Renovations are mostly done not only for a home owner’s comfort but to add value to their home. However, in some cases, home owners may end up making their home worth less depending on what they choose to do.
MarketWatch recently featured some of the most common renovations for home owners that potentially could decrease the value of their home:
Eliminating a bedroom: Even if the home owner plans to remove a bedroom in order to expand another one or make a living space larger, this renovation project could burn them at resale. The more bedrooms a home has, the higher the price it usually can get.
Renovating the garage into living space: Getting rid of the garage space in favor of an extra office, family room, or bedroom can be a turnoff to many potential buyers at resale. For home owners who do choose to renovate the garage into living space, they may find leaving the garage doors on the outside a good move so that buyers could more easily convert the space back into a garage if preferable.
Removing closets: This renovation may made the home much more difficult to sell. We find people need closets and may count the number of closets per room.
See what remodeling projects offer the biggest paybacks at resale with Remodeling Magazine’s Cost vs. Value Report.
Source: “4 Renovations That Could Decrease Your Home’s Value,” MarketWatch (Nov. 16, 2015)
Average fixed-rate mortgages mostly remained unchanged this week as the 30-year fixed-rate mortgage continues to remain 4 percent, Freddie Mac reports.
Freddie Mac reports the following national averages for the week ending Nov.19:
- 30-year fixed-rate mortgages: averaged 3.97 percent, with an average 0.6 point, dropping from last week’s 3.98 percent average. Last year at this time, 30-year rates averaged 3.99 percent.
- 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, dropping from last week’s 3.20 percent average. A year ago, 15-year rates averaged 3.17 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.98 percent, with an average 0.5 point, falling from last week’s 3.03 percent average. A year ago, 5-year ARMs averaged 3.01 percent.
Source: Freddie Mac
The average home seller nets about a 23 percent gain in equity from the time they purchase their property – or about $40,000, according to the National Association of REALTORS®. But a closer look at the data reveals that sellers who purchased their home during certain volatile years tend to fare worse than others.
Home owners who purchased their home eight to 10 years ago—from 2005 to 2007, during the height of the real estate bubble—have earned just $3,000 or 1 percent in equity during that time, says Jessica Lautz, NAR’s managing director of survey research and communication. Those home owners may show the most reluctance to sell their homes, and that may be adding to the inventory shortage in many cities, Lautz says.
Take a closer look at NAR’s latest profile of buyers and sellers report at the breakdown below to see who fares the best in the equity picture:
Source: “If You Bought Your Home During These Years You’re Really Hurting,” realtor.com® (Nov. 17, 2015)
Investors are wondering where to invest their money next? The opportunities for flipping houses or purchasing rental homes are starting to dwindle, but there’s another option that could be fruitful: investing in land. With the economy on the upward trajectory, land is rising in demand.
At the 2015 REALTORS® Conference & Expo in San Diego, Jeramy Stephens of Mossy Oak Properties offered profitable options for land investment? Find out what they are.
Or, contact us, we’ll put our 70+ years experience to work for YOU!
The Department of Housing and Urban Development is inching closer to making public housing completely smoke-free.
Last year, HUD announced its intention to ban properties of having tobacco-based products, saying the dangers of second-hand smoke prompted such action.
HUD Secretary Julián Castro and Surgeon General Dr. Vivek Murthy announced a proposed rule this week to make the nation’s public housing properties completely smoke-free. If approved, that would require 3,100 public housing agencies to ban smoking within 18 months. The agencies would be required to initiate policies that prohibit lit tobacco products in all living units, indoor common areas, and all outdoor areas within 25 feet of housing and administrative office buildings.
HUD is currently seeking public comment on the proposed rule for the next 60 days.
Source: “HUD Is About to Ban Smoking in Housing,” HousingWire (Nov. 12, 2015)
The 30-year fixed-rate mortgage is getting closer to moving over 4 percent, as mortgage rates climb for the second week in a row. Freddie Mac reports that fixed-rate mortgages are rising in anticipation of a possible rate increase by the Federal Reserve and a recent strong jobs report. Please provide comments about this and your local area!
Freddie Mac reports the following national averages with for the week ending Nov. 12:
- 30-year fixed-rate mortgages: averaged 3.98 percent, with an average 0.6 point, rising from last week’s 3.87 percent average. Last year at this time, 30-year rates averaged 4.01 percent.
- 15-year fixed-rate mortgages: averaged 3.20 percent, with an average 0.6 point, increasing from last week’s 3.09 percent average. A year ago, 15-year rates averaged 3.20 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 3.03 percent, with an average 0.4 point, climbing from last week’s 2.96 percent average. A year ago, 5-year ARMs averaged 3.02 percent.
- 1-year ARMs: averaged 2.65 percent, with an average 0.2 point, increasing from 2.62 percent last week. A year ago, 1-year ARMs averaged 2.43 percent.
Source: Freddie Mac
Home owners may struggle to keep warm this winter. About 90 percent of existing homes lack enough insulation, according to newly released research from the North American Insulation Manufacturers Association.
“If all U.S. homes were fitted with insulation based on the 2012 International Energy Conservation Code (IECC), residential electricity use nationwide would drop by about 5 percent and natural gas use by more than 10 percent,” says Jonathan Levy, professor of Environmental Health at Boston University School of Public Health and lead researcher on the Boston University team.
“The fall is when many home owners around the country begin thinking about home improvements to increase comfort and reduce their energy bills as temperatures drop come winter,” says Curt Rich, president and CEO of NAIMA. “Research like this should reinforce our message to homeowners, and to policymakers, that added insulation has real and significant benefits.”
Source: “Ninety Percent of U.S. Homes Are Underinsulated,” BUILDER Online (Oct. 5, 2015)
Rising home prices over the last few years are finally putting more money back into home sellers’ pockets. Home owners who sold during the third quarter saw an average price gain of $40,658 – or 17 percent – from the purchase price of their property – the highest average price increase for sellers since the third quarter of 2007, according to RealtyTrac’s Third Quarter 2015 U.S. Home Sales Report.
“An increasing number of home owners in 2015 have been cashing out the home equity they’ve gained during the housing recovery of the past three years,” says Daren Blomquist, vice president at RealtyTrac. “That may be a good decision because the data points to a plateauing market going forward. Home price appreciation is slowing, a trend that will continue if interest rates rise in the coming months as expected. Meanwhile the threat of rising interest rates combined with lowered premiums for buyers using FHA loans is spurring more demand.”
Its analysis of 171 counties nationwide is at: RealtyTrac
The wrong paint color can be a big turn-off to potential home buyers. House Beautiful recently highlighted some of the worst mistakes home owners can make when it comes to painting their house, including:
1. Painting a ceiling a flat white color. “I never paint a ceiling dead white because all white paint has a bit of gray in it, and it takes the room down,” designer Athalie Derse told House Beautiful. Instead, she suggests choosing a cream shade.
2. Too many colors from room to room. “Even when I don’t use the same colors everywhere, I still like the rooms to feel connected,” designer Mona Ross Berman says. “The bedroom should never feel like it’s in a completely different house than the living room. The whole house has to make sense as one.”
3. Using the same color palette for the entire house. On the flip side, home owners who only stick to one color palette may be making the home too bland. “A two-color scheme can be great, but there has to be some relief, or it comes across as too pat and makes everything seem stiff,” says designer Tom Scheerer.
4. Matching. “You never want to match your walls to a color in one of your fabrics,” Sallie Giordano says. “It will be too strong. Find a grayed-out version of the color.”
5. Use neutrals to balance out color. Some home owners may be tempted to go overboard with one color. “The biggest mistake people make when they’re trying to be colorful and exciting is to forget that you need to balance it with neutrals,” says designer Todd Klein. He adds that architectural elements in white or even a few gray throws can give visitors’ eyes a place to rest.
Source: “The 9 Paint Color Mistakes You Should Never Make,” House Beautiful (August 2015)
Concrete cracks are common and not necessarily cause for alarm. Builders use concrete a lot due to its strength, durability, versatility, and affordability. But it does have a propensity to crack and often there’s nothing the home owner could have done to avoid it.
“Given enough time, weather and wear, your concrete will eventually develop at least a hairline crack – or multiple cracks,” according to a new article that breaks down the cracks in concrete at Houzz.com. “There are many forces that lead to cracking, some of which can begin to appear only hours into the drying process.”
Cement can crack for various reasons such as soil upheaval, expansion and freeze-and-thaw cycles. Hairline cracks in concrete are common and can’t likely be avoided either.
As for any concerns, home buyers should get all property cracks thoroughly investigated. We would start with a home inspection report and ask for their recommendations.
Source: “Why Concrete Wants to Crack,” Houzz (October 2015)