Real Estate News

December Real Estate Newsletter

December – Real Estate Newsletter

General Prognosis

“A pickup in home sales last month (is signaling) stabilization in the U.S. housing sector despite continued pressure from tight inventory and rising prices.” – Realtor.com

TOP STORY: Home Maintenance Is a Value Proposition

Your home is more than shelter. It’s also an investment In fact, home ownership is the single largest investment that most Americans will make in their lifetimes. Given that fact, it’s surprising more owners don’t think of home maintenance as a way to manage an asset.

Good home maintenance, in fact, adds value to your home: A joint study by the University of Connecticut and Syracuse University finds that regular maintenance increases the value of a home by about 1% each year. According to one expert, in fact, good maintenance is a better way of adding value to your home than building an addition or other big dollar improvements.

Maintenance is also a way to prevent bad conditions from getting worse. A home in poor repair can lose 10% of its market value, says an appraiser in Chester, Va. That’s a $15,000 to $20,000 adjustment for the average home.

“Wish We Did It Sooner”

Making repairs in a timely way pays for itself, according to Mike Mc Clintock of the Chicago Tribune. Even so, many owners wait until homes are listed for sale to perform improvements. “When they’re done,” however, “they wish they’d made the improvements long ago.”

In a similar vein, a writer on HouseLogic.com has this recommendation: “Don’t procrastinate when you spot minor leaks or drips inside your house. Ongoing small leaks can slowly erode pipes and fixtures, and even cause mold and mildew issues you won’t notice until it’s too late.”

As it turns out, good maintenance is often inexpensive. Everyday repairs that don’t require a carpenter or a handyman can help maintain the value of your home without a big cash outlay.

$4 Tube Prevents $5,000 Repair

Good maintenance habits not only protect your home, but your wallet, as well, according to HouseLogic. “Say you’ve got a bit of cracked caulk around the kitchen window, it may not seem like much, but behind that caulk, water could get into your sheathing, causing mold damage and rot.”

“Before you know it,” adds the website,” “you’re looking at a $5,000 repair that could have been prevented by a $4 tube of caulk and a half hour of your time.”

Deciding on which repair jobs to perform first seems daunting when funds are limited, according to Roxanne Washington in the Cleveland Plain Dealer. Prioritizing projects, she adds “becomes even more important when you’re planning to sell your home.”

Get Organized, Not Overwhelmed

Homeowners should base their maintenance priorities on their budgets and time windows, writes Allison Hodgson in Houzz.com, a home decor site. “Make a master plan” for maintenance, she writes. “Once you know what you need to do, decide how you want to execute things. Do you want to go room by room, or would it be better to do a big overall project, like giving everything a fresh coat of paint?”

The planning stages, she adds, “is where it’s important to be clear on your energy level, budget and personal style before you dive into anything.”

First, do not lump routine maintenance together with expensive home improvement tasks, such as replacing the roof or building an addition, says Tom Tynan of the Houston Chronicle. “One common mistake is to group repair work, inspection work, mechanical breakdowns, remodeling and restoration together. Many times, all of these aspects are grouped into one big ‘maintenance pile’ creating an attitude of ‘where do I begin?’”

Safety First

Tynan’s advice is to divide and prioritize projects into the categories above, and handle them, one at a time, at different times, and on a regular basis. “You’ll realize it is really not that overwhelming,” he says.

But where do you start on the never-ending task of home maintenance? Ensuring your family’s safety is the best place to begin, according to Don Vandervort, founder of HomeTips.com. Projects that protect your family and the structure of your house should be at the top, ahead of projects that add comfort and save money, followed by discretionary projects.

Here is some of Vandervort’s to-do list:

  • Safety. “For example, make sure your home has working smoke and carbon monoxide alarms [replacing batteries every 6 months]. Be sure to childproof your home if you have little ones in the house,” he says.
  • Repair any problem that threatens to cause permanent damage or which prevents you from using your home. “If water is dripping from the ceiling, find the source and repair it,” says Vandervort. “Otherwise, the water will ruin your ceiling, damage the floor, and ultimately undermine your home’s structure. If your pipes freeze, take the necessary steps to thaw them out.”
  • Remove potential health hazards: “If you’re concerned about the safety of your drinking water, the quality of your air or the presence of asbestos or lead in your home, take steps to alleviate the problems.”
  • “Make upgrades that will ultimately save you money. Projects that reduce energy and water consumption fall into this category.”
  • Polish off repairs that have a big nuisance factor-faulty doorknobs, squeaky floors, dripping faucets and the like.

Your Home Inspection Checklist

After you have ensured the safety of your household, you should conduct a methodical inspection of your home from top to bottom, according to Tom Tynan of the Houston Chronicle. Home- owners, he says, need to inspect their house at least once a year, “determining which repairs you can complete and which will require the assistance of a professional. Looking for conditions needing attention.” Here’s some of the things that Tynan recommends looking for:

Were Termites Here?

The roof. Examine it “at least once a year,” says the Houston Chronicle writer. Look for signs of crumbling or missing shingles. If tree branches are rubbing against shingles, “remove them immediately as they can damage the shingles, reducing the life of the roof.”

  • The “weather skin.” This is your home’s outermost coating, whether that is siding, brick, stucco or another material. Look for signs of mold, mildew, wood rot and water damage, because if the outer skin is not in good shape, the inside of the structure will begin to deteriorate.
  • Exterior paint. Determine whether the well, and if there is concern, consider repainting, since paint/stain are the protective coats for the wood or siding underneath, according to Tynan, who adds that it’s very important to have the paint in good condition to protect the outer skin from the elements.
  • Termite damage. While doing your exterior inspection, also look for termites or signs of the insects, such as termite saw dust, damage or mounds. Keep a close eye on other favorite places for termites, such as under sinks, and around the outside doorframes, he advises.
  • Electrical systems. This inspection can include lighting fixtures, light bulbs, improperly working ceiling fans to breaker box problems. If you’re not handy with electricity, hire a professional.
  • Inside Plumbing. Are washers worn out? Do the showerheads tend to sputter rather than spray? Also check the water heater pop-off valve. Again, if you’re not comfortable, hire a pro.
  • Appliances. These tend to be ignored on a regular basis, and given attention only when they quit working properly, says the Chronicle writer. Inspect clothes dryers, washing machines, refrigerators, freezers, dishwashers, stove-tops and ovens. Dirt that continues to accumulate in the coils is costing you money and will lead to a premature breakdown of the appliance, he says. Plus, gaskets on the refrigerators and freezers need to be inspected and repaired if necessary.
  • Dust and debris. Do not overlook clothes dryers, as dust and debris under­neath the dryer needs to be cleaned to help prolong the life of the dryer, says Tynan. Most importantly, have the dryer vents cleaned on an annual basis, as dryer vent fires are common and can be disastrous.
  • Hardware. Door locks and latches that are not working properly, and hardware that’s loose, need to be placed on the priority list. “Because they are minor, and easy and quick to repair, they are typically pushed aside and allowed to accumulate until the list of minor repairs is staggering,” he says.

IT’S STILL A GOOD TIME TO BUY A HOME

“Home prices keep climbing, but homes remain affordable across the U.S. The explanation: current mortgage rates that temper rising home prices. (In the third quarter) more than six in 10 U.S. homes were “affordable” to households earning the national median income, assuming that household used a 30-year conventional mortgage to finance the home, made a modest down payment on the property, and carried good credit scores. …As it stands, affordability is highly dependent on continued low rates. Prices keep rising, and hit the highest level since the second quarter of 2007. For buyers wanting to maximize their home-buying dollar, then, the next few months may be an opportune time to purchase a home. After that, home affordability may become much worse”. – The Mortgage Reports

NORTHWEST LEADS IN VALUE GAINS

“Our forecast still shows general market strength for the U.S. residential real estate market, but the slight softening we saw in last quarter’s report has continued. This weakening is being driven by some specific markets which are experiencing sharp increases in housing inventory. Examples include the San Francisco Bay Area where appreciation is forecast to be 7% over the next 12 months, a figure which is down significantly from previous double-digit appreciation forecasts. The top forecast markets show appreciation in the 10%-11% range. The top forecast market is Seattle, WA at 11.2%, followed by Portland, OR at 11.1% and Denver, CO at 9.9%.” – Eric Fox, Veros Real Estate Solutions

A Trip to the Hardware Store

Tynan advises to set aside a few hours each week to address at least a few items you plan to repair. “Make a trip to the hardware store and eliminate several items off your repair list each week.”

Again, don’t look at home repairs in the same light as doing a major remodel, he says. “A major remodel can be anything from repainting, and re-wallpapering to gutting a bathroom or kitchen,” Tynan explains. “Remodels need to be planned for in advance, have an established budget and this remodel budget should never take away from a new roof, paint or HVAC repairs.”

If you plan to sell your home, you may wish to consider the kinds of maintenance and improvement projects that make a home more salable, according to McClintock of the Chicago Tribune. At this point, he adds, run your ideas by a knowledgeable Realtor.

HOUSING REMAINS AFFORDABLE

“A combination of rising home prices and sluggish income growth have driven affordability some 25% lower. Despite the drop, affordability is well above its long-term average and also well above levels during the mid-2000s housing boom. The three components of affordability-incomes, home prices, and mortgage rates-may all continue to move higher, potentially driving affordability lower back toward its long-term average, but not much below.” -Advisor Perspectives Inc.

A Doorbell that Works

As it turns out, Realtors tend to recommend improvements in four areas: the appearance of the interior and exterior, plus kitchens and baths. Here’s a short list of projects that pay off, courtesy of the Chicago Tribune.

  • The front door and the general appearance of the house from the street (i.e. its curb appeal.) Little touches may help, such as new paint, new house numbers, a knocker that’s shined, a bell that works, a deadbolt in addition to the handset lock, a wreath, a flower pot in summer, raked leaves in fall, cleared snow in winter.
  • Exterior paint. Light sanding and a coat of paint is often enough to eliminate eyesores like peeling window sills. Soffits (the underside of the roof overhang) are another chronic maintenance problem, havens for mold growth, and difficult to clean and paint… Many homeowners finally replace wood soffits with alumi­num or vinyl.
  • Replacing old or worn surfaces. If refinishing your wooden floor is too big a job (it could take three or four days, creating clouds of dust and making the area uninhabitable for a few days) you could replace it with a click-together laminate; a DIY job in most cases that saves the cost of a contractor. Most laminates are pre-finished so once the planks are down you’re done.

The Wow Factor

Another tip from McClintock: “Add a touch of luxury like crown molding, plantation shutters, something unexpected, even over the top. Agents call it the wow factor.”

Even if you’re not thinking of selling your place right now, performing repairs that you’ve been putting off will save you money and make you feel good. You’re being a responsible homeowner and you’re protecting your home’s value. And for many people, that may enough of a wow factor.