Here’s a Part of the Housing Market That’s Really Booming

Mike Blake/Reuters

The turmoil in the stock market hasn’t hurt homeowners’ plans to spend on their properties this year, according to a new Angie’s List survey.

The survey found that among homeowners who’ve already set their spending budgets for 2016, nearly 79 percent plan to spend as much or more on home improvement projects compared to last year.

That’s good news for service providers, who are also optimistic about 2016. More than 90 percent of them said they expect homeowners to spend as much or more on projects as they did last year.

The survey found that millennials plan to spend as much as or more than older homeowners on home improvements.

The Angie’s List findings confirms a report issued by the Joint Center for Housing Studies at Harvard University last month, which projected that home remodeling would pick up this summer. The Leading Indicator of Remodeling Activities projected that annual spending on home improvement projects in 2016 could surpass its 2006 peak, on nominal terms.

The report shows expected home improvement spending of $148 billion in the second quarter of this year, followed by $155 billion in the third quarter.

Home-improvement projects are making more sense as an investment than they have in recent years. While most renovations don’t pay off dollar-for-dollar when you sell a home, the return on investment for remodeling projects in 2015 increased to 64.4 percent in 2016, up from 62 percent in 2015 and the second-highest return in the past eight years, according to Remodeling magazine. 

Written by Beth Braverman of Fiscal Times

(Source: Fiscal Times)


9 Factors That Can Torpedo Your Home’s Selling Price

Provided by U.S. News & World Report
Provided by U.S. News & World Report

When you put your house on the market, it goes without saying that you want the best price when it sells.

But many sellers shoot themselves in the foot, doing things that will torpedo their home’s selling price and net them less money. Plus, there are certain home and neighborhood characteristics that all the staging in the world can’t overcome, once again dragging down the price.

In a really hot market, or in certain desirable areas, as Redfin Chief Economist Nela Richardson puts it, “any house standing upright can get a bid.” But she also notes that Redfin’s new Housing Demand Index shows that home sales are slowing.

“What we’ve seen is that the market has changed dramatically in the last two months,” Richardson says. “Prices are slowing considerably.”

While inventory of homes for sale is still low and many buyers are still looking for homes, they’re not willing to pay just any price. “They’re making more conservative decisions,” Richardson says. “What our agents are telling a lot of buyers is just wait.”

The latest Case-Shiller index found that housing price growth is slowing, with prices up 4.4 percent in May 2015 vs. May 2014. That’s essentially flat compared with April’s 4.3 percent annual increase, and once season adjustments were factored in, the National Index showed no change from April to May.

“Sellers are still firmly in control, but they’re not getting a free pass,” Richardson says.

Here are nine factors that can keep you from getting the best price for your home.

Overpricing. By far, the biggest mistake sellers make is to set their home price too high, thinking would-be buyers will offer a lower price and they can use that as the starting point for negotiations. “If you misprice it in the beginning, it can tend to languish, and you may end up selling it for less than you would have if you had priced it correctly to begin with,” says Kevin Brown Jr., president of Praedium Real Estate Services in Pittsburgh and a regional director of the National Association of Exclusive Buyer Agents. Houses that are overpriced tend to stay on the market longer, which makes buyers suspicious that there is something wrong with the home. “Right now, people are expecting they will receive multiple offers, and their house will sell for over asking price, no matter what,” says Sabrina Booth, an agent with Redfin in Seattle. “They tend to shy away from houses that come on the market overpriced. We’re seeing less competition at this time.”

Bad pictures. Nearly all home shoppers these days start their searches online, and they decide which homes they want to see based on the photos posted with the listing. Not surprisingly, blurry cellphone shots don’t draw much interest. “People just skip over it,” says Matt Francis, branch manager of Better Homes and Gardens Mason-McDuffie Real Estate in the San Francisco Bay Area. “The millennial buyer is not interested in what it can become.”

Difficulty showing the house. In these days of instant gratification, home shoppers want to see homes as soon as possible and at their convenience. If you make your home difficult to show, fewer prospects will see it, and it can take you longer to find a buyer. “If you don’t show it, you can’t sell it,” Francis says.

Messy neighbors. The proverbial neighbors with the unkempt lawn, couch on the porch and junk cars in the yard do indeed bring down property values. If your neighbors’ houses and yards look bad, home shoppers are likely to put a lower value on your home. You could try to reason with these neighbors and ask them to clean up, or even do the work for them. But your success rate will vary by neighbor, and some may be opposed.

In bad company. If the most recent sales of homes like yours in your neighborhood have been at low prices, that is likely to hurt the price of your home. That’s because real estate agents and appraisers base their view of home value on the sales of comparable homes nearby.

Bad location. If your house is next to an apartment building, a busy street, a school or otherwise is in an area that is considered less desirable, it will sell for less than a comparable home in a quieter area. In family areas, being in a bad school district also hurts home values significantly. In cities that rely heavily on mass transit, being too far from transit stops may be a detriment. If your home is near a noisy road, you may also have trouble getting full value for it.

Compartmentalized rooms or a dark first floor. “People these days want bright, airy, open,” Francis says. If your home is dark or has a lot of small rooms rather than a larger open space, that makes it less desirable and therefore likely to sell at a lower price.

Structural defects. No amount of granite or stainless steel can compensate for structural issues such as foundation problems. Buyers are wary of homes that need these kinds of repairs because it’s difficult to estimate how much they will really cost to solve.

Dirt and grime. If your house is messy, your yard is unkempt and the windows are grimy, it is not going to put its best foot forward. Most buyers will have a hard time getting past that initial negative first impression, and failing to clean up your home could cost you a lot of money.

Copyright 2015 U.S. News & World Report

Written by Teresa Mears of U.S. News & World Report

(Source: U.S. News & World Report)

7 Places that Pay You to Live There

© Thinkstock
© Thinkstock

People are willing to pay a premium to live in some places. That’s because the most expensive U.S. cities—Boston, New York and San Francisco, to name a few—offer abundant job opportunities in high-paying fields, plus plenty of entertainment options.

But what about the other way around? Will some places pay a premium for you to move or live there? We discovered seven that do. They offer such enticements as free lots, housing allowances, tax rebates and student-loan reimbursement to persuade people to join their communities. Many of these places are small Midwestern towns that have struggled to hang on to their younger residents, who often move elsewhere after college for more opportunities. But a few are bigger cities trying to revitalize their urban cores.

If you’re thinking about moving, consider relocating to a place that wants you enough to pay you to move there. Check them out.


Incentive: Cash rebate for new home construction

In 2014, the leaders of this town of 1,020 in southern Minnesota, which bills itself as a “nice place to visit, even better place to live,” recognized that Harmony had a problem. The owner of one of the community’s major employers, Harmony Enterprises, told them that his new employees with young families had complained about the lack of move-in-ready homes, says Chris Giesen, economic development coordinator for Harmony. The city’s leaders also realized that Harmony’s median age was one of the highest and its median income was one of the lowest in Southeast Minnesota.

So in the spring of 2014, the Harmony Economic Development Authority (EDA) launched a home construction rebate program that offers a cash rebate of as much as $12,000 to those who build a new home. Giesen says that there are several existing lots with full city services for sale in the $10,000 to $15,000 range. No new homes have been built yet, but the Authority says it is working with a few applicants. In addition to Harmony Enterprises (a maker of recycling equipment), bridge-building contractor Minnowa Construction is headquartered in Harmony. The town’s large Amish population and Niagara Cave attract tourists.


Incentives: Down-payment assistance, loans for home renovation, and free in-state college tuition

New Haven has been undergoing a revitalization, tackling its high crime rate and breathing life back into vacant buildings and abandoned neighborhoods. But the city is still plagued by a homeownership rate of just 31%—about half the national and state averages. To lure home buyers, New Haven is offering as much as $80,000 in incentivesthrough three programs.

First-time homebuyers who meet income and other requirements can receive a loan of up to $10,000 for a down payment or closing costs. City employees, teachers, police officers, firefighters and military members can get an additional $2,500. The loan is forgiven after five years as long as the homeowner doesn’t sell the house. Homeowners can also receive a forgivable loan of up to $30,000 for energy-saving home upgrades, such as the installation of a new roof, siding, insulation, furnace or electrical wiring. They don’t have to pay it back if they stay in their home for 10 years. And New Haven sweetens the pot even more with the guarantee of free tuition to any Connecticut college for students who graduate from the city’s public schools in good academic standing.


Incentive: Student-loan reimbursement

While millions of visitors flock to Niagara Falls annually, the permanent residents of the city named after the famous waterfalls on the U.S.-Canada border have been leaving for years. In a bid to boost its population, currently 49,468 and shrinking, the city launched an effort to lure young people to its downtown by offering to help repay their student loans.

The Downtown Housing Incentive Program reimburses recent college graduates holding either a bachelor’s degree or a two-year technical degree as much as $3,492 per year over two years for loan payments in exchange for living in designated downtown neighborhoods for the full two-year period. The city dubs the program participants “urban pioneers.”


Incentive: Cash and loans for renters and new homeowners

Detroit is no small town—it’s the biggest city in Michigan. But it has certainly experienced its share of population and economic decline. So to lure people back, the Live Downtownand Live Midtown incentive programs were launched in 2011. To be eligible, you have to be an employee of one of the specific companies located in those areas, and you must rent or buy a home in a corresponding neighborhood.

Both programs provide four financial incentives: a $2,500 allowance toward the cost of an apartment for new renters the first year and $1,000 the second year; $1,000 for existing renters to renew a lease; up to $5,000 for existing homeowners for exterior improvement projects valued at $10,000 or more; and up to $20,000 for new homeowners for the purchase of a home. This last incentive is in the form of a loan that’s forgiven if you remain an employee at a participating company and live at the property for five years, says Elise Fields, of Midtown Detroit Inc., which administers both programs.


Incentives: Tax waivers and student-loan reimbursement

Yes, an entire state—well, much of it—will pay you to live there. Rural Opportunity Zonesin 77 of the state’s 105 counties offer new residents state income tax waivers for as long as five years. And 70 of those 77 rural counties also offer student-loan repayments of as much as $15,000, says Kansas Commerce Department spokesperson Matt Keith. Among other requirements to get the tax waiver, you must have lived outside of Kansas for five or more years prior to moving. To be eligible for student-loan repayments, you must have established residency in a ROZ county after a specified date and have an associate’s, bachelor’s or post-graduate degree, among other requirements. The program has been so popular that some counties have waiting lists, Keith says.

Several ROZ counties have additional incentives of their own to lure new residents. For example, Lincoln, which has a population of 1,297 and describes itself as the “size of a dime with the heart of a dollar,” is giving away free lots to the first 21 applicants who build homes in one of the town’s new subdivisions. You can get a free lot, a free building permit and free water and sewer hookup in Marquette—which despite having a population of only 643 boasts a community garden, art galleries and a motorcycle museum. Osborne, a town of 1,421, is offering free lots in a new subdivision and a five-year property tax rebate. Plainville, population 1,903, is offering free lots for the construction of new homes as well as a 10-year property tax rebate.


Incentive: Annual mineral royalty dividends for all residents

Unlike the places on this list that have launched incentive programs in recent years to lure new residents, Alaska has been paying all of its residents for decades. Actually, sharing its wealth would be a more accurate way to describe it. Alaskans voted in 1976 to put at least 25% of the state’s oil money into a dedicated fund—the Permanent Fund. Money in the fund is invested in stocks and other assets, and the fund pays dividends to residents from earnings on those investments. Annual dividends have ranged from less than $500 to more than $2,000. In 2014, the payout from the state’s Permanent Fund was $1,884—more than $7,000 for a family of four.

Alaska residents, regardless of age, are eligible for a dividend as long as they aren’t absent from the state for more than 180 days a year or haven’t been convicted or incarcerated for a felony or certain misdemeanors. Residents must apply every year from January 1 through March 31 for the dividend.


Incentive: Free lot on which to build your new home

This tiny Midwestern town (population 832) is projected to be even tinier by 2020, declining at a rate of more than 1% annually throughout the next five years. So with a goal of attracting new residents to the area, both the city and Consolidated Telephone Company are offering free lots in specified areas on which you can build new houses or move a modular house.

All available lots are on paved streets with existing utilities. You must commence construction within six months of being granted the lot—and you must complete construction within 24 months.

Written by Kiplinger

(Source: Kiplinger)