The National Association of Realtors just released The 2008 Cost vs. Value Report.  The Report compares construction costs with resale values for 30 midrange and upscale remodeling projects comprising additions, remodels and replacements in 79 markets across the country and found that exterior remodeling projects return the most money as a percentage of cost.

 The resale value of any given remodeling project depends on a variety of factors; A home’s overall condition, availability and condition of surrounding properties, location, and regional economic climate are all factors that will influence the value of any remodeling project. Not every neighborhood will support additional renovations, that’s why it’s important to consult with professionals like Realtors in your area. Realtors see hundreds of homes every year and can provide valuable insight into what projects and improvements will make a difference with buyers in your area.

Here are some of the highlights from the survey:

•          Wood deck additions and all types of siding replacements returned more than 80 % of project costs

•          All types of window replacements – upscale and midrange– 76 %

•          A major midrange kitchen remodel: 76.0 %

•          A minor midrange kitchen remodel: 79.5 %

•          A midrange bathroom remodel: 74.4 %

•         A midrange attic-to-bedroom conversion: 73.6 %

•        Midrange basement remodel: 72.7 %

•          The regions that generally returned the lowest percentage of costs were New England,  East and West North Central, and Middle Atlantic

 This Week’s Real Estate Insight:

While these renovations will not return 100% of the investment, they often can mean the difference between your house even selling at all, potential buyers “become their own contractors” and go around adding up all the potential costs and subtract that from their offering price.  You might be apprehensive about a major renovation in this economy, but that can work in your favor; you can probably bargain with contractors as  they are feeling it too.  But don’t go just by price, make sure you get good references for contractors

 

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This week I got an email from a young man in New Jersey who has been thinking about taking the plunge and buying his first home, he has been listening to the show via the podcast, and is grateful for the advice I have been giving. There are a lot of myths and half-truths surrounding the real estate market these days, and it can be pretty daunting for a first time buyer, now I am not saying that everything is Rosy, but if you are in it for the long term, Real estate is still a great investment, and there are some great programs for financing for fist time buyers.

The National Association of Realtors released their third quarter survey last week and reported that 28 out of 152 metropolitan areas showed increases in median home prices from the same quarter in 2007, 4 remained unchanged and 120 declined. The typical seller purchased their home six years ago and in spite of the recent downward price trend, has experienced net equity gains. Nationally, homes increased 18.3% since 2002, and 90 % of all metro areas show six-year price gains.

 With historically low prices and interest rates, coupled with the improved FHA  guidelines, and the first time homebuyer’s credit, it’s an optimal time for entry-level buyers with a long-term view, and the National Association of Realtors reported that  41% of all transactions involved 1^st  time homebuyers in 2007. According to the NAR report, the median income for a first-time buyer was $60,600 and typical first-time buyers bought homes costing $165,000. Of first-time buyers who made a down payment, 69 percent used savings and 26 percent used money from a friend or relative. Another 7 percent received a loan from a relative or friend, while 16 percent used funds from their investments. A fixed-rate mortgage was chosen by 92 percent of those surveyed.

For First time homebuyers, The biggest fear is the unknown, Homeownership doesn’t come with a manual, and a little understanding will go a long way, especially in these economic  times, According to data from NeighborWorks America, a community advocate group, foreclosure rates for homeowners who attended  homeowner education programs was 20 times less than that among subprime borrowers ,and they performed three times better than those in the prime mortgage market during the second quarter of 2008.

 To that end, Residential Properties LTD and Homestar Mortgage will be hosting First time home-buying seminars throughout the state starting after the first of the year.  This week Steve and I talked with Ian Barnacle a sales associate in Residential Properties Providence office, Ian offered his perspective both as a buyer’s agent who helps first time buyers, and as a first time buyer himself.

This Week’s Real Estate Insight:

 

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