One of my favorite posts of the year is the National Association of RealtorsRemodeling Costs vs. Value report. Like last years post, this one will feature the top home improvement projects purely by the numbers.
Unlike last week’s Top 8 Home Upgrades According to Kiplinger, this comes straight from homeowner surveys. What’s even better is that the data is broken down by region, so we’re not getting a national average but instead, we receive numbers that better represent home improvement costs right here in Louisville, Kentucky.
So let’s get started!
The top five, mid-range home improvement projects for Louisville home owners are:
Entry Door Replacement (steel) – 128.9%
Attic Bedroom – 83.1%
Deck Addition (wood) – 80.6%
Siding Replacement (vinyl) – 79.9%
Minor Kitchen Remodel – 78.3%
Below is the full list:
Now let’s look at the top five, upscale home improvement projects for Louisville home owners are:
Siding Replacement (fiber-cement) – 83.6%
Siding Replacement (foam-backed vinyl) – 79.0%
Window Replacement (vinyl) – 76.5%
Window Replacement (wood) – 71.5%
Grand Entrance (fiberglass) – 68.8%
Here’s the complete list:
Similar to last year, siding and window-replacement win the day. Still, it’s interesting to see the numbers of the mid-range gain on the upscale home improvements. Also note that almost all 2009 numbers are down from 2008.
Selling your Louisville home these days often means making it “move in ready.” Today’s buyers don’t want to fix things up right away.
Price cuts seem to be slowing down in some markets, which indicates the real estate market could well be stabilizing, with Heather Fernandez, Trulia.com and CNBC’s Diana Olick.
Here’s an interesting CNBC spot on the stats that show homeowners aren’t cutting prices like they have been. Looks to be another sign that we’re nearing the end of this housing recession.
As always, keep in mind that the Louisville real estate market doesn’t experience the wild highs or lows that plaque other parts of the country (see this post).
With many homeowners looking for the market to rebound before selling, home improvement is now a hot topic! I bet Lowes and Home Depot are enjoying significant growth these past three years.
Let’s put aside the discussion about the money you’d gain by buying a new house at this low point in the market and focus on which mid-range home improvement projects are going to give your Louisville home the best bang for your buck.
Cabinet refacing is a great, cost-conscious option.
1. Reface Your Kitchen Cabinets
Rather than redoing the entire kitchen for $25,000-$50,000, resurfacing your cabinets is an easy, cost-effective upgrade. Having your cabinets repainted will cost you between $4,000-$6,000, but handy homeowners might tackle the project themselves.
2. Replace the Sinks and Faucets
Kitchen sinks may get no respect, but they sure get a lot of use. Sinks have come a long way in design and function. The current trend is toward undermounted sinks (shown here), which looks great and are easier to clean. Such cast-iron and stainless steel sinks cost around $1,000.
3. Replace Your Countertops
Improved laminate countertops are the more affordable options at $25 to $50 per linear foot and silestone carries a $50-$125 per linear foot price tag. For a more expensive designer look, concrete or recycled glass might be attractive options.
Three projects complete and your Louisville kitchen is looking great! Now let’s tackle the bathroom!
To wit, the way fixed-rate mortgages are structured the lion’s share of your first decade’s payments are for interest payments, not to build home equity. Each time you refinance you reset the clock to zero, starting the interest-heavy period all over again.
If interested, read the whole piece because it includes a real life example.
Mar 5, 2010 by Tre Pryor, Editor-in-Chief. News2 Comments
Kentucky HB 394 has passed the House Appropriations & Revenue committee and is now on to the full House and Senate. If this passes, it’ll be great news for home buyers in Louisville KY!
House Bill 394, filed by Rep. Tommy Thompson, and co-sponsored by Rep. Bob Damron, Rep. Scott Brinkman, Rep. Ron Crimm and Rep. David Osborne, passed unanimously out of the House Appropriations & Revenue Committee, and will move to the Senate after passage in the full House.
This bill allows qualified buyers of new homes to utilize the state tax credit of up to $5,000 in conjunction with the Federal First Time Home Buyer Tax Credit of $8,000 for first time home buyers and $6,500 for repeat home buyers.
Prior to its passage, the bill was amended in Committee to also be retroactive for those individuals who were unable to take advantage of the state tax credit due to language incorporated at the Federal level in November of 2009, which inadvertently made the state tax credit of no consequence.
Update 5/12: House Bill 394, sponsored by Rep. Tommy Thompson, has passed the full House and is now in the Senate, where it will be taken up in the Senate Appropriations & Revenue Committee.
We’re getting mixed results in February compared to January. Most areas saw total sales drop but home values increase. For the entire market, average home prices moved up approximately $2700 (not seasonally adjusted).
As always, if you have any questions, please don’t hesitate to contact me.
February 2010
AREA
SALES
AVERAGE
DoM
0 Central Downtown District
10
$134,550
102
1 Downtwn/Old&WestLouisville/Shively
59
$42,211
35
2 Butchertown/Highlands/Germantwn
53
$202,696
88
3 Brownsboro/StMatthews
38
$257,989
106
4 Pleasure Rdg/Valley Station
42
$89,560
86
5 Auburndale/Fairdale/Iroquois Park
34
$116,618
114
6 Buechel/Highview/Okolona/FernCreek
75
$124,810
77
7 FernCrk/Hikes Point/Jeffersontown
60
$190,029
71
8 Hurstbourne/Middletwn/Anchrg
44
$260,789
102
9 Anchrg/Lyndn/Prospct/UpRvrRd
45
$212,863
105
11 Bullitt Co.
48
$135,864
81
19 Spencer Co.
12
$160,986
116
20 Oldham Co. – North
16
$281,576
92
21 Oldham Co. – South
16
$187,825
91
30 Shelby Co.
20
$195,555
123
Source: MetroSearch, Inc. Values are not warranted by LHB.
I was having a conversation yesterday with a very intelligent person about the value of their home. It was during this conversation that I was reminded that while I think about the home valuation process quite often, most people do not. There are many Louisville homes for sale and determining value is critical right now.
After we had been talking for a while, this person asked me to give them the value of their home. He asked it in such a way that it told me he thought there was an exact, singular dollar amount “value” for his home, so I knew we had some “talking to do.”
Simple Principles of Home Valuation
The value of a home depends upon the paradigm of the viewer (the “valuer”). I always like to think that there are four different ways that we can value a home, and homeowners and real estate agents need to marry-up their current motivation levels to determine which value is right at the present time.
Cost is the amount of money that it would take to replace the home today. This number is an estimate of what you would have to pay for a “replacement” home site similar to the one in which the home is sitting, as well as what you would spend to build the actual structure(s) on the property. It is always important to look at this “cost approach” to home valuation so that you don’t kid yourself on what potential buyers could do were this home not available for purchase.
Price is the amount of value established by the homeowner and the listing agent. This is an arbitrary figure that could or could not represent a value that potential buyers would feel compelled to view and potentially purchase the property.
Value is what the property is worth to someone. If you have been in the real estate business as long as I have, then you have heard a few stories about somebody who paid an amount for a home that seemed to be “crazy high” compared to what else was happening in the market.
Market Value is a price range that appeals to many buyers and causes a sale to occur within a reasonable time frame. This is the value that serious home sellers should be seeking from their real estate broker. A Current Market Analysis (CMA) is the report that details the finding of a broker or real estate agent.
Value And Motivation Go Hand In Hand
The most important thing for a homeowner to understand is that their current motivation is the most critical factor when determining the value of their home. In order to illustrate, let us look at three common situations in which many potential home sellers find themselves:
“If I could get a certain amount from the sale of my home, then I could afford to buy the home in the area in which I have always wanted to live.” This is an example of a home seller who has the luxury of setting a price to see what will happen. Unfortunately, this seller will not get their home sold in today’s real estate market, where supply is way too high to generate enough activity to get this home viewed by serious home buyers. Often times, we say this seller will be the “highest bidder on the house,” meaning the seller values the home more than buyers do.
“I know the Johnson’s sold their home down the street for $X, and my home is as nice as that, so I will ask for $X as well.” This homeowner is hoping that a past event will re-occur again in the form of another home sale. And it might. Of course, it most likely will have no bearing on what will happen in today’s real estate market, with a different buyer. Typically, prospective home buyers choose what they feel is the best value on the day that they make their home buying decision. Therefore, the fact that prices have been dropping paired with an abundance of choices for home buyers suggests that this seller will not receive an offer either.
“I need to be out of this home by the end of May to start my new job in Atlanta on June 1st.” This homeowner has a good chance of selling the home as long as he prices his home within a market value range that appeals to many buyers. This price can be determined by looking at comparable homes for sale in Louisville… in other words, his competition, and priced to be the best buy.
The Louisville Home, Garden and Remodeling Show is just around the corner on March 5-7 at the Kentucky Expo Center. Always want to keep my readers up the latest news. If you have real estate related news that you’d like to promote, please contact me.
The Commerce Department said on Wednesday sales of newly built single-family homes dropped 11.2 percent to an annual rate of 309,000 units, the lowest level since records started in 1963, from 348,000 units in December.
Let’s be clear, this statistic is talking about new construction, not sales of existing homes. News isn’t that bleak here in Louisville. Not according to the Courier-Journal who published Louisville Realtors continue sales gains in January this week.
Members of the Greater Louisville Association of Realtors sold 702 houses and condos in January, a 33 percent increase from a year earlier.
It marks the group’s seventh-straight month of double-digit percentage gains from a year earlier.
Color me confused because the very next paragraph states:
With only 529 sales, January 2009 was the slowest month in at least five years, said Lisa Stephenson, executive vice president of the Realtors group.
That seems to contradict the opening paragraphs. When in doubt, I look at the data itself.
Other cities which Bay Area residents, weary of the local housing market bubble, might consider relocating to include: Columbus, Ohio, whose suburbs are job-rich and where 87% of middle-income families can afford a home; Louisville, Ky. where foreclosure rates are very low and there is a stable housing market; Houston, Texas where the energy sector has kept jobs going; and Indianapolis, Minneapolis and St. Louis which made the ranking in spite of middling home-price forecasts because housing in these locations is affordable.
Louisville follows the same real estate trends as other cities in our nation, only to a much lesser degree. But like I posted earlier this month, Louisville hasn’t seen a drop in home values since before 1978. That changed in 2008 and 2009.
Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.
I can attest to this personally, as my clients that are looking to build are more interested in a smaller house footprint but want the home built with more energy-efficient, green technology.
The most popular projects in the past–remodeling the kitchen and bathrooms–have decreased in popularity, as adding a bathroom has taken the honors of the most popular project. This makes sense since, for many homeowners, updating an existing room can be put off because it is often seen as a “luxury,” while for many, the addition of a bathroom is a necessity due to changes in the needs of the family.
Just ask any Louisville home builder how many of their projects are remodels vs. new builds.
Home improvement just sounds complicated. Wouldn’t it be nice to have a few handy tools that don’t kill your budget to improve your home improvement? Just whip out your iPhone and get going on that dry wall or cabinet refinishing project. That’s right, for all you do-it-yourself types and iPhone addicts, your have been answered. We’ve compiled a list of 20 handy, dandy apps that make home improvement projects and mundane chores easier (or at least more fun).
ConsumerReports.org – A trusted resource for consumer product testing. Check the free mobile news and video app for information on products for home, and to get the best bang for your buck. A must-do before you start any home improvement project.
Home Improvement Calculator – A calculator equipped to estimate exactly how much of a certain material you’ll need to complete home improvements. It covers painting jobs, wall papering, tile laying, fences, concrete laying, brick laying, carpeting, gravel and deck building. Enter the measurements for the project’s size and the calculator will do all the work (almost).
Home Improvement Store Finder – For 99 cents, find and get directions to nearby home improvement stores. Simple and convenient when you need a quick phone number or address to a home improvement supply store.
iHandy Carpenter – A toolkit on your iPhone. This app features five carpentry tools, a plumb bob, a surface level, a bubble lever bar, a protractor and a ruler, to make home improvement a cinch. All the tools can be used in landscape mode, and if you calibrate the plumb bob, level bar and surface level, you can use them together as a clinometer to read angles precisely.
Handyman Sidekick – Another easy-to-use calculator for gardening, wallpapering, painting and flooring. It converts and saves units of measurement for easy reference. At $1.99, this app eliminates the need for a contractor on small jobs and saves a few dollars by figuring the amount of needed materials for a project.
Home Sizer – A simple app made to calculate the square footage of a room or your home. It can also be used when designing a new home. The app features a file manager to save your data or your “house” plans and a mortgage calculator to estimate monthly payments for your dream house.
Palettes Lite – A free app to create color palettes. Use it to repaint and develop a color scheme for your entire home. The company also features an upgrade version, Palettes, with more advanced techniques and options at a cost of $9.99.
Warranty – Who knows where to keep all the warranty junk that comes with a new product? This $4.99 app keeps up with it all for you. No more paper stuffed boxes or drawers full of warranty papers. It’s all gathered in one place at your fingertips.
Convert Aid/Converter – Two 99 cent apps that calculate units of measurement for you without the algebra book.
Drywall Calculator – This app adds up the square footage of a room so you can quickly assess how much dry walling you will need for any room in the house.
ConcreteCalc – Similar to the Dry Wall Calculator, the Concrete Calculator app calculates the amount of concrete you’ll need per cubic yard.
EZ Loan Calc – Figure up the money needed for a project and get an estimate of what a loan would cost you. It has endless possibility written all over it.
Distance Calculator – Convert distances easily with the $2 app. No more memorization and calculations for you.
Goal Tender – A nice app to keep your home improvement goals and projects on track. The price is right at $2.99, and it allows you to write down and review your goals and track your success rates.
Flashlight – A free app that glows like a tiny flashlight for dark spots. It comes in handy for midnight trips to the bathroom as well.
Homelogic Mobile Control – An app designed by HomeLogic to control your home with the touch of a button on your iPhone. Use this free app to adjust electronics and other WIFI-enabled systems from your iPhone or the Internet.
Computer Repairs – When you can’t fix the computer yourself despite all the Computer Programming for Dummies you read, use this 99 cent app to look up a professional in you area to help.
Trash Day – For those of us that forget home improvement includes the little things like taking out the trash. Program reminders, and never miss a trash pick-up again.
Heat – A free temperature converter app. It converts Fahrenheit and Celsius as well as Kelvin and Rankine.
Builder Dan’s Toolbox – This toolbox is a reference of building codes for contractors and do-it-yourself folks. Downfalls? The codes are based on Canadian standards, and it’s $6.99 for the download. Keep in mind, nothing replaces the expertise of a professional. If the sink you fixed, with the help of your new iPhone app, is rerouting water to the toilet and flooding the bathroom faster than a tsunami, it may be time to make the call for a pro.
After a couple of down years, it looks like home values in Louisville are heading back up. This information comes from First American CoreLogic.
Home Prices in Louisville-Jefferson County Increase
In Louisville-Jefferson County, home prices, including distressed sales, increased by 0.63 percent in December 2009 compared to December 2008. This compares to November’s year-over-year HPI, which was 0.06 percent.** Excluding distressed transactions, year-over-year HPI for December is 0.11 percent, compared to November which was -0.87 percent.
What’s even better is that they’re forecasting a good 2010. Here’s the 12 Month Forecast, starting December 2009 to December 2010.
Kentucky 3.2% [Single Family Combined] 2.5% [Single Family Combined Excluding Distressed]
National 2.7% [Single Family Combined] 3.5% [Single Family Combined Excluding Distressed]
A friend in the industry passed along this piece of news today:
What’s driving the market: Treasurys fell as improved economic and corporate news reassured investors about the strength of the burgeoning recovery, undermining demand for safe haven assets.
The National Association of Home Builders reported that housing starts jumped 2.8% in January to an annual rate of 591,000, which was more than expected. Housing starts were expected to have reached an annual rate of 580,000 units in January, according to a Briefing.com consensus of economist forecasts. Building permits, a measure of houses yet to be built, fell 4.9% to an annual rate of 691,000 units in January, which was better than expected. The rate of permits was expected to have slipped to 620,000 in January.
Positive news for the market as a whole, not just Louisville real estate. But as this rebound continues expect interest rates to climb as well. If you’ve been waiting to make your move, time could be running out.
We’re blessed to have the chance to take a vacation to a secluded island in the Caribbean. No cells, no Internet, no opportunity for “life” to intrude. Have a great week and I’ll see you upon my return. Via con dios!
The CJ did a little piece on Monday about where the new construction numbers are and where they’re heading. It should be no surprise to anyone following the situation that most of the action is taking place at the low end of the price range due to the Federal home buyer’s tax incentives, but I did find this quote from a National Association of Home Builders economist interesting.
“It’s like, Louisville behaved really well at the party, but for some reason, you were as hung over as everyone else,” Denk said.
So the numbers would lead us to believe that Louisville’s housing market is poised for a rebound, but because that isn’t happening, what are the causes? Unemployment? Concern over the larger, economic picture? There are experts on both sides of these predictions.
January was down from December in large part due to the weather, but also from uncertainty about the economy. There are signs that things will be picking up as we head into the Spring.
As always, if you have any questions, please don’t hesitate to contact me.
January 2010
AREA
SALES
AVERAGE
DoM
0 Central Downtown District
11
$165,907
90
1 Downtwn/Old&WestLouisville/Shively
56
$46,375
64
2 Butchertown/Highlands/Germantwn
54
$159,210
52
3 Brownsboro/StMatthews
35
$201,374
104
4 Pleasure Rdg/Valley Station
39
$88,432
51
5 Auburndale/Fairdale/Iroquois Park
40
$94,728
74
6 Buechel/Highview/Okolona/FernCreek
87
$128,679
73
7 FernCrk/Hikes Point/Jeffersontown
62
$165,544
92
8 Hurstbourne/Middletwn/Anchrg
56
$285,128
85
9 Anchrg/Lyndn/Prospct/UpRvrRd
51
$236,834
82
11 Bullitt Co.
46
$135,667
90
19 Spencer Co.
15
$122,507
80
20 Oldham Co. – North
20
$249,562
98
21 Oldham Co. – South
17
$217,409
105
30 Shelby Co.
22
$179,384
111
Source: MetroSearch, Inc. Values are not warranted by LHB.
Nice piece in Business First of Louisville about how first-time homebuyers have made their move in today’s housing market due primarily to the tax credit currently being offered by the government. This makes a great deal of sense. Most watching the market understand that the recent increase in home sales is happening predominantly in the lower priced tiers where first-time homebuyers are focused.
What does this mean going forward? Are there still renters on the sideline watching to see what might happen next? Most assuredly.
Like I posted the other day, wise real estate decision makers should consider all four of these variables.
Chief among them are, 1) the historically low interest rates, 2) the never before seen tax credits from the government, 3) the reduced home prices, and 4) the large house inventories across the country.
The Business First article hits on #3 with:
The median selling price declined for the second consecutive year in 2009, falling to $132,000, according to the Greater Louisville Association of Realtors. In 2008, the median selling price was $135,000.
I have to agree with Jacki Shafer in the article that these drops are “unprecedented.” Even after the huge 12% increases of the late 70’s, the “rebound” years that followed were still postive. The average annual home value increase here in Louisville, Kentucky since 1978 is 4.76%. So actually having a decrease for 2009 is something of a rarity, even if it’s very small, especially compared to the rest of the nation.
Here you can see a chart of the year home value changes in Louisville, Kentucky going back to 1978. As you can discern, the negative value in 2009 is the first in the past 30 years. *Source: www.fhfa.gov
Act Before the Tax Credit Expires
For people currently considering a move, I would advise them to decide quickly as the current law requires that a sales contract needs to be finalized by April 30, 2010 in order to meet the tax credit requirement. For more specific details, visit the Federal Housing Tax Credit website.
If anyone reading this post is looking for a trustworthy Realtor®, please feel free to contact me and I’ll help you every step of the way.
Home staging can take your ordinary, ho-hum home and instantly make it feel larger, more spacious, warmer, brighter, more cheerful and more welcoming.
It may be hard to believe that simple home staging can do all that, but it’s true! Often times, it is as much about your feelings as it is about the home itself. Home staging helps set the stage, so to speak, so that buyers can immediately feel at home the moment they walk through the door. After all, buying an Louisville home is an emotional process.
If you are unsure how to approach home staging, here are the basics to get you started:
Remove any unnecessary furniture to eliminate a cluttered feeling. Once you have accomplished that, work to move your furniture away from the walls and into warm vignettes. For example, instead of placing your living room sofa against the wall, move it to face the room’s fireplace. In one fail swoop you have created a warm, interesting room that plays up the room’s best feature – the fireplace.
Add warm fabrics, such as throws and pillows, to beds and sofas, thereby instantly adding the feeling of warmth and comfort to the rooms of your home.
Pack up your personal knick-knacks, photographs and the like and instead use simple mirrors and prints on the walls and vases and flower arrangements on the tabletops. You want to allow your buyer to imagine himself in your home, and it’s a bit hard to accomplish this when you have family photographs scattered about.
Remove the clutter from your kitchen counter-tops and instead replace it with bowls of colorful fruit or fresh flowers.
Set the mood with lightly scented candles and scented soaps.
Change up your daily towels with beautiful guest towels.
Eliminate silk or dried flowers and replace them with live plants and fresh bouquets.
If you have a fireplace, light it and instantly set the mood.
Don’t forget your outdoor spaces. Create living spaces with pretty outdoor furniture, and use outdoor area rugs and pillows to pull it all together and create a feeling of comfort and relaxation.
It appears that while home values were down more than expected for 2009 the number of sales increased over 2008. Keep in mind that the following data is from an AP story considering the country as a whole.
Still, prices plunged by more than 12 percent last year – the sharpest fall since the Great Depression. The price drop for 2009 – to a median of $173,500 – showed the housing market remains too weak to help fuel a sustained economic recovery. Total sales for 2009 were nearly 5.2 million, up about 5 percent from 2008.
As we wrote earlier this month about real estate in Louisville, Kentucky, “…from 2008 to 2009, the total of all home sales went up 2.5%, while prices dropped 4.5%.” Our sales experienced half the growth of the nation but only dropped 4.5% compared to the nation’s 12%.
This Briar Hill home in Oldham County is Energy Star certified and it is currently for sale.
I think it’s safe to say that Green is the new Black and that’s not likely to change. But many green products are very costly and their benefit to the environment is relatively small. So, how do we decide which ones make the most sense?
Leigh A. Poltrock is an attorney in Pittsburgh who published a piece called Going Green Without Going Broke. It’s directed at people thinking about incorporating green building practices and products into their new home. There’s a myriad of government programs and incentives centered around energy efficiency in today’s homes that clever consumers can benefit from. This section especially caught my eye:
For an increase of up to 5 percent in development costs, studies have shown that buildings could use 30 percent to 50 percent less energy to heat and cool, 20 percent less electricity, and 10 percent to 20 percent less water. This equates to savings often far exceeding the 5 percent initial premium.
Also, John Morris with Kentucky Quality Homes is one of the few local builders who builds with insulating concrete forms (ICF) which is very energy-efficient and has increased strength against severe storms and tornadoes. Here’s a clip on his building process from FoxNews.
If you’re not planning a move but want to green-up your current home, thedailygreen.com posts simple tips daily to help you go green and spend less. Switching light bulbs is easy (and obvious) but they have a large amount of helpful advice, as well.
Latest Entry
