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Home Renovations That Will Increase Your Property Value

As winter turns to spring, you may be considering not just a cleaning, but a renovation of your home, either in preparation for a sale or for improved livability. Here are some general steps to home improvement that will ensure your efforts are adding value to your home, wherever it is.

 

Fixer-Upper

Be sure to address basic maintenance and repairs as the first step of any renovation effort. The essential functioning of your home is, aside from the major outside appearance, its most significant selling point. Ensure the house is adequately insulated, especially if it has an attic. Inspect and if necessary repair the furnace, septic system, and other plumbing, including the gutters. Maintain the lawn or garden plants — basic weeding improves the look of a house significantly.

 

A New Door

The most significant value-adding renovation is a new front door for the house. Any house benefits from a positive first impression, and a new door ensures that everyone from the new neighbors to potential buyers gets a good first look at your home.

 

Make a Plan

The next most valuable improvement is an open floor plan between the kitchen and living room. Buyers and visitors value space in this core interior part of the house, and a few hundred dollars can provide that feeling for your home. The goal should be to create a more spacious kitchen in a way that does not conflict with the existing decor of the room.

 

Put Some Light on the Subject — and Go Green

Especially if you take the opportunity to switch to LED or other eco-conscious lighting such as sub tubs and dimmers, which are both increasingly popular, upgrading your house’s lighting can brighten the mood and add significant appeal to your home. In fact, a general upgrade of your house’s energy systems to make them more efficient and eco-conscious nets considerable savings, potentially 30-40% on the heating and cooling systems alone.

 

Under Your Feet

Real estate professionals overwhelmingly recommend assessing and devoting some money to improving your flooring. Simply repairing broken tiles or damaged floor boards, and definitely removing wall-to-wall carpeting could recoup their cost twice over. If complete floor replacement is necessary, engineered hardwood holds the best value.

 

These basic steps are straightforward ways to improve the look and mood of your home, which will add value if and when you wish to sell.

 

Seven Real Estate Predictions for the New Year

Every time a new year rolls around, people love to predict what the future will hold. For some, this means setting resolutions that they will (most likely) give up on by the end of the year. Oftentimes, it can be difficult to predict what the future will hold, on both personal and global levels. This year, we have a new president whose choices could have profound impacts on the economy, and the real estate market as a result. The economy is volatile and subject to change… wars could break out, an asteroid could strike the earth, the apocalypse could come. Not saying those last few things are likely, but my point is that anything could happen.

As a real estate professional with over 20 years of experience, I’ve been in the field long enough to know that real estate is one sector of the world that can be fairly easy to predict based on past trends and behaviors. Not only that, but it is important for both real estate agents and buyers/sellers to stay up-to-date on real estate trends, so that they can make informed decisions based on the current market.

If you’re looking to buy and/or sell a home this year or you’re a real estate agent wanting to achieve the best outcomes for your clients, then it pays to do your research. Luckily, I’ve already done some of it for you. Here are some of the top trends to look out for this year, according to industry experts.

1. Housing boom in suburbs and mid-sized cities

The years following the housing crisis saw a rise in the amount of people moving to large cities like New York, Los Angeles, and San Francisco because real estate was more affordable. Now, however, as the market is in a gradual state of recovery, home prices are on the rise and buyers are flocking to the suburbs for more affordable housing. While the major cities will always be a hub for jobs, especially for younger people, the suburbs and mid-sized cities are typically the more affordable option. According to Svenja Gudell, chief economist for Zillow, “Now we see people would still like to live clost the city center where they’re close to amenities and in walkable neighborhoods, but for the first time they’re not able to find enough investory that’s affordable for them to buy.” Additionally, many young adults looking to buy their first homes are attracted to mid-sized cities (Raleigh, North Carolina for example) for the cheaper rents and lower housing prices that they offer. 

2. Millennials and baby boomers will take up a large share of the market

As the millennial generation comes of age, more and more will be looking to start families and buy their first homes in 2017. The younger end of this generation may be more attracted to rental properties early in their careers, but the older end (those in their early to mid-thirties) will start to mortgage homes due to a variety of factors including more jobs targeted at workers between the ages of 25 and 34,  and increased wages. On the other end of the spectrum, many baby boomers are reaching retirement age and will be purchasing retirement homes. According to Jonathan Smoke, chief economist of Realtor.com, some retirees will want to downsize to cut back on expenses, but a large proportion (now that their buying power has improved after the housing crisis) are purchasing large homes to accommodate children and grandchildren.

3. Home values will increase, but at a slower rate than last year

Home values will continue to increase, at a rate of about 3.6. This would be a slight decrease from last year, when national home values rose 4.8 percent. As the market recovers from the housing crisis, the increase in home values will start to level off. This slowdown in appreciation rates is an inevitable effect of the housing market normalizing after crisis, according to Gudell and Smoke.

4. Rent affordability will improve

Good news for twenty-somethings struggling to pay rent each month on their entry-level salaries! Real estate experts predict that rent prices will become more affordable across the nation as the rate of income growth is outpacing rental rates.

5. Mortgage rates will increase

While there are some who are fearful that the Trump presidency will lead us back into recession due to his plans to cut government spending, real estate professionals are actually optimistic. Rick Sharga, executive vice president of real-estate auction site Tex-X, believes Trump’s presidency will positively affect the housing and mortgage markets in the long term, and home buying will stay steady throughout 2017. In fact, home prices and mortgage rates are expected to continue to rise after the housing market crash of 2012. From a buyer’s and seller’s perspective, it makes sense to act sooner rather than later if you’re planning on buying/selling a home.

6. More new construction

As home values in general continue to increase, so too will the price of new construction, exacerbated by a shortage of labor in the construction industry forcing contractors to offer higher wages to compete for workers. Prices will increase for buyers to offset these costs. Yet, despite increases in the costs of new construction, the rate of new construction will increase as well based on the trends of the last few years, and the fact that higher wages and more flexible credit are giving home buyers more spending power.

7. Rise of the drones

Advancements in technology are expected to play a part in real estate trends this year as well, in the form of drones. Some real estate agents have already been using drones to capture flyover images of properties, and now (thanks to new regulations from the Federal Aviation Administration) homeowners can use them to take their own images of their homes, even using them as a way to bypass the home inspection.

 

Thicker Than Water: Why More Young Adults Are Living With Parents

A few decades ago, returning home to live with Mom and Dad for an extended period of time after college was not without a certain stigma attached. Young adults were expected to be independent and self-sufficient in older generations, and while that is still largely the case, more and more young Americans are choosing to live with their parents to save money until they have the financial means to provide for themselves.

According to the Washington Post based on data from real estate tracker Trulia,  the percentage of American young adults living with their parents is at a 75-year high, with nearly 40% of the millennial generation (young adults between the ages of 18 and 34) living with their parents or other family members in 2015. This is the largest percentage since 1940.

Even with recent job growth since the economic recession, this trend has been on the rise since 2005, when the number of young adults living with relatives was only one in three. In previous periods of recession, the number of young people living with their parents dropped off as economic conditions improved, but that is not the case anymore, as this all-time-high rate demonstrates.

As a result of more millennials returning to live at home than ever before, millennials are occupying a much smaller share of the housing market than would be expected for the largest generation in U.S. history. According to research from the Harvard Joint Center for Housing Studies, the number of adults under the age of 30 has increased by 5 million over the last decade, but the number of households for that group did not rise in proportion, growing by just 200,000 over the same period. This could be due, in part, to the fact that the barriers to owning a home are much steeper than they used to be. Even with the job market gradually improving, housing prices are not. Rent prices are on the rise in many cities and mortgage-lending standards are stricter than they used to be.

Additionally, millennials as a whole are getting married and starting families later in life than previous generations. Without a combined income to work with, homeownership is out of reach for many millennials. The Harvard Joint Center found that of those aged 25 to 34, only 40% of those earning less than $25,000 headed their own household. The rate is at 50% for those earning between $25,000 and $50,000 and 58% for those earning more than $50,000 in annual income. These statistics just go to show how inextricably linked income and homeownership are. Even as the millennial generation is expected to double its number of households by 2025, it still begs the question of what the long-term consequences of delayed homeownership will be.