Home improvements that sell

Six hundred real estate agents nationwide were surveyed to determine the top 10 low cost, do-it-yourself home improvements people need to perform for the most bank for their bucks.

by Broderick Perkins
© 2011 DeadlineNews.Com

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Deadline Newsroom - One of the few things you can do in today's market to shore up or protect the value of your home is to give it a makeover.

That's especially true when it's time to sell your home.

In its "Home Sale Maximizer" survey, HomeGain.com recently announced home improvement and home staging efforts that get the job done.

The work doesn't have to cost a lot of money.

Six hundred real estate agents nationwide were surveyed to determine the top 10 low cost, do-it-yourself home improvements people need to perform for the most bank for their bucks.

"Sellers need to prepare their homes for sale before putting them on the market," said Louis Cammarosano, General Manager at HomeGain.

"Homes that have initial appeal have a better shot at selling faster and closer to the asking price than homes rushed to the market with no improvements," Cammarosano added

Right now, home owners who beat the spring rush and get in a contractor's pipeline of work orders can have a negotiating edge.

With new home construction at low levels, more materials and labor are available for remodeling resulting in shorter project schedules and often lower project costs.

But those low costs aren't going to last forever according to the latest A New Decade of Growth for Remodeling report from the Joint Center for Housing Studies at Harvard University.

"As both the economy and the housing market stabilize, so too will homeowner improvement spending," says Abbe Will, a researcher at Harvard's Remodeling Futures Program.

Over the coming years, remodeling expenditures are expected to increase at an inflation-adjusted 3.5 percent average annual rate, below the pace during the housing boom, but sharply recovering from the recent downturn.

Market fundamentals -- the number of homes in the housing stock, the age of those homes, and the income gains of homeowners making improvements -- all point to increases in remodeling spending.

"Metropolitan areas with rising house prices, older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures, such as Boston, San Francisco, and Los Angeles, are well-positioned for an upturn in remodeling activity," says Eric Belsky, managing director of the Joint Center.

From HomeGain, the top home improvements that real estate agents recommend to home sellers nationwide, based on average cost and the return on the investment (ROI), are:

Cleaning and de-cluttering: $290 cost; $1,990 price increase; 586 percent ROI; 99 percent recommended.

Lightening and brightening: $375 cost; $1,550 price increase; 313 percent ROI; 97 percent recommended.

Home staging: $550 cost; $2,194 price increase; 299 percent ROI; 80 percent recommended.

Landscaping: $540 cost; $1,932 price increase; 258 percent ROI; 93 percent recommended.

Repair electrical or plumbing systems: $535 cost; $1,505 price increase; 181 percent ROI; 92 percent recommended.

Update kitchen or bathroom: $1,265 cost; $3,435 price increase; 172 percent ROI; 75 percent recommended.

Replace or shampoo carpets: $647 cost; $1,739 price increase; 169 percent ROI; 98 percent recommended.

Paint interior walls: $1,012 cost; $2,112 price increase; 109 percent ROI; 96 percent recommended.

Repair damaged floors: $931 cost /$1,924 price increase; 107 percent ROI; 93 percent recommended.
Paint outside of home: $1,467 cost; $2,222 price increase; 51 percent ROI; 81 percent recommended.

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Silicon Valley Home Improvement Bargain Alert

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom – Keep an eye out for home improvement bargains.

A national trend is pointing to more homeowners sitting on the fence over home improvements and that could mean it'll get easier to drive a hard bargain and negotiate to get more work done for less.

Homeowners are still bullish on home improvements, but with the brakes on appreciation and the squeeze on mortgage money, more and more homeowners are thinking twice about getting work completed.

Local contractors say stores of built up equity earned during the last housing boom is keeping the trend away from Silicon Valley, but that may not last.

"These days, my remodeling clients are a lot more cautious, deliberate
and circumspect about their remodeling goals and monetary outlays," said Clayton Nelson, a residential remodeling contractor/owner of Clayton Nelson & Associates in Los Gatos.

The Leading Indicator for Remodeling Activity (LIRA), at Harvard University's Joint Center for Housing Studies projects home improvement expenditures in 2007 will fall 2.3 percent compared to 2006.

By the second quarter of 2008, expenditures will be down 4.2 percent from the previous four quarters and the downturn is expected to continue further into 2008.

"The recent problems in credit markets are expected to dramatically reduce the level of cash-out mortgage refinancing activity," said Kermit Baker, director of the Remodeling Futures Program at Harvard's Joint Center.

"Given that equity withdrawals have been a key source of funding for home improvements, market spending is expected to suffer," he added.

Home improvements are always a good way to sustain and bolster a home's value in any market.

Seventy-four percent of consumers recently polled by Opinion Research Corporation said that making renovations or home improvements now will help them get the most money when they decide to sell.

Sixty-seven percent said they plan to initiate a home improvement in the next 12 month, but because they are pinching pennies, the majority plan to paint, rather than take on larger remodeling jobs.

The poll asked consumers where would renovations give them the most return and 63 percent of homeowners said a kitchen do-over while 51 percent said just buying new or refinished kitchen cabinets will add to resale value. Sixty-seven percent said painting the interior or exterior will add value. Other jobs frequently mentioned were bathroom remodels, 58 percent; new carpeting, 54 percent and new or refinished hardwood floors, 49 percent.

Dan Fritschen, Sunnyvale founder of the RemodelOrMove.com and RemodelEstimates.com Web sites said preliminary results from his Remodeling Sentiment Report, a semi-annual survey of 5,000 homeowners nationwide, shows a trend similar to Harvard's study.

Preliminary breakouts for Silicon Valley, however, "shows a divergence from
the national data," says Fritschen, also author of the book "Remodel or Move" (ABCD Publishing, $15.95).

"Silicon Valley is interested in the same types of projects as the national numbers as well as larger remodels, more than 20 percent of the home's value – but due to the increase in home prices in Silicon Valley, the wealth effect is still strong and Silicon Valley homeowners are not following the nation in finding ways to economize," said Fritschen.

That may not apply to all regions in Silicon Valley, including east, central and south San Jose, where prices and home values have fallen. Silicon Valley's median price is rising because sales in high-end homes have been a larger-than-normal slice of the sales pie this year.

As sales continue to plummet at record levels, even high end homes are likely to feel the pinch. A recent 12-page Goldman-Sachs report says California home prices are over-valued by 35 to 40 percent.

"As homeowners become increasingly concerned about falling house prices and a slowing economy, home improvement spending is dragging," said Nicolas P. Retsinas, director of the Joint Center for Housing Studies.

But in Silicon Valley, the tech money factor helps overcome equity loss for many, says Cindy A. Carey who, along with husband Phil operates San Jose-based Starburst Construction.

Market conditions aren't lost on Carey who says the company is marketing to increase exposure to current clients. However, the company continues to enjoy conditions unique to Silicon Valley.

"There are a lot of people in this valley who do not rely upon their home for home improvements. People in our area have a lot of opportunities, via stock options, bonuses and more to pay for their home improvements," Carey said.

• DeadlineNews.Com's Home Improvement Center


© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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