Top 5 Home Improvement Projects Based on Cost and Return on Investment

HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey. HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers.

HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes.

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI)

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase).

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999.

For more information, visit www.homegain.com.

Study Finds 20% of Mortgages Underwater

According to Reuters News nearly 20 percent of home owners owe more on their homes than their properties are worth, finds a new study by First American CoreLogic.

About 8.31 million properties were underwater at the end of 2008, up 9 percent from 7.63 million at the end of September.

Corelogic predicts about 2.16 million properties will be underwater if home prices fall another 5 percent.

The problem is the worst in Arizona, California, Florida, Georgia, Michigan, Nevada, and Ohio.

Nationwide, 68 percent of U.S. adults own their own homes, and about two-thirds have mortgages.

Top 5 Preferences for Kitchen, Bathroom, and More

According to the National Association of Home Builders’ Consumer Preferences survey, these are the features most in demand among today’s buyers.

Top 5 Kitchen Features

1. Walk in pantry: 86 percent
2. Island work area: 80 percent
3. Special use storage (custom made for appliances): 66 percent
4. Built-in microwave: 72 percent
5. Drinking water filtration: 69 percent

Top 5 Bathroom Features

1. Linen closet: 89 percent
2. Exhaust fan: 88 percent
3. Separate shower enclosure: 79 percent
4. Water temperature control: 79 percent
5. Whirlpool tub: 66 percent

Top 5 Specialty Areas

1. Laundry room: 92 percent
2. Dining room: 81 percent
3. Home office: 71 percent
4. Den/library: 63 percent
5. Sun room: 53 percent

Top 5 Decorative Features

1. Ceiling fan: 83 percent
2. Built-in shelving: 70 percent
3. Window seats: 51 percent
4. Woodburning fireplace: 48 percent
5. Gas fireplace: 48 percent

Top 5 Community Features Preferred

1. Walking/jogging trails: 49 percent
2. Park area: 46 percent
3. Outdoor swimming pool: 39 percent
4. Lake: 34 percent
5. Playgrounds: 32 percent

Provincial real estate sales down by one-third in 2008

The British Columbia Real Estate Association reported today that the decline in real estate markets didn’t just affect the Lower Mainland phenomenon in 2008 as the province as a whole saw sales drop by one-third .

Realtors recorded 68,923 sales across B.C. through the Multiple Listing Service, their lowest level since 2000, the BCREA said, when the province recorded 54,179 sales.

The average home price over the 12 months of 2008 was $454,599, a 3.5-per-cent increase from 2007.

BCREA chief economist Cameron Muir said the average price peaked in March at $483,291, and fell 11 per cent to $429,210 in December.  And that $429,210 average is six per cent lower than the average price in December, 2007.

Nine Real Estate Trends in 2009

According to an article published by RISMedia, there are nine real estate trends to watch this year. While specific to the Chicago market I think they are common to many cities in North America.

1. Less, With More. Single-family homebuilders are predicting the continued movement toward smaller homes, with many buyers opting for less square footage as a means of saving more, said Jim Chittaro, chief financial officer for Naperville-based J. Lawrence Homes. “Rather than paying more for square footage, they’re taking inventory of how much home they really need and deciding to go with a “quality over quantity” approach and adding features like a spa bath or gourmet kitchen that they’ll enjoy for years to come.”
2. The New American Dream. Homeownership has long been considered one of life’s benchmarks, so much so, that the concept earned the moniker, “The American Dream.” However, in today’s economic climate, realizing that dream is no longer an option for many people.
3. Urban Suburban. For years, a new-construction home in the suburbs meant moving into a cookie-cutter subdivision. But according to many suburban developers, their focus going forward won’t be simply building homes, but entire downtowns complete with residential, retail, restaurants and more.
4. Condo-MAX-iums. According to the National Association of Homebuilders, the average single-family home is 2,456 square feet. However, Chicagoland’s developers have noticed buyers – from young families to downsizers – are looking for the same amount of square feet when buying a condominium. “What we’re finding is that downsizers don’t really want to downsize at all. They’re accustomed to the design of a single-family home and don’t want to sacrifice space,” said Bob Horner, co-principal of Winthrop Properties. “Rather, they seek the maintenance-free lifestyle and single-level living offered by a condo.”
5. Online Toolboxes. According to the 2007 National Association of Realtors Profile of Home Buyers and Sellers, 84% of buyers use the Internet to search for a new home. Taking a cue from these findings, leading Chicagoland residential brokerage firms will be taking their services a step further by enhancing their sites with user-friendly Web tools that do much more than list homes for sale.
6. Common Ground. In the city, where green space is as high in demand as a parking space, some developers will start going the extra “yard” to give Chicagoans more outdoor community spaces.
7. The Sure Thing. With the real estate market in turmoil, buyers will be betting on the sure thing, said Ibrahim Shihadeh, co-principal of Winthrop Properties, developer of Printers Corner in the South Loop. “With our building complete and immediate move-ins available, sales momentum has been strong,” he said. “We’re one of the few buildings in the area ready for move-in. Until things smooth out a bit, buyers will continue to opt for developments that are complete or nearly complete rather than risk something that won’t come to fruition or won’t be as it was promised.”
8. The Resurgence of Rowhomes. Dating back to colonial Philadelphia and Boston, the rowhome is a hallmark of traditional city living. But at Port Clinton Place, a new-construction for-sale community in Vernon Hills developed by Opus North, and the Residences at the Grove, a 294-unit luxury rental community in Downers Grove, managed by RMK, even suburban residents will be enjoying the urban flavor of this classic housing style. “Rowhomes were born out of practicality, as their shared walls made it possible to fit more homes in densely-populated urban areas. But today, many suburban buyers are choosing these homes for their urban style and overall aesthetic appeal,” said Andrew Lockwood, real estate director for Opus North. “It’s a housing style that’s particularly appropriate at Port Clinton Place, which is part of a redevelopment plan to revitalize downtown Vernon Hills. Eventually this area will be a lively town center, much like the city neighborhoods where rowhomes first became popular.”
9. Creating Community. Many developers today are taking strides to form a sense of community among new residents before their homes are built – a trend that is expected to continue into 2009.

U.S. homes set to lose over $2 trillion in value during 2008

According to analysis of recent Zillow Real Estate Market Reports, home values declined 8.4% year-over-year during the first three quarters of this year, compared to the same period in 2007.

U.S. home values lost $1.9 trillion from the first of the year through the end of the third quarter, and were likely to fall further in the fourth quarter, leaving approximately 11.7 million American households owing more on their mortgage than their homes are worth. One in seven of all homeowners (14.3%) were underwater by the end of the third quarter.

Home sales double in California

Sales of resale single-family homes in California more than doubled in the past year — rising 117 percent in October 2008 compared to the same month last year — the statewide Realtors trade group reported today, while the statewide median price plummeted about 40 percent.

The seasonally adjusted annual rate of statewide sales reached 552,750 in October — up from a pace of 254,650 sales in October 2007. This sales rate is a projection of a monthly sales total over a 12-month period, adjusted to account for typical seasonal fluctuations in sales.

The median price of resale single-family detached homes in the state, meanwhile, dropped from $517,240 in October 2007 to $311,060 in October 2008, the group reported.

The National Association of Realtors on Monday reported that the U.S. median home price plunged 11.3 percent year-over-year in October, which was the largest drop since the association began tracking the statistic in 1968. The group also reported that sales of resale homes dropped 1.6 percent year-over-year in October.

Also, a Standard & Poor’s/Case-Shiller report released today found that resale single-family home prices have fallen an estimated 16.6 percent from third-quarter 2007 to third-quarter 2008 — a separate 20-metro-area index revealed that prices have fallen about 17.4 percent year-over-year in September.

The California Realtor Association’s Unsold Inventory Index, which estimates the number of months it would take to deplete the supply of for-sale homes at the latest monthly sales rate, was 5.9 months in October, compared with 15.2 months in October 2007.

And it took a median 45 days to sell a single-family resale home in October 2008, compared with 58.8 days in October 2007.

Economy Delays Home Buys for 27% of Homeowners

While this poll was conducted in the U.S. I am sure the results would be similar in Canada.

More than one-quarter (27%) of American homeowners say that the current economic environment is causing them to put their plans to buy a new or existing home on hold, according to a new Ipsos Public Affairs poll conducted on behalf of Realogy.

Among those who are most likely to say they are putting off a home purchase because of the financial crisis:

• Non-white homeowners (46%)
• Homeowners under age 35 (38%)
• Parents with children under 18 (33%)
• Those with a household income of less than $50,000 (33%)

Despite current hesitation to buy a new or existing home, nine in ten homeowners (91%) agree that owning a home is still the best long-term investment they can make with their money. Nearly three-quarters (72%) say that aside from shelter, they primarily see their current residence as a long-term investment.

West Vancouver Market Update November 2008

You read a lot in the newspapers about the market and they make gross generalizations, but what is really happening in West Vancouver?

Below is a table comparing detached home listings in West Vancouver from January 2008 to June 2008 to November 2008. What we do know is that the average number of days on market has increased and might even be higher depending on how many homes were taken off the market and re-listed a month or two later.

Here are the facts about the market as of November 7, 2008:
Total Number of Listings – 544
Average Days on Market – 99
Price Reductions – 213
% of current listings that have reduced their price – 39%
Average price reduction – 8%
Median price reduction – 7%
Average days on market for homes with price reductions -137
Average days on market for homes that have not reduced their price – 114

The price range of homes has changed since July 2008 when there were 322 homes for sale under $2 million compared to 303  today. Click on the chart below for a comparison of the number of homes for sale by price range from January 2008 to present.

	Jan-08	Jan-08	Jul-08	Jul-08	Nov-08	Nov-08
Price Range	# of Homes For Sale	Avg Days on Market	# of Homes For Sale	Avg Days on Market	# of Homes For Sale	Avg Days on Market
< $1 million	11	75	30	64	48	94
$1.0 – $ 1.25 million	21	75	63	78	69	99
$1.25 – $ 1.5 million	42	50	111	70	86	99
$1.5 – $ 2.0 million	57	64	118	79	100	79
$2.0 – $ 2.5 million	30	82	61	79	67	89
$2.5 – $ 3.0 million	21	53	37	73	54	104
$3.0 – $ 5.0 million	51	107	79	87	82	117
> $5 million	28	136	36	121	38	129
	261	81	535	79.5	544	99

BC 2008 Housing Forecast

The British Columbia Real Estate Association (BCREA) released its fall 2008 Housing Forecast today.

The BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 28 per cent from 102,805 units in 2007 to 73,700 units this year. A modest 4 per cent increase to 76,500 units is forecast for 2009.

The average MLS® residential price is forecast to increase 3 per cent to $453,000 this year. However, home prices peaked in the first quarter and have been edging lower for several months. For 2009, the average price is forecast to decline 9 per cent to $413,000, with most of the decrease having already occurred by the end this year.

Downward pressure on home prices is expected to ease by the second quarter of 2009, as an increase in affordability and consumer confidence induces a modest growth in sales. The inventory of homes for sale is also expected to decline in the coming months as potential home sellers delay putting their homes on the market until conditions improve.