered a "great buy"... so be careful of not falling into the emotional trap of a bidding war.
Lastly, never lose sight of what you qualify for, but more importantly what you are comfortable with! If you qualify for $300,000 but feel more comfortable with payments at a price of $250,000... then try to stay as close to the $250,000 as possible. Ask your agent for sales comparisons to the property you have interest in-- but understand that the condition of these comparisons may be drastically different (they can look a lot different on paper and on the internet as compared to real life), and there may be a reason for a price difference...
The goal should be for a positive transaction that makes all happy or at least satisfied... and go ahead and ask questions along the way. You are not unintelligent for needing to ask questions! Maybe we do not always tell you, but we have to ask a lot of questions ourselves in this constantly changing market. :)
I have been approached by some who wonder if the housing prices will drop again by a large percent, but in looking to the counties South of us, we see that is not likely to be the case. Sonoma County's lowest price ranges have been stabilizing and increasing a bit (only because they reached a "false" bottom due to the foreclosures), which is a good indicator for us in Mendocino County. Also, our own lowest price ranges have been stablizing in Ukiah and Redwood Valley, and Willits shall not be far behind...
But, there are others who hope that when the foreclosures trickle towards a stop, we shall see prices go up again-- to that I say, IF prices go up at all, it shall be by a VERY tiny amount (unless the value is rebounding from being affected by a "false" bottom in the lowest price ranges), but that we shall have years before any significant increase in prices occurs.
So, does one buy now or wait? Depends on what someone is looking for, really. If the property they want is available and suits their needs... they can afford the payments and are not paying too "over the current market" for it, then I would say that purchasing is a good idea. If someone is only waiting for the "real" bottom to buy, then they run a high risk of waiting until the prices do start back up... but by that point in time, perhaps they will not find what they want before they are priced out? All depends on the supply of homes and what is available at what time. However, if there is nothing out there that a buyer wishes to jump at, then do not feel forced! That is truly not the way to buy a home... there will be other properties on the market in future, and perhaps one of those will be the "one" for you.
Yes, the bank-owned properties offer good buys on the market, but I have also seen multiple offers and frenzies to buy that have driven the price above what I would have considered a "great buy"... so be careful of not falling into the emotional trap of a bidding war.
Lastly, never lose sight of what you qualify for, but more importantly what you are comfortable with! If you qualify for $300,000 but feel more comfortable with payments at a price of $250,000... then try to stay as close to the $250,000 as possible. Ask your agent for sales comparisons to the property you have interest in-- but understand that the condition of these comparisons may be drastically different (they can look a lot different on paper and on the internet as compared to real life), and there may be a reason for a price difference...
The goal should be for a positive transaction that makes all happy or at least satisfied... and go ahead and ask questions along the way. You are not unintelligent for needing to ask questions! Maybe we do not always tell you, but we have to ask a lot of questions ourselves in this constantly changing market. :)
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