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Getting Ready to Sell? What to Fix and What to Skip

Thinking of selling your home?  Is now the right time?

That’s the question on homeowners’ minds as house prices just realized their largest annual gain since 2005. Congrats to those no longer “under water” on their mortgages, even as interest rates remain tantalizingly low. But here’s the catch: Those same higher prices can make buyers as choosy as a restaurant reviewer.

“A house with a $1,600 mortgage payment last year now has a $2,000 mortgage payment,” one broker told the Wall Street Journal. “Buyers are saying, ‘I better like it.'”

To increase your home’s “like” frequency, read on to see which upgrades are worth making and which are really not.  You may be surprised.

Worth It: A new front door. Strictly in terms of return on investment, a steel one topped the list of Remodeling magazine’s annual “Cost vs. Value Report for 2014” – recouping 96.6% of the average price. But, a fresh coat of paint can work wonders, too.

Not Worth It
: A home-office remodel. We know what you’re thinking: With so many more people working from home, wouldn’t it be brilliant to rewire the space for electronic equipment, say, and install commercial-grade carpeting? Not really. The magazine gave it the lowest return on investment (48.9%).  According to the study’s administrator, “Home offices don’t sell houses.”

Worth It: A back-up power generator. It’s the biggest gainer in the study, jumping 28% over last year, and plays especially well in areas brutalized by storms.

Not Worth It: Major bathroom work. “You could install the most spectacular jetted tub, and it still might not suit a buyer,” says Patsy O’Neill, a sales associate in Montclair, N.J. “Meanwhile, you’d have spent tens of thousands of dollars.”

Worth It: Roofing replacement. There’s a reason this ultimate “curb appeal” enhancer consistently makes Remodeling’s list and is up 11.2% over even last year: A roof is the first thing prospective buyers notice even before exiting their cars, and you can kiss that sale good-bye if yours looks like it’s been through hell.

Not Worth It: Major kitchen renovations. Again, the key word is “major,” and again it’s an issue of individual tastes.

Source: GAF

Related – Do it Yourself Storage

Related – Is Your Home Staged for Every Season? 

Reprinted with permission from RISMedia. ©2014. All rights reserved.

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Mortgages, Housing Starts & New Household Creations in 2014 – What You Need to Know.

housingmarketOver the past year, there has been a revival of single-family home production.  What does this mean for 2014?  Housing will continue its climb toward higher ground this year, but builders are still confronting several challenges, according to economists speaking at the National Association of Home Builders (NAHB) International Builders’ Show (IBS).

NAHB Chief Economist David Crowe explains that consumer confidence has returned to pre-recession levels and household balance sheets are on the mend.  Year-over-year household formations are on the rise and now averaging 620,000 compared to just 500,000 during the housing downturn.

At the height of the housing boom, the U.S. was producing 1.4 million additional households each year. Meanwhile, new-home sales are averaging just 8.7 percent of total home sales—barely half the historical average of 16.1 percent.  However, builders still face several headwinds, including rising building material prices, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and limited availability in labor and developed lots.

NAHB forecast for 2014:

• 1.15 million total housing starts in 2014, up 24.5 percent from 2013’s 928,000 units.
• Single-family production projected to rise 32 percent to 822,000 units and surge an additional 41 percent to 1.16 million units in 2015.
• 333,000 multifamily starts, up 9 percent from 306,000 in 2013.
• Single-family home sales are projected to hit 584,000 this year, a 35.9 percent increase above last year’s 430,000 sales.
• Residential remodeling activity is expected to register a modest gain this year over 2013.
• A slow and steady housing recovery will bring nationwide housing starts to 71 percent of normal by fourth quarter 2014 and 93 percent of normal by the end of 2015, says Crowe.
• On a state level, the top 20 percent of states will be back to normal production levels by the end of 2015, compared to the bottom 20 percent, which will still be below 84 percent.

mortgage-rates-300x300Mortgage rates up, but housing still affordable

As the economy strengthens and the Federal Reserve tapers its buy-back of mortgage-backed securities, there will be upward pressure on mortgage rates, but not enough to harm housing affordability, according to Frank Nothaft, vice president and chief economist at Freddie Mac.

Nationally, Nothaft expects that home sales and prices will each rise about 5 percent in 2014, and that housing starts will post a 20 percent gain.

“As we move into the 2014 home buying season, it will be a market dominated by home buying originations rather than refinance originations,” says Nothaft. “This will be the first time since 2000 that purchase originations will dominate the market.”

He says the reason for the change is because so many households looking to refinance have already done so, and as mortgage rates gradually rise, fewer homeowners will look to refinance. Further, purchase originations are expected to increase as the overall housing market strengthens.

Pent-up demand will fuel growth

In the aftermath of the Great Recession, there is a significant pent-up demand to form households and even to build homes.

At least 3 million fewer households formed over the past five years than would normally have been expected.  During this period, many college graduates were forced to double-up or move in with their parents. Stronger job growth and a strengthening economy in 2014 should lead to a rise in household formations, which will be important to supplement housing demand.

“I think this will be a pretty good year for home construction,” says Real Estate Expert and Economist David Berson. “There will be a big increase in single-family construction, but not as much for multifamily.”

For more information, visit www.nahb.org.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

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CONFESSIONS OF A REAL ESTATE JUNKIE/TOP 5 MEDIA TRENDS FOR 2011

Like many of us in this business I have been awe struck by the rate of decline in almost everything related to the housing industry over the last three years; existing homes sold, new homes built and purchased, mortgages sold, real estate agent commissions and of course the one that most directly impacts me and my business, the significant drop in advertising and marketing spend.  If this is any consolation,  books will be written (some already have been) about this period in time and we’ll all be able to say we witnessed it first hand.

There are plenty of people better qualified than I to predict how the 2011 American housing market will play out, so I won’t try to second guess them. Their forecasts range from more of the same (4.8M to 5.0M existing homes sold) to slightly more aggressive numbers, closer to 5.5M existing homes sold. The consensus is the recovery in housing will be tepid in 2011.

But there is less consensus around real estate marketing media trends for 2011 and so I’d like to further that discussion with my own predictions for the Top 5 Media Trends we’ll see develop in the coming year.

Top 5 MEDIA TRENDS FOR 2011

1. Common sense will return to the media market. Top Agents and Brokers recognizing that real estate always has been and always will be a hyper-local business, will stop following the larger crowd and decide instead to find ways to stand out from the crowd in  their very specific, very local market.

2. Local housing guides, especially color catalogs integrated with an online offering.  like The Real Estate Book and its companion website http://www.realestatebook.com  and other well executed products, will regain favor due to their hyper local characteristics and their ability to attract buyers and influence  prospective sellers to list their home with a market leader.

3.  Internet marketing will change radically. The idea that simply posting listings on large national sites is innovative marketing and that “if we post they will come” will be replaced with a smarter approach, better leveraging the real power of the internet.  Large sites today like Realtor.com and other popular sites like Zillow.com and Trulia.com get anywhere from 5 to 10 million unique users every month, which is amazing considering the lackluster pace of home sales this year, but lead generation from those users is low at between 1 and 2% of traffic. These sites can be a great research tool, but for whatever reason the medium just doesn’t engage people to take action, like send an email or make a phone call, to the same degree other mediums offer.

4.  Content marketing solutions, like http://www.brokersherpa.com  where Agents and Brokers are able to leverage their existing digital assets, like listing data mentioned above and  integrate it in a more meaningful way to intersect and engage with buyers and sellers as they are online searching in any of the major search engines or social media sites, will be a major trend for 2011.

5. Cost and return on investment will continue to be major drivers to media and marketing decisions as the housing market recovers, but at a slow pace in 2011. Commission dollars will still be tight and very precious. Every decision should have a measurable and productive outcome and top Agents and brokers will insist that the vendors they choose to work with can back up their claims with concrete results and reporting.

That’s my list for Top 5 MEDIA TRENDS for 2011. I”d love to hear your thoughts and invite you to  let me know if you agree and if not, how you might modify the list.

 

Happy New Year!

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