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Thursday, January 31, 2013

Peaks and Valleys of House Hunting Online

In general, the most popular times of year for online home searches are at the start of the year and in the summer, according to the Trulia Real Estate Search Report released Wednesday.
However, Trulia reveals some fluctuation across the country with a major tendency for online searches to peak when the weather is warm and dry.
“Local weather patterns have a big impact on when people search for homes online,” said Jed Kolko, chief economist for Trulia.
“Search activity in warm-winter states, like Florida and Hawaii, peaks in January and February. But for most of the country, search traffic is highest in March or April, especially in regions where summer brings rain,” Kolko explained.
Nationally, online real estate searches pick up at the start of the year, peak in March or April, and then reach a lull in May.
Searches peak again in June and July and then taper off toward the end of the year.
Overall, December is the slowest state for online searches, according to Trulia’s data.
To zero in on statewide trends across the country, Trulia reviewed search patterns from 2007 to 2012, removing the upward trend to observe whether search activity in a particular month is above or below the annual average for each state.
In January, search activity in Hawaii and Florida is 10 percent higher than the annual average for each state.
Several states reach their search peaks in either March or April—32 states between the two months.
Southern states generally experience their busiest search months in the July. Mississippi is the only state to peak in June.
Montana and Oregon have the latest search peak months—August for both.
No states peak between September and December. In fact, according to Trulia, all states are at least 10 percent below their annual search average in the month of December.
Understanding these statewide trends can benefit both buyers and sellers, according to Kolko.
“Buyers and sellers can use these ups and downs to their advantage,” Kolko said. “Sellers looking for the most buyers should list when real estate search traffic peaks.”
On the other hand, “[b]uyers, however, should think about searching off-season, when there is less competition from other searches,” Kolko said.

Wednesday, January 30, 2013

Remodeling Projects That Yield the Greatest ROI


A lot of homes can use a facelift, especially properties in distress, but some projects may not be worth the sweat and dollars when considering the return on investment (ROI).
Based on results from the 2013 Remodeling Cost vs. Value Report, the National Association of Realtors (NAR) revealed exterior projects will typically yield the highest ROI.
“Projects such as siding, window and door replacements can recoup more than 70 percent of their cost at resale. Realtors know what home features are important to buyers in your area and can provide helpful insights when considering remodeling projects,” said NAR president Gary Thomas, broker-owner of Evergreen Realty in Villa Park, California.
The report found replacing a door with a steel entry door anticipates the most return, with an estimated 85.6 percent of costs recovered upon resale. On average, the report found a steel entry door replacement is costs about 1,137 on average.
However, an article from House Logic, NAR’s consumer website, warned the lifespan of a steel door is generally shorter than fiberglass or wood doors.
The project that would reap the next highest return is a wooden deck addition. The project is estimated to recoup 77.3 percent of costs upon sale, but project expenses should average $9,327.
Replacing a garage door ranked third, with 75.7 percent of costs expected to be recouped and a lower average cost of $1,496. While most of the high-ranked projects were exterior, a minor kitchen remodel is expected to yield the fourth highest return of 75.4 percent. The average cost for this project is $18,527.
Wood replacement windows were No. 5, with 73.3 percent of expenses expected to be recouped, along with an average cost of $10,708.
Other projects expected to yield at least a 70 percent return were attic bedroom (72.9 percent), vinyl siding replacement (72.9 percent), vinyl window replacement (71.2 percent), and basement remodel (70.3 percent).
In general, projects involving additions, with the exception of decks, were expected to cost the most, while the returns were not as high. Among the additions, a two-story addition ranked the highest, but costs an average of $152,470 and yields a return of 65.4 percent.
Home office remodel (43.6 percent) and sunroom addition (46.5 percent) are expected to recoup the smallest return.
However, before tackling a project based on the report, Thomas advised consulting a Realtor to decide what improvement projects will provide the most upon resale in a homeowner’s specific market.
“Each neighborhood is different, and the desirability and resale value of a particular remodeling project varies depending on where you live. When making a home remodeling decision, resale value is just one factor that homeowners should take into consideration,” he added.
The report is completed in cooperation with NAR and compares construction costs with resale values for 35 midrange and upscale remodeling projects in 81 markets across the country.

Friday, January 25, 2013

Prices, Sales Improve in Largest Counties in December


Out of the 42 largest counties in the nation, all 42 exhibited price growth on a monthly, yearly, and quarterly basis in December, according to DataQuick’s monthly Property Intelligence Report (PIR).
DataQuick’s PIR assesses the housing market based on valuation trends, REO inventory trends, and sales trends.
In addition to positive price growth in all 42 counties, sales also showed substantial growth in December. Month-over-month, December sales increased in 32 out of 42 counties, up from just 13 counties in November.
Over the last year, sales were up in 38 counties in December compared to 25 in November. On a quarterly basis, sales improved in 12 counties, up from 7 counties in November.
While home prices and sales improved, VP of analytics for DataQuick Gordon Crawford, Ph.D., noted foreclosures worsened compared to November.
“Several fiscal uncertainty factors including debt limits, proposed tax increases and spending cuts may lead to further weakening the housing market,” he added.
In December, foreclosures increased month-over-month in 26 out of 42 counties, up from 18 in November. Over the last quarter, foreclosures were up in 27 counties compared to 22 in November. Over a one-year period, foreclosures rose in 21 counties in December compared to 13 in November.
“Although foreclosures continue to affect the market, a stabilizing labor market situation has contributed to strong home prices and sales growth over the last year,” Crawford said.



Thursday, January 24, 2013

4 Ways to Hater-Proof Your Home, Before You List It


In my experience, there’s one fundamental truth about haters:  you can never fully escape them. The only way to live a 100% hater-free life is to never stick your neck out, and never do anything because, as the saying goes, you simply cannot please all of the people all of the time.

And this is particularly true with real estate and putting your home on the market - because homes, locations, aesthetics and such are so much a matter of personal preference, some people will find something to criticize about even the most perfectly staged, priciest properties on the market.  

As a home seller, your job is not to try to make your home be all things to all people.  That said, you don’t want to be the house that nearly every buyer and broker sees, rolls their eyes and utters the same few, predictable deal-killing criticisms. Fortunately, what is predictable is avoidable. Let’s explore the most common things buyers hate about listings they see. In the process, you’ll get equipped to sidestep those issues and, in large part, hater-proof your own home.

House Hater Complaint #1:  Odors. Some of you might think I’m beating a dead horse, here. But as long as house hunters keep emailing me to ask why, in the name of all that is sacred, they keep seeing homes that smell like all sorts of madness and mayhem, I’m going to keep repeating this message. 

Viewing a home sounds like it’s all about the visual of the experience. And visuals are critical - your home should be in its Sunday best, so to speak, when it’s being shown, in terms of being spruced, staged and clutter-free. But when a buyer comes to see your home, they don’t turn off the rest of their senses. And there is nothing that can turn a buyer off from a home, they’d otherwise like, quicker than a powerfully bad odor - in particular, cigarette and pet odors in a house that seems to have been well-cleaned create the concern that they might be permanent and that the buyer might not be able to get rid of them without dropping some serious cash on cleaning or even removing wall, window and floor coverings.

If you are a seller and you know that someone has been habitually smoking in your home or that you have had a “challenge,” let’s say, with pet accidents, do not ignore the problem. And do not think that because you had the carpet shampooed or the drapes cleaned, or because YOU can’t smell anything, that the problem is gone.  The fact is that the human sense of smell very quickly gets used to smells that it lives with or is surrounded with on a regular basis.  So it’s critical to get your agent, stager or even your friends and family members - who don’t live with you and love you enough to be honest! - to help you detect bad smells and odors, and make sure they are eradicated by any means necessary, before you place your home on the market.

House Hater Complaint #2:  Glaringly extreme overpricing. There’s the kind of overpricing that makes a buyer say, “Hmmm - seems a bit high. Let’s go see it, but we might have to offer a little less than the asking price if we like it.”  Then there’s the kind of overpricing that makes buyer say “I’ll wait until a price reduction” or worse, hold their sides from laughing. 

When overpricing is glaring, many buyers and buyer’s brokers will comment on it or inquire about it. What they are less likely to do is actually come out and see the place - especially if they weed it out online after comparing its specs to all the other homes in the area and the price range.  Often, homes this severely overpriced simply don’t sell, or not until after they’ve had some serious price cuts or have been on the market so long buyers begin to feel confident about making lowball offers.

In fact, the goal is the opposite - you want your home to stand out as a property that is not dirt cheap, but does present a good value for the money - that’s what motivates buyers to get out of their chairs and into the property for a viewing.

Here’s how to hater-proof your home’s listing against this issue: fixate on the comps. Smart sellers deactivate their emotional attachment and very human tendency to overvalue their precious homes by poring over the sales prices (not list prices) of similar, nearby homes that have recently sold. Your agent will be happy to help you walk through this data and will almost certainly recommend a list price, but ultimately you make the decision about the price point to list your home at.

Also, consider using your broker’s first Open House as an additional hater-proof measure: if the agents overwhelmingly comment that they think the home is significantly overpriced, listen.

House Hater Complaint #3:  Dirt and messes. Possibly the single largest source of House Hater Complaints I’ve ever heard are the dirt, messes, piles and personal belongings that buyers find so distracting, when they walk into a home for a viewing or Open House. Obviously, homes that are filthy from floor to ceiling are fertile fodder for haters, but often those homes are bank-owned or otherwise distressed so that the sellers aren’t likely to do much.  What is underestimated is how often even savvy home buyers are distracted (and disgusted) by relatively clean homes that just have a few outstanding messes, like piles of dirty dishes in the sink, piles of dog poo in the yard or even piles of papers, mail, books or clothes lying out in plain view.  

Will one or two such items ruin the sale of your home? Perhaps not. But a few of them (or more) can certainly distract a buyer enough that they fixate on your messes and, in the process, fail to see what is so great about your property.  And as I see it, cleaning up, meticulously, before every single showing is free - so it makes no sense to even run the risk of turning off a prospective buyer by letting messes get in the way of their ability to visualize themselves and their families flourishing in your home.
  
House Hater Complaint #4:  Lots of little malfunctions.  All of us tend to think our homes are in fantastic condition.  After all, you have the furnace maintained regularly, you’ve got granite and dual paned windows - maybe you even had the floors refinished or the walls painted in preparation for putting your place on the market. 

That’s all fantastic - all the non-cosmetic work you’ve done to maintain and improve your home should be trumpeted in your marketing materials, and the cosmetic items will (or should) speak for themselves. But here’s the thing: buyers who visit your home won’t be running your dishwasher or testing the furnace (at least not until inspections).  What they will do - almost unconsciously - is:
    •    flick light and fan switches
    •    open or close window coverings, closet, room and entry doors, 
    •    open and close drawers, cupboards, gates and fences and
    •    hold the handrails as they walk up and down the stairs.  
They will hear leaky faucets and point out water spots from long-ago repaired leaks, and they will notice (or potentially trip on) uneven exterior tiles, paths and walkways. And even though these items might be vastly less expensive to fix than the roof or sewer line you had replaced, they are much more visible and noticeable to a buyer.  In fact, buyers don’t always even know that the little malfunctions and repairs that need doing are little or inexpensive. And when they notice a bunch of these sorts of things in a single property, they can jump to the conclusion that the whole place is rickety. 

Since these little fixes are inexpensive to make, have them completed before you list, if at all possible. You might even ask your agent to walk through the property with you and to give you a handyperson reference for someone they know works efficiently.