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To Renovate or Not to Renovate Before You Sell

from Keeping Current Matters

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you’re thinking of selling this season.

1. There aren’t enough homes for sale right now.
A normal market has a 6-month supply of houses for sale, but today’s housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there’s only a 1.9-month supply of homes available today. As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market that’s moving so quickly, it makes sense to sell your house when buyers are scooping homes up as fast as they’re being listed. Spending costly time and money on renovations before you sell might just mean you’ll miss your key window of opportunity. While certain repairs on your house may be important, your best move right now is to work with a real estate advisor to determine which improvements are truly necessary, and which ones are not likely to be deal-breakers for buyers.

Today, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after, even if it means putting in a little extra work. Home Advisor explains:

“When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvement and doing on average 30% more projects.”

In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.

2. Focus on getting a good return on your investment.
When planning any bigger projects to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or bathroom renovation, roof repairs, or other major work, but definitely not all of them. You might be surprised by how well your house could fair in today’s sellers’ market. Hanley Wood states:

“The 2020 Cost vs. Value report shows a predictable increase in costs for all 22 remodeling projects but a consistent dip in the perceived value of those projects at the time of home sale, as estimated by real-estate professionals in more than 100 metro areas across the U.S. This results in a slight downturn on the return on investment for nearly all projects relative to the trends we saw in last year’s report.”

Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they won’t make that money back when they sell their house. According to the 2020 State of Home Spending report from Home Advisor:

“The average household spending on home services rose to $13,138, an increase over last year’s survey results, where homeowners who did projects spent $9,081 on average in 2019.”

Before you renovate, contact The Butch Cazin Team to see if it’s the best course of action. You may find out that putting your house on the market as-is will help you sell quickly, and it may result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line
We’re in a strong sellers’ market, and that means you have the leverage to sell your house on your terms. Give us a call today to determine if renovating is really the best way to spend your time and money before you sell.

READY FOR TAX SEASON? HERE ARE A FEW HOUSING-RELATED TAX TIPS TO CONSIDER

READY FOR TAX SEASON? HERE ARE A FEW HOUSING-RELATED TAX TIPS TO CONSIDER
February 15, 2021
By Boomer Foster, President, General Brokerage and Gary A. Scott, President, General Brokerage.

It’s hard to believe it’s been nearly a year since the Covid-19 pandemic began and changed the way we live, work and play. Although tax filing deadlines were extended last year due to the pandemic, this year, the deadline is back to its usual April 15 date. As you prepare your 2020 taxes, here are a few housing-related items to keep in mind.

Home interest deductions.

Mortgages that closed before Dec. 14, 2017: A married couple filing jointly and single filers can deduct mortgage interest on a combined debt limit of $1 million.
Mortgages that closed after Dec. 14, 2017: For both primary residences and second home loans, mortgage interest can be deducted on a combined debt limit of $750,000.
Property tax deductions.

Taxpayers who itemize can only deduct up to $10,000 on a combination of state and local property, income and sales taxes. This applies to property taxes on your primary residence, a vacation home and undeveloped land.

Capital gains tax exclusions.

Married-joint filers can exclude up to $500,000 and single filers can exclude up to $250,000 when selling their primary home, provided they’ve lived there two of the past five years.

Those are just a few of the housing-related tax laws. Please consult your tax advisor for more information on how these and other tax deductions may apply to you.

MARKET UPDATE – DECEMBER 2020

While 2020 has been an incredibly challenging year, housing turned out as a bright spot. Despite the impact of the coronavirus pandemic, homeownership rates rose to 67.4% in the third quarter, up from 64.8% the same period in 2019.
The fundamentals are in place for a continued strong housing market in 2021, particularly with expectations that mortgage rates will remain around 3%. Here are a few more of our predictions for the year ahead.
Home prices will rise. The law of supply and demand will drive prices higher, with 5% to 6% increases predicted on average.
Affordability will remain mostly positive. Low mortgage rates will offset rising prices, increasing the number of households who can afford to buy a home.
Inventory challenges will continue. While builders are expected to construct homes at a faster pace in 2021, there’s still a gap between demand and supply for new and existing homes.
Increased teleworking will influence housing. People will continue to work from home, affecting where they’re shopping for homes and what they’re looking for in those properties.
Vacation home markets will stay hot. In 2020, homeowners with rising equity and investors with high stock market profits drove a spike in demand for homes in coastal markets, which will continue next year.
Technology remains critical. Virtual tours, remote closings and video conferencing kept real estate moving in 2020, and virtual buying and selling will continue to lead the way in 2021.
Whether you’re looking to buy, sell or invest in real estate in 2021, we can help. With our partners in mortgage, title, insurance and moving, our Long & Foster family has you covered for all your real estate needs. Happy Holidays!

Weekly Update: July 13, 2020

We’re halfway through the year and many are curious to know how the real estate market is measuring up to past years – especially with this year’s added challenges from the COVID-19 pandemic. While we expect some bumps in the road in the coming months, as of today, the market looks good.

Mortgage rates continue to decline. Last week mortgage rates dropped to an average of 3.03% for the 30-year-fixed rate. This new low has helped spur both home sales and refinances.

Consumer sentiment is moving in the right direction. Consumer sentiment is one of the most important metrics in determining the health of the real estate market. For June, consumer sentiment came in at 78.1, up from May’s low of 72.3.

Inventory remains low and people are still looking to buy. Active inventory was down 10% in the first week of July compared to the same week in 2019, while new listing volume was up by 22%. Showing activity of homes on the market was up 27.6%.

Median sale prices rose while homes sold faster. In most areas, median sale prices of homes were up slightly in June. The average number of days homes spent on the market fell by about 2 days.

The stock market is up. Rising numbers in the stock market can likely be attributed to good employment numbers from June as well as hopes for a vaccine for COVID-19. Last month brought another 4.8 million jobs, which was higher than predicted, and unemployment fell to 11.1%.

The bottom line is if you’re planning to sell, I recommend putting your house on the market before fall. There are many buyers out there who are ready and waiting for more inventory to come on the market, and presidential election years typically come with a slowdown in home sales in the weeks surrounding the election. Similarly, if you’re looking to buy, let me know. We can start your virtual house hunt today.

Let me know if you have additional questions. I’m happy to assist you with your real estate needs.

Weekly Update: June 26, 2020

As we approach the end of June, most states are gradually reopening businesses and pent-up demand for housing is driving a busier than usual summer. Buyers and sellers are cautiously re-entering the real estate market, and with their return, here are some trends we tracked this past week.

Mortgage rates. Compared to the previous week, mortgage rates were flat but remain at all-time lows, allowing buyers to purchase more home for their money.

Stock market. The Dow remained volatile, but it was down by week’s end, due to the rise in the number of reported coronavirus cases.

Unemployment claims. Although 1.48 million people applied for unemployment, there’s been a steady decline of claims for 12 consecutive weeks.

On the real estate side, year-over-year listings were flat, but new contracts increased by double-digits. Home showings were over 30% greater compared to the same week in 2019, demonstrating high consumer demand for housing.

Window of opportunity. Historically, national elections bring uncertainty that can lead to a slight lull in real estate the fall before that election. If you’re thinking about buying or selling a home, the time to do so is now.

As usual, the health and safety of our clients is our priority. Our virtual buying and selling programs continue to lead our customers on their journeys home. If you’d like to know more about how I can help you, virtually or in person, with your home-buying or selling needs, I’m ready to assist you.

Weekly Update: June 12, 2020

It’s been an interesting and historic week for our economy and the real estate industry. As states and businesses open, a few trends have emerged.

Mortgage rates. This week, rates dipped below 3% for the first time ever, allowing buyers to get more home for their money.

Unemployment claims. About 1.5 million people applied for unemployment, which was the lowest number we’ve seen since the coronavirus (COVID-19) pandemic began.

Stock market. The Dow was volatile this week, and we are expecting continued market fluctuations as we move through the health crisis.

“Spring” market. In real estate, the busy spring market traditionally occurs in April and May, and it has shifted to June and July. Upward positive trends continue, fueled by pent-up demand and the dip in mortgage rates. Although inventory dropped this week, 80% of the homes that were previously taken off the market have now been actively listed for sale. Property showings were up by double-digits compared to the same time last year and at the highest levels we’ve seen since February.

To stay updated on what’s happening in your market, or for professional guidance through the process of buying or selling a home, don’t hesitate to contact me via phone or email.

Wishing good health to you, your friends and family.

Weekly Update: June 5

It was a busy week in the real estate market, with trends continuing to move in the right direction. Mortgage interest rates decreased to 3.15%, which helped spur a 18% jump in mortgage applications compared to the year prior. In contrast, when the coronavirus (COVID-19) pandemic was starting about six weeks ago, mortgage applications were down 35% annually.

The stock market also moved upward, fueled by an extremely positive jobs report. While economists were estimating unemployment would hit 20%, reports instead showed that 2.5 million jobs were added in May. That’s the biggest increase the country has experienced in the history of tracking those numbers.

On the real estate side, the volume of home showings last month was higher than it was in both May 2019 and 2018. Just last week, Long & Foster, as a company, had over 1,000 new listings and wrote contracts for over $760 million in homes. We believe real estate’s strong performance in May will set the tone for June and July.

As we focus on positive economic indicators, we also wanted to acknowledge this was an emotional week for our country. I’m proud to be affiliated with Long & Foster, a company that supports diversity, equality and opportunity, and that condemns intolerance, racism, bigotry and any other forms of hatred and injustice.

Please reach out to me with any questions you have about the real estate market and let me know how I can help you. As always, stay safe and healthy.

Weekly Update: May 29, 2020

With coronavirus-related restrictions easing and the economy reopening, real estate activity has been trending in a positive direction. At Long & Foster Real Estate, we are cautiously optimistic about the future.

While transactions have declined since March, they did not drop as much as many industry experts predicted. May has been more favorable, with increasing numbers of properties under contract and new listings across the Mid-Atlantic, according to MLS data.

Here are a few other promising economic metrics.

A balanced market. Inventory shortages have prevailed for the last 48 months. While the number of homes for sale remains low, demand for properties has leveled out. This allows qualified buyers to get the home they want with low interest rates.

Property appreciation. In April, the median sale price increased 9.3% and the average sale price was up by 7.2%. Provided housing demand continues to outpace supply, home prices should remain stable, if not increasing.

Quicker home sales. It took 11 fewer days to sell a home in April than it did in March, resulting in a 38.9% decrease in the average number of days that a property remains on the market.

Consumer confidence increase. Although consumer confidence was expected to decline from April to May, it rose month-over-month. We expect to see continued upward movement going forward, as businesses reopen and further progress is made toward a vaccine.

I’ll continue to keep you updated on the real estate market and the effects we’re seeing from the pandemic. As always, feel free to reach out if you have any questions. In the meantime, stay safe and healthy.

Weekly Update: May 22, 2020

Coronavirus (COVID-19)-related restrictions are slowly loosening across our region, and we’re seeing some upward real estate trends as a result. Here’s some of what’s currently occurring, as well as what we expect to see in the coming weeks.

Mortgage rates remain low. We’ve seen rates drop again this week and they’ve been trending under 3.3% for the last four weeks, which allows buyers to get more home for their money.

Stock market sees positive movement. Gaining much territory, the Dow Jones Industrial Average increased about 800 points in the past week.

Consumer sentiment inches up month-over-month. The University of Michigan Consumer Sentiment Index, which measures consumer confidence, was expected to decline, but instead rose from 71.8 to 73.7. The upward tick is likely due to the stimulus bills and the economy starting to re-open.

What’s trending in Long & Foster’s footprint.

Although all real estate is local, we’re seeing favorable trends where Long & Foster conducts business. Weekly inventory, which includes active, coming soon and temporary off-market listings, are about the same as they were this time last year. With more people venturing out to shop for homes, more properties are going under contract. Sales of single-family homes are outperforming condos and townhomes, especially in more densely populated areas, and home values are appreciating.

To stay updated on what’s happening in your market, or for professional guidance through the process of buying or selling a home, please contact me via phone or email.

As always, please stay safe. My best to you, your friends and families.

Weekly Update: May 15, 2020

We’ve lived in an uncertain world for more than two months, as the coronavirus pandemic has affected the economy and real estate industry. As the country works to reopen over the coming weeks, I’ll be watching closely to see where the market’s headed and what that means for you, whether you’re actively buying, selling or just looking.

In the meantime, here are a couple trends my team at Long & Foster expects to see going forward.

Renewed interest in the suburbs. After consumers have spent weeks in their homes social distancing, many may be thinking about getting a place with more space. Instead of moving to a downtown condo, buyers might look toward suburbia, where they can get larger properties with yards. Already, we’ve seen a rise in sales of single-family homes, according to data from Bright MLS.

A balanced market. Supply and demand drive the real estate market, and we’ll see the two better balanced as we move into the recovery. While inventory remains low, demand for these properties has leveled out. For more serious and qualified buyers, this gives you more space to get the product you want, all with continued low interest rates.

If you have any questions about the real estate market, please don’t hesitate to contact me. As always, I hope you and your family are staying safe and healthy.