Cool Home Features That Can Deter Buyers

Cool Home Features That Can Deter Buyers

Several amenities that often are viewed as favorites by home by owners may actually make the home more difficult to sell. Realtor.com® recently highlighted a few “awesome features” that surprisingly can limit your buyer pool. Such as:

• Nearby retail. Some buyers will be drawn to restaurants and bars within walking distance as well as easy access to major thoroughfares. But unless the area is mostly urban, sellers may find it a more difficult sale since not everyone wants to live near a busy street. “Homes that are on busy streets command less value than interior homes,” says Bob Ripp, a real estate appraiser in Fort Collins, Colo.
• A swimming pool. In some warm-climate cities, an in-ground pool is practically a necessity. But in mild or cold climates, swimming pools don’t always give sellers an advantage. “There are several instances where pools detract from the home,” says Ripp, such as when it requires significant maintenance compared with the amount of year it is usable.
• Big renovations. Home owners who over-improve their homes may also not see a big pay off in the end. If no other homes in the neighborhood has features like high-end granite countertops or the fancy landscaped yard, home owners may not see their high-end upgrades as appreciated when they go to sell. They may price themselves out of the market or some buyers may not be drawn to the fanciest home on the block.

• Big – or small – backyard. A giant backyard may be great for the home owner but some buyers may not want the extra maintenance. On the other hand, if the backyard is too small – particularly with zero privacy and barriers — some buyers may overlook that too. “The size of the yard can be a very big factor,” says Amy Cook, a real estate professional in San Diego. “Some people actually don’t want any maintenance and prefer to have a very small yard. Others want a yard for their kids or want privacy. … Many homes get nixed because of the lack of privacy with other houses right beside it.”
• Tile flooring. Tile floor can be one of the most difficult flooring types to remove and it can turn off some buyers. “Tile is very difficult and expensive to change, and often what owners choose just isn’t very attractive,” says Cook. “Basic white, dated tile is usually a big turn-off for buyers.”

Source: “7 Awesome Features That (Surprise!) Might Make Your House Harder to Sell,” realtor.com® (Oct. 19, 2015)

For Owners: Best Time to Remodel Is Now

For Owners: Best Time to Remodel Is Now. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

As home values continue to rise, more home owners may find now is the best time to add to that value even more. Spending on home remodeling is expected to climb from 2.4 percent in the second quarter to 6.8 percent by the second quarter of 2016, according to Harvard University’s Joint Center for Housing Studies.

“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains and sales,” says Chris Herbert, managing director of the Joint Center. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components such as roofing and siding.”

Sellers are already diving into more remodeling projects and using some of the equity in their homes to fund the projects. Black Knight Financial Services reported an increase in cash-out refinancing this summer – a 68 percent jump in the second quarter year-over-year, and it’s now at the highest level in five years.

Also with interest rates still low – for now – some home owners may be rushing to do projects before interest rates go up, says Matt Proper of Freeman Builders in Washington, D.C.

With spending in the repair and remodeling industry expected to grow to $300.5 billion in 2016, much of that spending will be in small, discretionary projects, such as kitchens and bathrooms, according to John Burns Real Estate Consulting.

The consulting firm projects home price appreciation to be 4.2 percent next and estimates that each 1 percent of real appreciation will lead to 1 percent incremental higher average project size for big and small projects and a 1 percent increase in average small project spend per remodel.

Source: “New Kitchen? New Bathroom? Why the Time Is Now,” CNBC (Oct. 16, 2015)

Top 3 Reasons Why Americans Want to Own

Top 3 Reasons Why Americans Want to Own. Image courtesy of digitalart / FreeDigitalPhotos.net

The top reasons Americans say they want to own a home: The opportunity to build equity, the desire for a stable and safe environment, and the freedom to choose their neighborhood. That’s according to the National Association of REALTORS®’ 2015 National Housing Pulse Survey, a poll of 1,000 adults nationwide in the 50 largest metro areas.

More than eight in 10 Americans say that purchasing a home is a good financial decision, and 68 percent say now is a good time to buy a home, according to the survey. What’s more, 71 percent of those surveyed also believe they could sell their house for what they paid for it –up 16 percentage points from 2013.

“Home ownership is part of the American Dream, and this survey proves that dream is alive and thriving in our communities,” says NAR President Chris Polychron.

But some obstacles remain. Seventy-eight percent of respondents say college debt and student loans are the main barriers to them in making a home purchase affordable. Seventy-six percent of those surveyed say they have a full-time job but still do not make enough money to purchase a home, and 74 percent say they do not have enough money for a down payment and closing costs. A growing number of respondents are also concerned about climbing housing costs: 41 percent call the lack of affordable homes a “very big” or “fairly big” problem in their area – an increase of 9 percent points from 2013.

Source: National Association of REALTORS®

Real Estate’s Hot New Sector: Storage Units

Real Estate’s Hot New Sector: Storage Units. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

It’s a good time to be in the storage unit business: Rents are rising, vacancies are limited, and competition has been muted due to limited new construction, The Wall Street Journal reports.

Storage unit companies are finding business is booming at a time when other commercial real estate sectors are still mostly flat. Investors are buying up shares in storage unit companies too; Extra Space Storage Inc. saw its stock rise 33 percent in the past year. The Salt Lake City-based company reports that 94.5 percent of its space was occupied at the end of the second quarter, up from 92.1 percent one year prior. Public Storage, which is the largest publicly-traded storage firm, reported a 7 percent increase in rental income year-over-year.

Seeing opportunity, some investment firms are rushing to complete new projects, although storage facilities tend to take years to build. For example, Carlyle Group LP is spending $80 million to build new facilities in Southern California, the Pacific Northwest, and elsewhere.

The industry’s stability may be thanks to the fact that storage space is in demand in good times and bad. Some in the industry use the 4Ds—death, divorce, downsizing and dislocation—as reasons consumers might utilize their services. Because these events aren’t necessarily tied to the economic cycle, the industry “isn’t recession-proof, but it is recession-resistant,” says Ryan Burke, an analyst at real-estate research firm Green Street Advisors.

Source: “Need to Store That? Booming Self-Storage Industry Says No Problem,” The Wall Street Journal (Oct. 13, 2015)

5 Common Buyer’s Remorse Culprits

5 Common Buyer’s Remorse Culprits. Image courtesy of cooldesign. / FreeDigitalPhotos.net

Some home buyers suffer from post-purchase regret. Realtor.com® recently spoke to real estate industry experts to find out what home features tend to spark the biggest regrets among buyers. Topping the list:

1. Buying too big of a home. Buyers may think at the time having a big home is what they want, but after moving in, they may later regret the expense and upkeep of maintaining a big home. Cooling and heating bills can be much higher and just cleaning the place can become a much bigger chore. Also if the room size is big, buyers may find their furniture a mismatch and too small. Urge buyers to bring a tape measure to verify their furniture would work in the space and also to consider the utility bills.

2. Awkward layouts. The kitchen island is often a desirable amenity among home buyers – it can add prep space, after all. But “kitchen islands can be a mistake if you don’t take your ‘work triangle’ into account,” Baumbusch says. She urges buyers to walk around the kitchen and consider their usual prepping and cooking patterns.

3. Not considering what’s missing. Architects and remodelers sometimes will remove something from a room to give it a more modern, cleaner feel. For example, “there is a trend to eliminate the bathtub in favor of just a shower,” Baumbusch says. “Some home owners regret that decision because sometimes they find themselves wishing for a nice long soak after a tough day.”

4. Pools. For some home buyers, the pool can become a selling-point that later turns into a source of regret. Pools can be costly and some buyers may fail to consider the all of the additional costs. For example, there’s regularly monthly maintenance and cleaning as well as pools in seasonal areas often are opened and closed by a professional. “It can cost upward of $600 just to open a pool and prepare it for swimmers,” Baumbusch says.

5. Falling for fads. “Today’s popular ice-white appliances, steel countertops, and Edison bulb light fixtures are yesterday’s saloon doors, linoleum, and brass hardware,” realtor.com® notes. “If you buy a house just for its trendy look, you may end up regretting it when the styles change, especially if you have to sell the outdated design.” Baumbusch recommends buyers look for timeless features – classic, well-designed homes.

Source: “Skip the Pain: 7 Things That Will Fill You With Buyer’s Remorse,” realtor.com® (Oct. 12, 2015)

Savings Have Dried Up for Most Americans

Savings Have Dried Up for Most Americans. Image courtesy of fantasista / FreeDigitalPhotos.net

Here’s why saving for a down payment on a home purchase is a growing challenge for many Americans: About 62 percent of Americans have less than $1,000 in their savings accounts, and 21 percent don’t even have a savings account, according to a new survey of more than 5,000 adults conducted by Google Consumer Survey for GOBankingRates.com.

“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” says Cameron Huddleston, a personal financial analyst for GOBankingRates.com. “They likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts to cover unexpected expenses.”

Echoing these findings, a similar survey by Bankrate.com earlier this year of 1,000 adults found that 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair. If they needed money, the Americans surveyed say they would raise the money by reducing spending elsewhere (26%), borrowing from family and friends (16%), or using credit cards (12%).

Among those who did have savings prior to 2008, 57 percent said they used up some or all of their savings in the Great Recession, according to a U.S. Federal Reserve survey of more than 4,000 adults in 2014.

The age group with the least amount of savings? Generation X, who are ages 35 to 54. About 31 percent from this age group surveyed reported a savings account balance of zero – the highest number of any other age group, according to the GOBankingRates.com survey. In comparison, about 29 percent of millennials – aged 18 to 34 – and 28 percent of baby boomers –age 55 to 64 – say they have no money in their savings account.

For those who do have savings, the most common savings balance is $10,000 or more (14%), followed by 5 percent of adults who have saved between $5,000 and $10,000.

Source: “Most Americans Have Less Than $1,000 in Savings,” MarketWatch (Oct. 10, 2015)