Q: Should I Sell My Home First or Wait until I Have Bought another Home?

A: This is a tough decision, but the answer will depend on your personal situation, as well as the condition of the local housing market.

If you put your home on the market first, you may have to scramble to find another one before settlement, which could cause you to buy a home that does not meet all your requirements.  If you cannot find another home, you may need to move twice, temporarily staying with relatives or in a hotel.

On the other hand, if you make an offer to buy first, you may be tempted to sell your existing home quickly, even at a lower price.

The advantage of buying first is you can shop carefully for the right home and feel comfortable with your decision before putting the existing home on the market.

On the flip side, the advantage of selling your existing home first is that it maximizes your negotiating position because you are under no pressure to sell quickly.  It also eliminates the need to carry two mortgages at once.
Talk with your agent for advice.  Discuss the pros and of each and whether certain contingencies written into the contract can ease some of the pressures.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


5 Home Improvements that Pay Off—and 5 that Don’t

By Suzanne De Vita

Favorable economic conditions have long triggered investment in home improvements—more money, more upgrades—and progress on the housing front is set to spur the next wave of homeowner spending on both necessary and discretionary projects.
 
How should homeowners invest their remodeling dollars this year?  By and large, homeowners can expect to reap the highest returns on projects that cost relatively less, according to REMODELING magazine’s 2016 Cost vs. Value Report.
 
On a national scale, the top five projects with the greatest return on investment (ROI) in the report’s “midrange” cost category are:

1. Attic Insulation (Fiberglass) (116.9% ROI)
Average Cost: $1,268
Average Resale Value: $1,482

2. Manufactured Stone Veneer (92.9% ROI)
Average Cost: $7,519
Average Resale Value: $6,988 

3. Garage Door Replacement (91.5% ROI)
Average Cost: $1,652
Average Resale Value: $1,512

4. Entry Door Replacement (Steel) (91.1% ROI)
Average Cost: $1,335
Average Resale Value: $1,217

5. Minor Kitchen Remodel (83.1% ROI)
Average Cost: $20,122
Average Resale Value: $16,716

On a national scale, the top five projects with the greatest ROI in the report’s “upscale” cost category are:
 
1. Garage Door Replacement (90.1% ROI)
Average Cost: $3,140
Average Resale Value: $2,830

2. Siding Replacement (Fiber-Cement) (78.1% ROI)
Average Cost: $14,520
Average Resale Value: $11,342

3. Window Replacement (Vinyl) (73.3% ROI)
Average Cost: $14,725
Average Resale Value: $10,794

4. Window Replacement (Wood) (72.1% ROI)
Average Cost: $18,087
Average Resale Value: $13,050

5. Grand Entrance (Fiberglass) (69.6% ROI)
Average Cost: $7,971
Average Resale Value: $5,545

On the whole, regional data mirror these national findings, but variations exist in markets abuzz with real estate activity. Homeowners in the Pacific region (California, Hawaii, Oregon and Washington), for instance, can expect to see six of the 30 projects analyzed in the report recoup over 100 percent of their cost.

At the other end of the spectrum are projects with the lowest returns on investment—improvements generally not in demand by the market.

On a national scale, the five projects with the lowest ROI in the “midrange” cost category are:

1. Bathroom Addition (56.2% ROI)
Average Cost: $42,233
Average Resale Value: $23,727

2. Backup Power Generator (59.4% ROI)
Average Cost: $12,712
Average Resale Value: $7,556

3. Master Suite Addition (64.1% ROI)
Average Cost: $115,810
Average Resale Value: $74,224

4. Deck Addition (Composite) (64.4% ROI)
Average Cost: $16,798
Average Resale Value: $10,819

5. Major Kitchen Remodel (64.9% ROI)
Average Cost: $59,999
Average Resale Value: $38,938

On a national scale, the five projects with the lowest ROI in the “upscale” cost category are:

1. Bathroom Addition (56.7% ROI)
Average Cost: $79,380
Average Resale Value: $45,006

2. Master Suite Addition (57.2% ROI)
Average Cost: $245,474
Average Resale Value: $140,448

3. Bathroom Remodel (57.5% ROI)
Average Cost: $57,411
Average Resale Value: $32,998

4. Deck Addition (Composite) (57.7% ROI)
Average Cost: $37,943
Average Resale Value: $21,877

5. Major Kitchen Remodel (61.5% ROI)
Average Cost: $119,909
Average Resale Value: $73,707

The 2016 Cost vs. Value Report compares, across 100 markets, the average cost of 30 popular remodeling projects with their average value at resale one year later. Average resale value is calculated based on estimates provided by real estate professionals. View the full report, including project descriptions and city-level data, here.

This post was originally published on RISMedia's blog, Housecall. Check the blog daily for winning real estate tips and trends.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


What to Do If Your Home Has Radon

By John Voket

Breathing Radon is a leading cause of lung cancer in the U.S., according to the federal Environmental Protection Agency. The EPA says most homes with high levels of radon gas can be fixed, however, so let's take a quick look at indoor air venting solutions that are proven, practical, and cost-effective to install if high radon levels are found.

If you have tested your home for radon and confirmed that you have elevated radon levels, 4 picocuries per liter in air (pCi/L) or higher, the EPA says your local Health Agency or radon contact may help you:

Select a qualified radon mitigation contractor to reduce the radon levels in your home. EPA recommends that you use a state certified and/or qualified radon mitigation contractor trained to fix radon problems.

Determine an appropriate radon reduction method.

Maintain your radon reduction system.
Radon reduction systems work, some mitigating radon levels by up to 99 percent. The cost of a contractor fixing a home generally ranges from $800 to $2500, and most types of radon reduction systems cause some loss of heated or air conditioned air, which could increase utility bills.

How much utility bills increase will depend on the climate you live in, what kind of reduction system you select, and how your house is built. Systems that use fans are more effective in reducing radon levels; however, they will slightly increase your electric bill.

EPA generally recommends methods which prevent the entry of radon. Soil suction, for example, prevents radon from entering your home by drawing the radon from below the house and venting it through a pipe, or pipes, to the air above the house where it is quickly diluted.

In houses that have a basement or a slab-on-grade foundation, radon is usually reduced by one of four types of soil suction: subslab suction, drain tile suction, sump hole suction, or block wall suction.

An effective method to reduce radon levels in crawlspace houses involves covering the earth floor with a high-density plastic sheet. A vent pipe and fan are used to draw the radon from under the sheet and vent it to the outdoors. This form of soil suction is called sub-membrane suction, and when properly applied is the most effective way to reduce radon levels in crawlspace houses.

Other radon reduction techniques that can be used in any type of house include: sealing, house/room pressurization, heat recovery ventilation, and natural ventilation.

Homeowners can get assistance by calling 1.800.SOS.RADON, or visiting epa.gov/radon/.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Q: What Is Universal Design and How Does It Relate to Remodeling?

A: Universal design is an approach to design that focuses on making all products and environments as usable as possible by as many people as possible regardless of age, physical ability, or situation.  In recent years, the housing industry has recognized the importance of a "universal" approach to residential design that modifies standard building elements to improve a home's accessibility and usability.  This allows for more equitable, flexible and simple use.  Many books exist on the subject, including Residential Remodeling and Universal Design: Making Homes More Comfortable and Accessible, a resource guide offered by the Department of Housing and Urban Development (HUD).  HUD’s guide provides technical guidance on selecting and installing universal features during home remodeling or renovation. The modifications can range from expanding doorway dimensions to replacing kitchen appliances.  The guide emphasizes eliminating unintentional barriers and using designs and features that could benefit people with a broad range of needs.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Consumers Have Confidence in 2016

The Conference Board Consumer Confidence Index®, which had decreased moderately in November, improved in December. The Index now stands at 96.5 (1985=100), up from 92.6 in November. The Present Situation Index increased from 110.9 last month to 115.3 in December, while the Expectations Index improved to 83.9 from 80.4 in November.

“Consumer confidence improved in December, following a moderate decrease in November,” says Lynn Franco, Director of Economic Indicators at The Conference Board. “As 2015 drew to a close, consumers’ assessment of the current state of the economy remains positive, particularly their assessment of the job market. Looking ahead to 2016, consumers are expecting little change in both business conditions and the labor market. Expectations regarding their financial outlook are mixed, but the optimists continue to outweigh the pessimists.” 

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was December 15.

Consumers’ appraisal of current conditions was mixed in December. Those saying business conditions are “good” increased from 25.0 percent to 27.3 percent. However, those saying business conditions are “bad” also increased from 16.9 percent to 19.8 percent. Consumers, however, were more positive about the labor market. The proportion claiming jobs are “plentiful” increased from 21.0 percent to 24.1 percent, while those claiming jobs are “hard to get” decreased to 24.7 percent from 25.8 percent.

Consumers’ optimism about the short-term outlook was somewhat mixed in December. Those expecting business conditions to improve over the next six months decreased slightly to 15.2 percent from 15.7 percent. However, those expecting business conditions to worsen increased slightly to 11.0 percent from 10.6 percent.

Consumers’ outlook for the labor market was more optimistic. Those anticipating more jobs in the months ahead increased slightly to 12.9 percent from 12.0 percent, while those anticipating fewer jobs decreased from 18.5 percent to 16.6 percent. The proportion of consumers expecting their incomes to increase declined from 17.3 percent to 16.3 percent. However, the proportion expecting a reduction in income decreased from 11.8 percent to 9.7 percent.

For more information, click here.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


U.S. Home Values Gained $1.1 Trillion in 2015

The value of all homes nationwide grew $1.1 trillion in 2015, and is expected to end the year at $28.5 trillion total. The value of the entire housing stock grew 4.1 percent over the past year, slower than the 6 percent growth in 2014.

The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust in December 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006.

The dollar amount itself underscores the significance of housing to the U.S. economy. In the third quarter of 2015, the U.S. gross domestic product was $18.1 trillion, $10 trillion less than the total value of the housing stock.
 
"This reminds us of the large role housing plays in the overall economy," says Zillow® Chief Economist Dr. Svenja Gudell. "Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been. At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year."

Housing value isn't distributed equally across the country. California is home to about 12 percent of the U.S. population, but the state accounts for nearly a quarter of the country's total home value, driven by highly valued markets like Los Angeles and San Francisco.

Total Rent Paid
Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace.  In all, renters spent $535 billion on rent in 2015 – nearly as much as the total budget of the Department of Defense ($575 billion), according to a new Zillow rentals analysis.  In 2014, they spent $516 billion.
 
Renters of single-family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single-family home renters paying $245 billion.

Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 – about $56 billion. Los Angeles-area renters spent nearly $35 billion, and San-Francisco renters spent $17 billion. About two-thirds of the total rent paid in 2015 was spent in the 50 largest metros.

November Real Estate Market Report
Home values rose 3.9 percent annually in November to a Zillow Home Value Index of $183,000, according to Zillow's November Real Estate Market Reports. Denver home values grew fastest for the tenth consecutive month at 15.5 percent annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double-digit growth.

Rents also continued their steady climb, growing 3.8 percent annually to a Zillow Rent Index of $1,382. The pace of rental appreciation has slowed over the past four months. Only San Francisco and Portland saw rents grow at a double-digit pace, as Denver and San Jose slipped back into single-digit growth.

For more information, visit www.zillow.com.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2016. All rights reserved.


Ready, Set, Glow: 10 Tips for Bright, Beautiful Holiday Displays

To say holiday displays have gone extreme is an understatement. (“The Great Christmas Light Fight,” anyone?) But holiday lights don’t have to be over-the-top to have an impact—in fact, just a few professional-grade tricks are all it takes to create a sparkling, festive display.

1. Use LED lights. They burn at a lower temperature and use nearly 90 percent less energy than incandescent lights, making them a safer and more efficient option.

2. Choose a theme. Whether you prefer traditional or a more colorful, contemporary approach, keep your theme consistent to create an attractive and cohesive look.

3. Be unique. Be true to yourself in your design. Find something that speaks to your style and make that the focus of your display.

4. Use a timer. Timers are great investments that save energy and hassle. Set your timer to come on about 30 minutes before sunset and to go off between 11 p.m. and midnight.

5. Select a shade. LED lights come in two shades of white: traditional warm white and cool white. Both create a dazzling holiday look.

6. Don't over-do it. You can create a car-stopping display (without becoming the Griswolds) by adding eye-catching elements like character figures or animation lighting.

7. Use daytime décor. Since lights don't read well during the day, add daytime décor, such as greenery of character figures, to keep your home looking festive all day long.

8. Never use outdated products. Test all your lighting products before installation to confirm that all are in good working order. Replace any questionable or worn bulb or light strand.

9. Highlight the features. Outline a distinct roof line or windows with lights, drape an archway with a lit garland, or light the pathway to your home's door.

10. Don't forget the backyard. Decorate a small area in your backyard to create a holiday focus through your windows.

Source: Christmas Décor, Inc.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


€˜Tis the Season to Prepare Your Home for Cold Weather

Approximately one-fifth of homeowners insurance claims are brought on by damage caused by water or cold temperatures—much of which comes as a result of snowy conditions, according to the Insurance Information Institute (I.I.I.). Although standard homeowners and renters policies cover winter-related damage, such as that caused by burst pipes, ice dams and wind, as well as damage caused by either the weight of ice or snow, there are a few steps homeowners can take to protect their homes before winter kicks in. These include:

Cleaning out the gutters. Remove leaves, sticks and other debris so melting snow and ice can flow freely, which prevents damming, a condition in which water seeps into the house, potentially damaging ceilings and walls.

Installing gutter guards. This prevents debris from entering the gutter and interfering with the flow of water away from the house and into the ground.

Trimming trees and removing dead branches. Ice, snow and wind can cause weak trees or branches to break and damage your home or car, or injure someone walking by your property.

Adding extra insulation to attics, basements and crawl spaces. If too much heat escapes through the attic, it can cause snow or ice to melt and then re-freeze on the roof, resulting in an ice dam that can cause significant roof damage. Well-insulated basements, crawl spaces and unfinished rooms, such as garages, protect pipes from freezing.

Providing a reliable back-up power source. In the event of an electrical outage, continuous power will help prevent frozen pipes. Consider purchasing a portable generator to ensure your household’s safety.
 
Keep in mind that coverage for flooding, including flooding caused by melting snow, is available from FEMA’s National Flood Insurance Program (NFIP) and from some private insurance companies.
 
Remember also that melting snow can overburden sewer systems, causing raw sewage to back up into the drains in your home. Backed up sewers can cause thousands of dollars in damage to floors, walls, furniture and electrical systems. Sewer back-up coverage can be purchased either as a separate product or as an endorsement to your homeowners or renters policy.

Source: I.I.I.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


FHA Announces New Loan Limits to Take Effect January 1st

The Federal Housing Administration (FHA) recently announced the agency's new schedule of loan limits for 2016. These loan limits are effective for case numbers assigned on or after January 1, 2016, and will remain in effect through the end of the year.
 
Due to changes in housing prices, the maximum loan limits for forward mortgages increased in 188 counties. There were no areas with a decrease in the maximum loan limits for forward mortgages.

Each year, FHA recalculates its loan limits based on 115  percent of the median house price in the area. For counties, or equivalent, located in Metropolitan Statistical Areas (MSAs) the limit for all areas in the MSA is calculated based on the highest cost county.

There is no change to the FHA national loan limit “ceiling” which remains at $625,500 and the “floor” which remains at $271,050.   FHA’s minimum national loan limit “floor” is set at 65 percent of the national conforming loan limit of $417,000. The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit.

Any area where the loan limit exceeds the “floor” is considered a high cost area. The maximum FHA loan limit “ceiling” for high cost areas is 150 percent of the national conforming limit. 

Additional information and loan limit adjustments for two-, three-, and four-unit properties, and in Special Exception Areas, are noted in FHA's mortgagee letter. An attachment to the Mortgagee Letter provides information on which counties are eligible for loan limits above the national standard. Borrowers with existing FHA insured mortgages may continue to utilize FHA's Streamline refinance program regardless of their loan balance.

The mortgage loan limits for FHA-insured reverse mortgages will also remain unchanged. The FHA reverse-mortgage product, known as the Home Equity Conversion Mortgage (HECM), will continue to have a maximum claim amount of $625,500, with actual limits based on property value, borrower age, and current interest rates. Reverse mortgages allow homeowners age 62 and older to age in place by borrowing against the value of their homes without any requirements for monthly payments; no repayment is required as long as a homeowner lives in the home. The reverse mortgage is repaid, with interest, when the homeowner leaves the home.

To find a complete list of FHA loan limits, areas at the FHA ceiling, areas between the floor and the ceiling, as well as a list of areas with loan limit increases, visit FHA’s Loan Limits Page.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


Understanding the Flood Insurance Act: What You Need to Know

By Keith Loria

When it comes to selling a home, there are many factors that need to be taken into consideration, one being location. And for those looking to sell a home in an area that’s considered at-risk for flooding, the process can be somewhat challenging. 

Over the past decade, storms like Hurricane Sandy have wreaked havoc on many parts of the country, causing insurance rates to go even higher, which is ultimately having a negative effect on home sales. According to data from the National Association of REALTORS®, from October 2013 to January 2014, over 40,000 home sales were either delayed or canceled because of increases and confusion over flood insurance rates.

This led to some swift action by President Barack Obama, who, following the release of these figures, said that homes in flood-prone areas would no longer be subject to sharp increases in flood insurance premiums when they’re sold, or when a new flood map places them in a higher-risk area.

On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law, which repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act, which was enacted in 2012, and makes additional program changes to other aspects of the program not covered by the Act. 

“The Homeowner Flood Insurance Affordability Act, S. 1926 is the time-out REALTORS® first advocated when dramatic flood insurance premium increases went into effect on October 1, 2013,” said Steve Brown, president of NAR in a statement at the time of the passage of the bill. “This legislation will help homeowners nationwide who are experiencing financial hardship as a result of extreme flood insurance rates that are the unintended consequence of the Biggert-Waters reforms to the National Flood Insurance Program.”

The new law caps flood insurance premium increases and allows below-market insurance rates to be passed on to people buying homes in flood zones with taxpayer-subsidized policies.

Still, it’s not good news for everyone. Those who live in older homes and enjoy subsidized flood insurance rates could still see annual increases in their premiums of up to 18 percent. Furthermore, homes in high-risk areas (labeled with codes starting with A or V on flood maps) will need to pay a new premium surcharge of either $25 or $250 per year to help offset the cost of the new bill. The surcharge applies to all properties that have national flood insurance, even those paying the full-risk rate.

Brown believes this is the first step in what he hopes is a retooling of the way Congress looks at the flood law, and expects it to help with home sales going forward.

FEMA classifies flood risk as something unique to each structure and looks at factors such as the elevation of the property relative to predicted flood levels, the construction style of the building, and the flood risk zone. It also publishes flood hazard maps that show predicted flood levels and flood risk zones based on historical climate information and the best available science. Some common examples of Special Flood Hazard Areas include coastal floodplains, floodplains along major rivers, and areas subject to flooding from ponding in low lying areas.

For more information about the Homeowner Flood Insurance Affordability Act of 2014, contact our office today. 

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.