Owners: Be Smart When Financing Renovations

The number of homeowners who are planning to take on home improvement projects or repairs this year is expected to increase 6.7 percent, according to the Joint Center for Housing Studies at Harvard University. As more owners look to remodel, they should be weighing how to fund their renovations.

Homeowners may be using credit cards, even though they intend to pay for the balance as soon as it’s due, because they want the benefits of getting airline miles or other rewards from using the credit card, says Todd Nelson LightStream’s business development officer. But for those who don’t intend to pay the credit card off right away should realize the interest rates are usually in double digits and is not tax-deductable.

An option is a home equity line of credit, the interest may be tax-deductible and there are few upfront frees. Another consideration may be a cash-out refinance is another option, where borrowers refinance for more than what they owe on the property and then take the difference out in cash. However, processing fees and closing costs are involved.

Source: “More Homeowners Pay for Repairs With Credit Cards,” realtor.com® (April 26, 2017)

When Home Additions Hurt and Help Resale

The 2016 Remodeling Impact Report: Outdoor Features analyzes 10 common outdoor remodeling projects and found which ones are likely to add the most value to a home at resale. The study by the National Association of REALTORS® and National Association of Landscape Professionals (NALP) looked at at the reasons why home owners complete outdoor remodeling projects, the value of taking on such projects, and the increased happiness experienced by home owners once a project is completed.

Read the story by REALTOR® Magazine here or download the full report for more information. For highlights from the report, you can also download this infographic.

Remodeling Craze: More Owners Plot Projects

More Americans are staying put and renovating their homes this year. Nearly 28 million or 12 percent plan to move, down from 16 percent last year, according to the American Express Spending & Saving Tracker, a survey of more than 1,800 adults.

One reason why some are staying put this year is the majority view the housing market as a “buyer’s market.” Thirty-seven percent of those surveyed view the current market as a “buyer’s market,” compared to 25 percent who called it a “seller’s market.”

For those who do not plan to move this year, many owners are planning to renovate instead, with home renovation projects that are expected to average $4,100 this year.

Where are most Americans drawing their renovation inspiration? Home design TV shows, finds the survey. Thirty-seven percent of adults surveyed say that home design TV shows provide their biggest source of inspiration for home improvement projects, followed by online magazines, do-it-yourself-themed blogs, and social media.

Source: American Express Spending & Saving Tracker

Bet on These Home Improvements in 2015

So what seven home improvements made their list of the safest bets?

  1. Quartz Countertops: For years it was all about the granite counters, but it appears that quartz is all the rage these days for buyers. According to Redfin, quartz has experienced a huge increase since 2012, due to its durability and overall buyer granite fatigue.
  2. Smart Homes: While Smart Home design is overall still a niche with buyers, it’s a phrase that has experienced an explosion in listing mentions since 2012. Redfin agents caution that buyers really need to choose a smart home system with the most up-to-date software since smart home technology is rapidly evolving.
  3. Stainless Steel Appliances: This trend is here to stay, and it has only increased in popularity since 2011. According to a Redfin agent, stainless steel is “the gold standard for kitchens these days” and it appears to be a very safe home improvement bet.
  4. Fire Pits: Buyers are still interested in turning their backyards into relaxing areas with multiple focal points that encourages interaction and socializing, and adding a fire pit remains a popular upgrade.
  5. Tasting Rooms: In the high-end and luxury market, the term “tasting” has slowly increased in listings over the last five years. In the past, buyers hid their wine cellars away from the main focal point of the house, but these days they’re requesting tasting rooms that are adjacent to the main socializing rooms of the house, such as the kitchen and living rooms.
  6. Outdoor Kitchens: Along with fire pits, outdoor kitchens and multi-use backyard areas have only gained in popularity, especially for high-end buyers who mention socializing in the home as a priority. According to Redfin, “Backyards are becoming places to lounge during the summer, with full kitchens, fireplaces and televisions.”
  7. Freestanding Tubs: The days of the space-saving combined shower and tub are over, at least for luxury buyers. Redfin reports that the term “freestanding tub” has increased dramatically since 2011, as buyers want a bathroom that’s more reminiscent of a spa.

Source: “7 Home Improvement Projects That Are a Safe Bet for 2015,” Redfin (Feb. 4, 2015)

Report: Home Remodeling Is Surging

Home owners are remodeling their homes at levels that haven’t been seen in decades. In fact, the home improvement business could reach record levels this year, according to a new report from the Joint Center for Housing Studies of Harvard University.

What’s behind the increase? Potential trade-up home buyers are fixing up their existing homes for sale, federal and state subsidies are increasing the desire for energy-efficient upgrades, and landlords are sprucing up their properties to justify raising rents, the report notes. A strengthening job market is also helping to lead more home owners to take on home remodeling projects, following years of delaying projects.

Spending on discretionary home improvement projects jumped by nearly $6 billion between 2011 and 2013 — the first rise since 2007, according to the report.

The top remodeling projects continue to target the kitchen and adding a new bathroom, but baby boomers also are increasingly retrofitting their homes for better accessibility and with age-in-place features. Also, more home owners are tackling home projects centered on energy efficient upgrades, such as for windows and heating and cooling systems.

Source: “Remodeling Helps Lift Housing Industry,” CNBC (Jan. 29, 2015)

Most Popular Features of ‘Green Remodels’

Over the next five years, the number of remodelers who tackle more than 60 percent of their projects with “green” products is expected to double, according to a new study conducted by McGraw Hill Construction and the National Association of Home Builders.

High-performing, low-emissive windows are the most common green building product used by residential remodelers, according to a new survey by NAHB, which highlights the most common building features home owners are using to improve a energy efficiency.

The most popular green building features in the first quarter of 2014 were:

  • High performance windows, including Low-E and Argon gas windows
  • High-efficiency HVAC systems
  • Programmable thermostats
  • Energy Star appliances

Other popular features include ceiling fans, moisture-control products (such as bathroom fans), water conserving fixtures, and high-performance insulation.

“The improved availability and affordability of high-performing building products means energy-efficient features are being incorporated into more home improvement projects,” says NAHB Remodelers chairman Paul Sullivan. “Remodeling not only improves the overall layout and features of a home, but depending on the upgrades you choose, you can also save money on utilities, improve indoor air quality, and strengthen the long-term value of your home.”

Source: National Association of Home Builders

Which Home Improvement Projects Offer the Best Returns?

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report

“This year’s Remodeling Cost vs. Value Report shows the value of putting your home’s best façade forward, so to speak,” said National Association of REALTORS® President Moe Veissi. “Inexpensive exterior replacement projects are not only crucial to a home’s regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal.”

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

More information at source: NAR  http://realtormag.realtor.org/daily-news/2011/12/16/which-home-improvement-projects-offer-best-returns or visit our Placerville blog site www.sierraproperties.com

Home improvements that “Boost Resale Value”

When deciding which home improvements to make, many homeowners consider the amount of resale value the improvement may or may not make and compare that against the cost of the renovation.   Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.

The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems.  Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price will be discounted accordingly. 

Some minor replacements will produce big results for minimal cost.  Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference.  The same can be said for getting rid of any dated finishes, such as old wallpaper and brass light fixtures. 

Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully.  Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades – such as remodeled bathrooms – and focus on the fundamentals. 

Read the full story at: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/05/31 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

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