Archives: August 2014

Report: Bigger is Better for National Home Buyers

US New Home ConstructionThe sluggish housing market over the last several years did not have an impact on Americans’ desire for bigger and fancier homes, according to a recent report from USA Today.

Evidently, demand continues to grow for these large estates, especially as the housing market across the nation improves.

This is a fascinating trend on the national housing market and one that is sure to impact both home buyers and sellers.

Americans Love to Own Large, Luxury Homes

The American Dream of owning a bigger and better home is still very much alive across the country.

In fact, as the recent USA Today article noted, many of today’s buyers still want a house that includes as many luxury amenities and features as they can think of – or at least afford.

This may include gourmet kitchens, deluxe bathrooms, spacious decks or screened-in porches.

While this is occurring, experts also note that homeownership rates have remained mostly stagnant. And income growth appears to be lagging behind the rising price of homes.

Meanwhile, the size of families and households continues to shrink, even though the houses themselves are getting bigger.

Experts say that this is because Americans still love the idea of owning a home that makes a statement about them, that demonstrates their status in society.

A Closer Look at This Housing Market Trend

Here is some relevant data on this housing market trend, based on US Census data:

  • The average square footage of newly built single-family homes in the U.S. jumped by nearly 57 percent, from 1,660 in 1973 to 2,598 square feet in 2013.
  • The Northeastern region of the country had the second-highest average square footage, which rose by 65 percent. Specifically, the square footage jumped from 1,959 to 2,636.
  • Meanwhile, the average number of people per household in the U.S. dropped from 3.01 in 1973 to 2.54 in 2013.
  • Specifically, families fell to 3.12 members from 3.48 during the same period of time.
  • As a result of the construction of larger homes, the average sales price of newly built single-family homes in the U.S. skyrocketed by 419 percent from $62,500 in 1978 to $324,500 in 2013.
  • Even if you consider inflation, that still quite a jump, experts say.
  • The Northeast is home to the highest average sales price, which increased by 646 percent from $63,000 in 1978 to $469,000 in 2013.
  • Between 2012 and 2013 alone, the average sales price of newly built single-family homes in the U.S. jumped by 20 percent: from $292,000 to $324,500.
  • Meanwhile, the U.S. homeownership rate continued to drop during the fourth quarter of 2013: from 65.4 during the fourth quarter of 2012 to 65.2 percent.

So What Do Home Owners Get With These Newly Built Homes?

A better question is: What don’t they get?

Here’s a breakdown of these new construction homes and what they offer to buyers:

  • Of the 569,000 homes built last year throughout the U.S., 188,000 (33 percent) contained three or more bathrooms.
  • Meanwhile, 251,000 (44 percent) of last year’s houses featured four or more bedrooms, which is the largest share since 1973..
  • Also, of the homes built last year, 301,000 (53 percent) came with a patio.
  • And 361,000 (63 percent) featured a porch.
  • Meanwhile 127,000 (22 percent) included a deck.
  • Another trend that experts are seeing is more finished basements for added space, according to the report.
  • These homes have mostly hovered around one and two stories, however, despite the increase in size. In fact, 233,000 (41 percent) of newly built homes last year were one story and 305,000 (54 percent) were two stories. Meanwhile, only 31,000 (5 percent) were three stories or more.

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Check back here soon for more pertinent information on the housing market and how it may impact you as a buyer or seller.

We’ve made it our goal to help you stay informed as you navigate the market. After all, the better informed you are, the better prepared you are for securing a successful outcome on the housing market.

Home Improvements That Pay Off When Selling Your Home

Home RemodelingNot all home remodeling projects are created equal – especially when you’re trying to get the biggest bang for your buck when it comes time to sell your property.

So before you spend thousands of dollars on that home remodeling project you’ve been dreaming about, make sure that you’re armed with the facts first.

Today, we’re going to tell you which of the most common home renovation projects are worth the investment, and which ones you’re better off doing without. The answers may surprise you.

Roofs and New Siding: Not Very Glamorous but Quite Impactful

Remodeling Magazine reports that you’re more likely to recoup your investment on such features as your roof or your siding than you are on bathroom or kitchen remodels.

In fact, siding replacement recouped 92.8 percent of its investment while roof replacements recouped 90 percent or more at resale.

Roof replacement appears to be most important to buyers in the east, with home owners recouping an average 96.3 percent of the cost. In the Midwest, that average return was around 71.1 percent.

That’s because home buyers care more about the overall structure of the home than they do about an aesthetically pleasing kitchen.

What’s more, a recently replaced roof or new siding tells buyers that their maintenance costs are going to be low to non-existent for the first few years. And it’s impossible to understate how important that is to buyers.

Kitchens: A Sound Investment or Not?

The consensus is unanimous: Kitchen remodels are an excellent way to spend your home renovation dollars – but only if you don’t spend too much out the gate.

In fact, minor kitchen remodels (in the ballpark of $15,000 or less) returned 92.9 percent of the investment. That number dropped off on bigger remodeling projects in the kitchen.

Some features to focus on in the kitchen include all wood cabinets, commercial-looking appliances, stone floors and stone counter tops.

How About Bathrooms?

Bathrooms are also a fantastic place to invest your home remodeling dollars. Often, home owners are pleasantly surprised to discover that they get a 100 percent plus return on their investment.

For instance, a $9,400 bathroom remodel in Baltimore recently recouped 182 percent of its cost at resale.

Some features that you may want to focus on during a bathroom remodel include floor-to-ceiling steam showers and walk-in showers.

And if you only have one bathroom in your home, spend your money on adding a second bathroom instead of remodeling the only bathroom you have.

Don’t Forget To Consider Your Home’s Curb Appeal!

People often focus their remodeling dollars on the inside of the home but the exterior is just as important – if not more so.

After all, a potential home buyer will form an opinion about your home before they ever step foot inside.

Perhaps that’s why adding siding is such a sound investment when you look at the return you could get at resale.

Another way to make sure your home has adequate curb appeal is by adding a front porch or other architectural features to make your home more inviting.

Give Buyers Extra Room to Grow

Finally, consider adding another room to your home during a remodeling project.

We’ve already talked about the benefits of adding a bathroom. But the same principles hold true for other room additions as well.

In fact, for every 1,000 square feet added to a home, your sales price will increase by more than 30 percent, according a 2005 National Association of Realtors study.

One caveat to this rule: Don’t add so much extra space that your home becomes the most expensive home in the neighborhood. That’s a sure way to turn off home buyers.

Just a Few More General Notes About Home Remodels

RS1551_shutterstock_983846-lprRegardless of what type of project you select, remember that the following factors will also help determine your return on investment:

  • The Value of Your Home
  • The Value of the Homes in Your Neighborhood
  • The Housing Market You’re Located In
  • How Soon You Sell Your Home After the Home Improvement Project
  • The Quality of the Home Improvement Project

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Hopefully you learned something today about home remodeling projects and how much they really benefit you as a prospective home seller.

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Have a great day!