Are Homeowners Renovating to Sell or to Stay?

ERA Justin Realtor agent Clemenza Goglucci suggested, "Over the past few years, two trends have emerged in the housing market. Home renovations have increased and inventory of homes available for sale on the market has lessened to a degree.  A normal ’housing market is defined by having a 6-month supply of homes for sale. According to a recent Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.  This lower inventory environment has many current homeowners worried that they would be unable to find a house to buy if they were to list and sell their current house, which is causing some homeowners to consider a renovation to fit their needs. This is basically unbalanced as new listings do come on the market daily.

According to Home Advisor, homeowners spent an estimated $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers. One study asked the question, “Given a choice between spending a fixed amount of money on a down payment for a new house  or fixing up their current home, what would you do?”

Some of those surveyed said that they might consider a renovation of their current house. Especially if their current house fits their needs as far as space and accessibility are concerned, then a renovation could make some sense. But if renovations will end up changing the identity of the home and impact resale value, then the renovations may end up costing them more in the long run and a new purchase could be the best option."

Clemenza concluded, "With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this environment could net you more money than your renovations otherwise would.  If you are one of the many homeowners thinking about remodeling instead of selling, let’s get together to help you make the right decision for you based on the demand for your house in today’s market."

BEST 2018 DOLLAR-FOR-DOLLAR IMPROVEMENT BENEFITS

BEST 2018 DOLLAR-FOR-DOLLAR IMPROVEMENT BENEFITS

It would be nice if you could count on getting one dollar back when you sell your house for each dollar you invested in renovations. Most people hope for more than a dollar-for-dollar return. In reality, many improvements return more or less.

For example, in a past Cost Versus Value Report, published by the National Association of Realtors, as reported by Inman News, nationally, the average percent recouped on a bathroom remodel was  90.1 percent. It was 88.1 percent for a deck addition, 81.2 percent for a family room addition, and 79.4 percent for a major kitchen remodel.

“It's important to do due diligence investigations before embarking on a remodel project, just as you would if you were considering buying a new home. There are many variables to consider,” stated Teresa Kriston, Realtor agent with ERA Justin Realty Co.

“Consider that the figures quoted are national averages. The amount recouped on a remodel depends in large part on where you live. There's significant variability from one city to the next, according to the NAR report.  For instance, nationally, homeowners recouped possibly 90 percent on a bathroom remodel. But, the amount recouped for the same job was 109.7 percent in New York City, 100 percent in San Francisco on average.  The return on a remodeling investment will also depend on the value of your home, particularly in relationship to the value of homes in your neighborhood. If you have a small home in a neighborhood of larger, more expensive homes, you could come out ahead by enlarging your home. However, it's important to keep costs in line so that you don't end up over-improving your home for the neighborhood. Buyers tend to discount a home that's priced above the value of other homes in the neighborhood. In areas where home prices are stable, you're likely to recoup more on your remodel investment than you would during times of meager appreciation.

There's a subjective factor that can't be overlooked when remodeling. This factor is often referred to as pride of ownership, but don't discount the value of creature comfort. There's a certain sense of well being to be derived from a home that suits your lifestyle while aptly reflecting who you are. Despite these factors, from an investment standpoint, it makes sense to consider resale value before making an investment in a major renovation. This doesn't mean that you should remodel your home with someone else in mind. But, if your aim is to recoup as much of your investment as possible, it's wise to consider homebuyer preferences in your area. Also keep in mind that while trends change, quality and good taste are timeless.  The NAR Cost Versus Value Report was based on professional judgment rather than on actual sales data. Therefore, the report is somewhat subjective. However, it does point out the importance of carefully considering before remodeling.”

Teresa concluded, “At ERA Justin Realty the words, ‘There is a difference in real estate companies’ is more than a phrase.  We live it every day.  Because of our daily priorities, we proudly received the prestigious ERA worldwide  ‘Commitment to Excellence Award.’ For these reasons ERA Justin Realty has been selected by thousands of buyers and sellers as their Realtor of choice during its 68 years of operation.”

ERA Justin Realty's Joana Ilescu Reviews Best Dollar-For-Dollar Improvement Returns

ERA Justin Realty's Joana Ilescu Reviews

Best Dollar-For-Dollar Improvement Returns

It would be nice if you could count on getting one dollar back when you sell your house for each dollar you invested in renovations. Most people hope for more than a dollar-for-dollar return. In reality, many improvements return less than the amount invested.

For example, a Cost Versus Value Report,  published by a past National Association of Realtors report, and reported by Inman News, that nationally, the average percent recouped on a bathroom remodel was only 90.1 percent. It was 88.1 percent for a deck addition, 81.2 percent for a family room addition, and  79.4 percent for a major kitchen remodel. These percentages vary throughout the country and are only suggested with variations.

“Does this mean that remodeling is a waste of your time and money? No, but  don't go about a renovation in a haphazard fashion. It's important to do your due diligence investigations before embarking on any remodel project, just as you would if you were considering buying a home. There are many variables to consider,” stated Joana Ilescu Realtor salesperson with ERA Justin Realty Co.

“First, consider that the figures quoted are national averages. The amount recouped on a remodel depends in large part on where you live. There's significant variability from one city to the next, according to the NAR report.  For instance, nationally, homeowners recouped approximately 90 percent on a bathroom remodel. But, the amount recouped for the same job was 109.7 percent in New York City, 100 percent in San Francisco, and only 61.3 percent in Denver, on average.  The return on a remodeling investment will also depend on the value of your home, particularly in relationship to the value of homes in your neighborhood. If you have a small home in a neighborhood of larger, more expensive homes, you could come out ahead by enlarging your home. However, it's important to keep costs in line so that you don't end up over-improving your home for the neighborhood. Buyers tend to discount a home that's priced above the value of other homes in the neighborhood. Before remodeling, it's also important to consider your competition. In some areas, certain remodeling projects are taken for granted. For instance, if you're in an upscale neighborhood of older homes where most homeowners have remodeled their kitchen and bathrooms, you may be penalized price-wise by the market if your home is outdated. In areas where home prices are rising rapidly, you're likely to recoup more on your remodel investment than you would during times of meager appreciation. With this in mind, you're more likely to recoup your investment over the long term.” Joana added.

Ron Darby, ERA Justin Realty broker co-owner added,  “There's a subjective factor that can't be overlooked when remodeling. This factor is often referred to as pride of ownership. And, don't discount the value of creature comfort. There's a certain sense of well being to be derived from a home that suits your lifestyle while aptly reflecting who you are. Despite these factors, from an investment standpoint, it makes sense to consider resale value before making an investment in a major renovation. This doesn't mean that you should remodel your home with someone else in mind. But, if you're aim is to recoup as much of your investment as possible, it's wise to consider home buyer preferences in your area. If your remodeling is not in tune with what buyers want, it could actually decrease the value of your home. Also keep in mind that while trends vanish quickly, quality and good taste are timeless.  The NAR Cost Versus Value Report was based on professional judgment rather than on actual sales data. Therefore, the report is somewhat subjective. However, it does point out the importance of carefully considering before remodeling.”

Joana concluded,  “All across the nation, one of the most coveted awards that can be achieved in business is the ‘J.D. Power & Associates’ award.  Only outstanding business entities are honored and receive it. ERA Real Estate was the recipient For Highest Satisfaction for First Time Home Buyers Among Full Service Real Estate Firms.”

Joana and all of the ERA Justin Realty full service Realtor sales persons can be reached at either of their two Rutherford offices at 118 Jackson Avenue and 57 Park Avenue.  By office phone (201) 939-7500, (201) 438-0588 or (201) 438-SOLD. View 1000's of homes at their websites at www.ERAJustin.com and www.ERAJustinRealty.com.