Friday, October 25, 2013

As Economy Improves, Remodel Cost Rises W/Home Prices

Increasingly, as home prices improve with the economy, more people will undertake a major remodel as opposed to buying a new home. This, of course, assumes they like their present location and basic layout of their home, and would like to remain there. 

With the Bay Area economy now solidly back on track, homeowners’ thoughts increasingly turn to remodeling.
Kitchen remodelWhether it’s long-time homeowners looking to update their surroundings or new buyers wanting to make changes to suit their own tastes, remodeling projects are increasingly popular today.
A recent survey found that homeowners are willing to spend 30 percent of the value of their home when they remodel, and they’re not skimping on the work: They are selecting materials that are more expensive than in years past, with upscale remodeling jobs now costing an average of $102,000.
“The wealth effect is taking hold; consumers are spending again, which bodes well for the entire home improvement industry,” said Dan Fritschen, co-founder of Planese Inc., which offers advice on home-improvement projects and sponsored the survey.
“More people are feeling secure enough during this economic environment that they are remodeling,” said Fritschen, in a statement accompanying the survey results. ”It’s no longer the most affluent. We are at the beginning of a multi-year trend.”
The nationwide survey found that 74 percent of homeowners plan to hire a general contractor for the remodeling work, up from 64 percent in 2010 and 2007, and 43 percent plan to outsource the entire job, up from 36 percent in 2010 and 2007.
And the remodeling projects are getting bigger, too. Homeowners plan to remodel an average of four rooms, with the kitchen their No. 1 choice. Kitchen remodels tend to be more expensive than other rooms, and it’s considered a discretionary expense — unlike a bathroom, which is often viewed as a necessity.
Are you one of those homeowners planning a remodeling project? Take a look at some pointers offered by the National Association of Realtors, in its Realtor magazine.
A recent article included 12 tips for hiring a remodeling contractor, and the latest edition of the NAR’s annual Cost Vs. Value Report advises that sellers can get the most bang for their home-improvement bucks by focusing work on the exterior. Curb appeal counts, because first impressions last longest.
(Image: Flickr/Summit Design Remodeling)

If a remodel is a possibility in your thinking, give us a call. While we do list and sell homes, we also maintain an up to date list of the top contractors and tradespeople in virtually every area for every type of work. All of these individuals have been used by ourselves and or clients for many years and are excellent at their specialties. We'd be happy to give you a reference.

Friday, October 18, 2013

Real Estate Markets Still Look Good

Even with recent cooling of the 2013 rise in values in real estate, the market still projects ahead very favorably.
Look for U.S. housing markets to continue expanding at healthy levels next year, with the pace of sales-price appreciation to slow down and construction of new homes to pick up.Lightbulb
And those whispers of a coming “bubble” in San Francisco real estate? At least one report thinks it’s not going to happen.
Two housing forecasts released within the past week offer new optimism for homebuyers and sellers in 2014 and beyond.
Last Wednesday, an analyst at predictive software company Veros forecast that price-appreciation rates will start to cool in 2014. That will keep prices affordable, particularly in the nation’s healthiest real estate markets.
The housing recovery is strongest in the Bay Area, according to Veros, with 15 percent price appreciation through much of 2014 in the metropolitan area that includes Alameda, Contra Costa, Marin, San Francisco, and San Mateo counties.
Price growth will gradually slow to approximately 5 percent, according to the company’s computer models, fending off fears of a sustained bubble in price growth.
Meanwhile, a report from the National Association of Home Builders on Thursday announced that the ongoing housing recovery is “expected to gain momentum next year even as several challenges remain.”
NAHB Chief Economist David Crowe said in the report that “The cards are in play for a decent and fairly strong recovery in 2014 and particularly in 2015.”
Homebuilders predict that construction of single-family homes will rise 17 percent in 2013 and jump an additional 31 percent next year. The NAHB echoed the conclusions of the Veros forecast, predicting that the growing availability of homes will help slow price increases in 2014 and beyond.
Another bright spot, according to the NAHB, is a rise in household formations that were delayed during the economic downturn, as college graduates and young professionals were forced to move back in with their parents or double up as roommates. The United States was producing 1.4 million additional households every year at the height of the housing boom, but that figure plunged to 500,000 during the depth of the recession. Today, that number is back up to 700,000.