Q: We've just put in a ton of work on a new kitchen, and now it's time to sell. How much can we actually recoup from our expense?
A: Here is a link to the Remodeling Magazine Cost -VS- Value Comparison Tool. It lists costs for all areas of the US, and you can look at moderate or fancy remodels. It's lots of fun to figure out which improvements will give you the best return on your dollar. It also helps you to understand that when pricing your home, you can't expect to wring every penny out of your remodel. It will, however, make your home more attractive, and it should sell more quickly!
This site compares the average cost for 35 popular remodeling projects with the value those projects retain at resale. To find data for any of 81 cities:
1. Click a region on the map or choose from the drop-down list.
2. Click on a city in the map (requires flash) or from the drop-down list.
3. Click the Download button for a PDF with city data.
For more information about individual projects:
1. Click on a project name to see a description and a 3-D model.
2. Sort any column by clicking on the column header.
3. For more information on the Remodeling 2013 Cost vs. Value Report, click on any of the links listed at right.
Thanks to Remodling Magazine for their research on this great article.
NOW is a wonderful time to sell your house!
Time to Reality Check the Real Estate Market
by OB Jacobi
Rarely does a day go by that I don’t get asked if this is a good time to buy and/or sell a home. Some people might think that my response is always an emphatic “YES!” because I work in real estate. But in truth, there is no right or wrong answer. Every person’s circumstances are unique, so in some cases the answer might be yes, but for others it might make more sense to wait. Allow me to explain.
The good news is that we’re finally coming out of the housing slump of the past five-plus years. Housing is a major driving factor of the U.S. economy, so regardless of whether or not one owns a home, a stronger housing market is good for everyone. For some would-be home sellers, this positive momentum, combined with a rise in home prices and buyer activity, is enough to compel them to list their home. And right now the statistics appear to be on their side.
According to the most recent findings from the National Association of REALTORS®, total housing inventory has fallen for the past several months, settling at just under two million existing homes on the market that are available to buyers. This represents about a four-month-supply of homes throughout the U.S. This is the lowest housing supply the nation has seen since May of 2005 – during the peak of the housing boom.
“Months supply” basically means that if existing homes were to continue selling at the current rate, the inventory of homes would be sold by that many months. A “normal” market usually has around six months of supply; therefore lower numbers mean a shortage of inventory. If demand is greater than supply, this often leads to competition amongst buyers – and rising prices – as we’ve seen in many markets throughout the Western U.S.
Here are the current inventory levels in key markets along the West Coast, all of which fall below six months of supply and report strong competition among buyers.
· Seattle: 1.4 months
· Portland: 4.2 months
· San Francisco: 1.8 months
· Las Vegas: 3.8 months
· Palm Springs: 2.5 months
The following graph demonstrates the downward trend in the overall U.S. month’s supply of homes which is currently at about 4.4 months:
So what does this mean for buyers and sellers? It means as long as inventory levels remain low, competition amongst buyers will remain high, and home prices should continue to steadily rise – albeit at a healthy rate – not like what we saw during the housing boom. As evidence of this, in the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1 percent increase in home values by the end of 2013. And in a recent report by the National Association of REALTORS®, median home prices last quarter showed the strongest year-over-year increase in seven years.
Another thing that buyers and sellers need to keep their eye on is interest rates and their impact on affordability. Interest rates have been at such historical lows for so long that it’s easy to take them for granted. But the truth is that several lending institutions, including Freddie Mac and the Mortgage Bankers Association, project that interest rates will rise from 3.4 to 4.4 percent by the end of 2013. A full point increase can have a significant impact on the amount of your mortgage over the long term.
Assuming a 30-year-mortgage at a 3.4 percent interest rate, a home valued at $360,000 in today’s market would have a monthly payment of $1,596.53. If prices rise by 3.1 percent and interest rates rise to 4.4 percent, as both have been predicted to do in the coming year, that same home would be worth $371,160 and have a monthly payment of $1,858.62 (see chart below). This is a difference of $262.09 per month – $3,145.08 annually – and $94,352.40 over the life of the loan. That’s not chump change.
With these types of projections, one might wonder why there isn’t a flood of homes coming on the market. The biggest concern I hear from many would-be sellers is that they’re going to lose money because their home is worth less today than when they bought it. A valid concern, to be sure, but not necessarily the case for many folks. Remember, you’re buying and selling in the same market conditions, so if your home has lost value in recent years, it is highly likely that the next home you buy has as well.
I recently spoke to a friend of mine who wanted to sell but was afraid of losing money. He bought his Seattle-area home back in 2002 for $275,000. Over the next five years the market boomed and by 2007 his home was worth about $430,000. During that time, homes in many areas around Seattle appreciated by over 55 percent. Then the housing market crashed – and with it so did home prices. In my friend’s mind he lost $155,000 and now he thinks he should wait to sell until he can gain all that loss back.
Today, my friend’s home is worth about $327,000 – a gain of $52,000 over what he paid in 2002. If experts are right about an annual gain of three percent in the coming years, he will have to wait 10 years before his home is worth what it was during the peak of the market in 2007. My advice to him? If it’s the right time to move and you can afford to do it, go for it, but don’t base your decision on numbers that were the result of an artificially inflated market.
It goes without saying that nobody wants to sell at the bottom of the market, yet at the same time, everybody wants to buy at the bottom. Obviously these two scenarios can’t exist at the same time, but I hope the information in this blog shows there are definitely opportunities to be had by both buyers and sellers that are worth considering.
Click link for more info!
The rebound in the residential real estate market continued in September, according to new data from the Regional Multiple Listing Service.
In the Portland area, 1,894 homes sold in September, a 19 percent increase from September last year. The average sale price climbed nearly 5 percent to $281,400. Median price increased 3 percent to $238,300.
The average home spent 102 days on the market, a 22 percent decrease.
The only negative data point: The number of new listings (2,451) declined 2 percent compared with last year and nearly 21 percent compared with August.
As expected the market took an expected seasonal dip from August, which is one of the strongest months for home sales due to mild weather and school vacations.
Closed sales declined 18 percent from last month, when 2,311 homes sold.
There is now a 4.6-month inventory of homes on the market, down from a 6.7-month inventory last year. That means if no additional homes were put up for sale it would take 4.6 months for every house to be sold. A six-month inventory is considered healthy or a balanced market.
Source: Portland Business Journal
Home prices, including distressed sales, rose 4.6 percent nationwide in August compared to a year earlier, the largest year-over-year increase since July 2006. The August increase marks the sixth-consecutive monthly home price increase.
In the Portland-Vancouver-Hillsboro metro area, home prices, including distressed sales, were up 4 percent in August compared to a year earlier and up 1.1 percent compared to July. In SW Portland, the area that runs from downtown to Beaverton, and south to Tigard, prices were up over 8%.
If you'd like to know what's happening in your neighborhood, check in at caryperkins.com. I'll keep running statistics available so you know when it's time to go!
The National Association of Realtors has released the following stats for the 2nd quarter of 2012. I continue to be busy, but never too busy to help someone new.
Everyone seems to be asking their professional Realtor’s prediction is on where home values are headed.
To answer this question I want to quote three separate reports that have been published in the last 60 days: the Home Price Expectations Survey (HPES), the Urban Land Institute Real Estate Consensus Forecast (ULI) and the Demand Institute’s Report (DIR): The Shifting Nature of U.S. Housing Demand. Here are their projections:
A slow but steady return is projected by all. If you plan to stay in your house for 5 years, you can expect appreciation - not like the good old days in the rush, but a good, modest growth at a pace that’s a welcome relief after the last few years.
With thanks to the KCM Blog.
Maybe you think Realtors are being optimistic when we say that the market is coming back. We are, I believe, optimists by nature. This job isn’t for the faint of heart, especially in the last few years when up to 40% of the Realtors left the business. But here is Barrons joining in our argument that we are on the mend.
Not only that, the article predicts 30% growth in the next 10 years. Payback. If you were waiting for the bottom, wait no longer. Let’s go house shopping.