ORLANDO, Fla. – Before tackling a home improvement project, Florida Realtors® recommends that a homeowner do a little research first. For example, if a home improvement project costs $1,000, how much money will the homeowner get back if he sells the home – what is the return on investment (ROI)? For 2019, a garage door replacement offers the best return, at 97.5% of costs recouped at resale, according to Remodeling Magazine’s annual Cost vs. Value Report.
The 2019 report surveyed more than 3,200 real estate professionals about returns for 22 projects in 136 U.S. markets, an increase from 100 markets last year. It compares the cost of popular remodeling projects to how much the investment will improve a home’s resale value.
For all projects, the overall cost-to-value ratio is 66.1 percent, which is slightly ahead of last year but well below the decade-high of 71.2 percent in 2014.
As in prior years, there are significant variations in different regions. The average payback nationwide for the 22 projects in the 2019 Cost vs. Value report ranges from a high of 123.8 percent for a garage door replacement in the Pacific region, to a low of 45.0 percent for an upscale master suite addition in the mid-Atlantic region.
Due in part to sharp increases in material costs, the percentage of costs recouped at sale time is trending downward for all the replacement projects. Material costs tend to comprise a greater proportion of replacement projects compared with larger indoor remodels, however, which have a higher percentage of labor costs.
2019 top 10 projects by percentage of cost recouped
- Garage door replacement (97.5%)
- Manufactured stone veneer (94.9%)
- Mid-range minor kitchen remodel (80.5%)
- Wood deck addition (75.6%)
- Siding replacement (75.6%)
- Steel entry door replacement (74.9%)
- Vinyl window replacement (73.4%)
- Fiberglass grand entrance (71.9%)
- Wood window replacement (70.8%)
- Composite deck addition (69.1%)
Highlights from 2019 report
- Rising materials costs impact rates of return
While the overall changes are modest, the latest Cost vs. Value report reflects the robust market the remodeling industry has enjoyed over the past year. But costs have correspondingly increased, and in some cases, significantly so. These increases are likely due to the tariffs that have roiled commodity markets, which have led to a slight downturn in the percentage of costs recouped for some projects; but overall, returns are up slightly compared to last year.
- Curb appeal projects continue to provide the highest returns
Nine out of the top 10 high-return projects are exterior replacement – or high curb appeal – projects. The three exterior projects with the highest recoup on investment are garage door replacement (97.5%), manufactured stone veneer installation (94.9%), and a wood deck addition (75.6%). Siding replacement and window projects also provided high returns, with the highest recouping interior project being a minor kitchen remodel (80.5%).
- New for 2019
Two new projects were added to the 2019 Cost vs. Value Report. The first is a roofing replacement job that adds standing-seam metal roofing. Compared with asphalt shingles, metal roofing costs significantly more but brings with it much greater durability. The second project is a revamp of the universal design bathroom, which was first introduced to Cost vs. Value in 2017. While the overall dimensions and features of the current project are comparable, the finishes and mechanicals – including tiled walls and shower, humidity-controlled ventilation and radiant-heat floors – are more consistent with an upscale project than the previous specs allowed.
- Think like a broker
The reason for high returns on exterior projects, and especially façade facelifts, stems from the valuations set by the real estate community. “Curb appeal” and “first impressions” are central to a real estate professional’s estimation of resale value. Granted, a home’s exterior will only persuade potential buyers to see more, and first impressions can vary from one individual to the next. But the impact these impressions make is critical in setting the stage for what a buyer is willing to pay for a home.
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ORLANDO, Fla. – If “all the world’s a stage,” as Shakespeare said, then a home is fertile ground for staging, too – and it can help sell that home, according to a new survey from the National Association of Realtors® (NAR).
The survey, NAR’s 2019 Profile of Home Staging, found that 83 percent of buyers’ agents say staging makes it easier for buyers to visualize a property as their future home. What is staging, exactly? It’s the practice of styling and furnishing a property for sale in a way that enhances its attractiveness to potential buyers. Fans of many homebuying and selling TV shows on HGTV or DIY networks are familiar with staging, how it works and ups the home’s appeal to potential buyers.
More than half of sellers’ real estate agents said that staging a home decreases the amount of time a home spends on the market, with 25 percent saying that it greatly decreases the time and 28 percent saying it slightly decreases the time, the report said.
TV’s impact on homebuyers
The report contains a new section called “Buyer Expectations,” which focuses on how home buying television shows impact Realtors’ businesses and how they’ve changed homebuyers’ views about the home buying process.
While 38 percent of respondents say that television shows on the home buying process have had an impact on their business, 32 percent witnessed no impact and 31 percent do not know if they have an impact.
The report found that 20 percent of buyers were disappointed by how “real” homes look compared to homes they saw on television shows; 39 percent of respondents found the home buying process more difficult than they expected; and 10 percent of respondents say that buyers felt homes should look the way they do when staged on TV shows.
Only 6 percent of buyers’ agents said that staging had no impact on buyers, while 40 percent said staging has an effect and 52 percent said staging affects some buyers.
Staging’s impact on the home sale
Buyers’ agents say that the living room is the most important room to stage (47 percent). The next most important are the master bedroom (42 percent) and then the kitchen (35 percent). Sellers agents agree but in reverse order. The guest bedroom is considered least important.
Forty-four percent of buyers’ agents report that staging increased the financial offer on a home; 25 percent say it increases its dollar value by 1 to 5 percent, and 12 percent said it increases the dollar value 6 to 10 percent. But 29 percent of buyers’ agents say it has no impact on dollar value. Only 1 percent of buyers’ agents felt it has a negative impact.
Sellers’ agents report even more value added from staging: 22 percent reported an increase of 1 to 5 percent in dollar value; 17 percent reported an increase of 6 to 10 percent; 5 percent reported an increase of 11 to 15 percent; and 2 percent reported an increase of 16 to 20 percent.
No sellers’ agents reported a negative impact from home staging.
When deciding which homes to stage, 28 percent of sellers’ agents say they stage all of their clients’ homes before listing them, while 45 do not stage homes before listing them, though they do recommend that sellers declutter their homes and fix any faults within the property. Another 13 percent said they stage only difficult-to-sell homes, and 7 percent stage only homes in higher price brackets.
Who pays for the home staging? The seller pays before listing the home 18 percent of the time, while sellers’ agents personally provide funds in 26 percent of cases; 17 percent of the time, agents will offer home staging services.
In addition to staging, 95 percent of agents recommend decluttering the home, 89 percent recommend an entire home cleaning and 83 percent recommend removing pets from the home during showings. Other pre-sale projects include carpet cleaning, depersonalizing the home and making minor repairs.
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ORLANDO, Fla. – Millennials are the largest buying force in the housing industry, according to the recent 2019 “Home Buyers and Sellers Generational Report,” released by the National Association of Realtors® (NAR).
This generation of buyers, between the ages of 21 and 38, account for 37 percent of all home purchases, the report found.
Older millennials – those ages 29 to 38 – make up the largest share of married buyers, at 69 percent, and are the most likely to have children under the age of 18 living at home, at 58 percent. Their top motivating factors for buying include the desire to own their own home (42 percent), the desire for a larger home (15 percent), relocation for a job (9 percent), a change in familial status (7 percent), and the desire for a home in a better location (6 percent).
Older millennials have a median household income of $101,200, according to NAR’s report, and purchase homes with a median price of $274,000. That’s comparable to Gen Xers, who have a median income of $111,100 and purchase homes with a median price of $277,800, and younger baby boomers ($102,300 and $251,100, respectively).
Millennials are the generation most likely to make compromises on their home purchases, the report found. They also plan to stay in their homes for 10 years – a shorter time than Gen Xers, who plan to stay 16 or more years.
Millennials also rely on real estate professionals when completing a home purchase, with younger millennials between the ages of 21 and 28 being more likely than any other age group (87 percent) to use an agent’s services.
Some of the top benefits that millennials said real estate agents provide are:
- Help to understand the process (72 percent)
- Point out unnoticed features/faults with property (58 percent)
- Negotiate better sales contract terms (49 percent)
- Provide a better list of service providers, such as home inspectors (49 percent)
- Improve buyer’s knowledge of search areas (41 percent)
- Negotiate a better price (35 percent)
The report found that millennials place high value on communication with their real estate agents. They value agents who personally inform them of all activities; send updates as soon as a property is listed, price changes and a warning if one goes under contract. They also like communication via text message or email, providing they address their specific needs.
Among features on agents’ websites, millennials found these to be most important: photos, detailed listing information, floor plans, information on recently sold properties and virtual tours. They found videos (23 percent) and real estate news or articles (8 percent) the least helpful, according to the report.
Additional millennial highlights from NAR’s report
- Commutes are a major factor in millennial real estate decisions. Commuting costs were one of the top factors weighed when choosing which home to buy.
- They often have financial help. Buyers aged 38 and younger are the most likely to receive a gift from relatives or friends to help with their downpayment to purchase a home.
- One in five younger millennial buyers is unmarried, and the share of single first-time buyers is growing.
- They’re fleeing the nest. Thirty percent of younger millennials lived with their parents prior to buying their own home.
- They’re searching for affordability. One in five younger millennials purchased a home in rural areas, and 13 percent in small towns. Those figures are the same for younger baby boomers.
- They want to stay close to family. Younger millennials – just like baby boomers and those from the silent generation – are the most likely to say they want to be near friends or family when they buy a home.
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ORLANDO, Fla. — Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2018, with 19 percent of all foreign buyers who bought residential property in the United States. Florida Realtors® latest report, the 2018 Profile of International Residential Real Estate in Florida, finds that international sales accounted for $22.9 billion this year, down slightly (5 percent) from $24.2 billion in 2017.Read More »
ORLANDO, Fla. – Want to update your home or business property and give it a new look? For value and satisfaction, think about doing an outdoor remodeling project, according to the National Association of Realtors®’ (NAR) and National Association of Landscape Professionals’(NALP) 2018 Remodeling Impact Report: Outdoor Features.
The report looks at 13 outdoor residential projects and 10 commercial property projects, highlighting the reasons why property owners complete these projects, the value – both financial and emotional – that these remodels bring, and the increased happiness the finished projects bring homeowners.
When asked which outdoor projects produce the most substantial financial payouts at resale, Realtors ranked standard lawn care service at the top, which recovers 267 percent of the project cost at resale. Next, Realtors named landscape maintenance and tree care, both recovering 100 percent of the cost at resale, and installing an irrigation system, recouping 86 percent.
When it comes to the enjoyment homeowners gain from these projects, a fire feature and irrigation system tied for first, both receiving a perfect Joy Score of 10. Joy Scores range between 1 and 10: Higher figures indicate greater joy from the project.
Eighty-three percent of homeowners who installed a fire feature said they have a greater desire to be home since completing the project, and 69 percent of homeowners who installed an irrigation system said they feel a major sense of accomplishment when they think of the project. The next most appealing projects were a new wood deck (Joy Score of 9.8), a water feature (9.8), statement landscaping (9.7) and an overall landscape upgrade (9.6).
This year, the report also covered outdoor projects for commercial properties. The report found that 43 percent of Realtors have suggested a commercial client improve the curb appeal of a property before listing it for sale. The most frequently recommended projects are standard lawn care (39 percent), completing a landscape management service (27 percent) and an overall landscape upgrade (26 percent).
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ORLANDO, Fla. – Buying a home, packing and moving into it is already hard enough. When there are children involved, too, it adds a different set of requirements and stresses, according to the 2018 Moving with Kids report from the National Association of Realtors® (NAR).
For families, moving with children often means a lot of planning and research. Finding a home with the appropriate amount of space, in your preferred school district, and convenient to a job or school location are often priorities for buyers with families.
Using information from NAR’s 2018 Profile of Home Buyers and Sellers, the report explores the unique needs of homebuyers and sellers with children under age 18.
“For about 50 percent of all buyers, finding the right property in the right location was the most difficult step in the home search process,” noted Eric Sain, Florida Realtors® 2018 president-elect and 2019 president. “Families realize that having a Realtor with local market expertise and a broad range of resources to guide them through the process makes it a lot easier to find the right place to call home. In fact, the study found that 87 percent of all buyers purchased a home through the help of a real estate professional.”
- The average buyer with children under 18 purchases a 2,100-square-foot home with 4 bedrooms and 2 bathrooms, while the average buyer with no children chooses a 1,750-square-foot home with 3 bedrooms and 2 bathrooms. Both groups prefer a single-family, detached house.
- Unsurprisingly, schools play a critical factor in the purchasing decisions of buyers with children: 50 percent with children say the quality of a neighborhood’s school district is important compared to 11 percent of buyers without children. Convenience and proximity to schools is also a crucial consideration with 45 percent saying it’s an important factor compared to just six percent of buyers without children.
- 27 percent of buyers with children said childcare expenses delayed the process of buying a home. Those expenses also had an impact on the buying process, forcing buyers with children to make compromises on the house they purchased: 30 percent compromised on the size of their home, 29 percent on the price and 22 percent on the condition.
- Buyers with and without children – 87 percent each – relied equally on the help of a real estate agent during the buying process.
- When it comes to selling a home, 24 percent of those with children chose to sell because their house was too small. Only 8 percent of people without children at home sold their house for the same reason.
- When sellers were asked what they want most from their agent, 22 percent of those with children said they wanted their agent to sell their home within a specific timeframe compared to 20 percent of sellers without children. However, sellers both with and without children expect their agents to provide a broad range of services and manage most aspects of their home sale, 80 and 79 percent respectively.
- For sellers with children, urgent is the word that most often describes their selling situation: 26 percent of sellers with children qualified their need to sell as ‘very urgent’ compared to only 14 percent of sellers without children.
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ORLANDO, Fla. – Generation Z is optimistic when it comes to real estate investments and is showing a lot of interest in homeownership despite a young age, according to a new report by PropertyShark.com, a real estate website.
Generation Z includes those who were born after 1995, with the oldest members of the group being 23 years old. The survey polled more than 2,000 renters, owners and adults living with families.
Eighty-three percent of Gen Z respondents said they plan to buy a home within the next five years – and they’re not letting their youth stand in the way. About 100,000 Gen Zers are reportedly already homeowners, the survey found, and they’re less likely to default on their mortgage than baby boomers, millennials or Gen X mortgage holders.
While those in Gen Z are much more optimistic about homeownership than their older peers, the millennials, they do have one thing in common. Both generations agree that “college debt” is the biggest obstacle that could delay them from becoming homeowners.
As real estate buyers, they could be easy to work with: They dream of plenty of space and amenities, but they say they’re ready to compromise on almost anything to keep their costs to a minimum, the study finds. They show a fondness for suburbs (60 percent), followed by urban living (30 percent).
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ORLANDO, Fla. – More newly-built homes are featuring smart-home technology because builders are realizing more buyers want it and are willing to pay the extra costs.
Recent research from John Burns Real Estate Consulting found that more than 60 percent of new-home buyers say they’d pay more for an exterior security camera and smart locks. Sixty percent of buyers also would spend more on a home with a smart thermostat, the survey revealed.
According to a separate John Burns Real Estate Consulting survey of more than 300 home builders, 53 percent say they now incorporate smart-home technology into new construction. Even so, 42 percent of buyers say they would purchase additional smart-home technology.
Buyer segments differed on which smart-home tech they liked the most, according to the survey:
- Young singles and couples: most likely to choose smart thermostats
- Families: most likely to choose a smart garage responsive to app controls and voice commands
- Older buyers: most likely to pay extra for smart locks
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ORLANDO, Fla. – More home buyers are asking their Realtors about green and sustainable home features, according to the Realtors and Sustainability 2018 report from the National Association of Realtors® (NAR).
The report surveyed Realtors about sustainability issues in the residential and commercial real estate markets and the consumer preferences they’re seeing in their communities. Many clients tell their Realtors that environmentally friendly neighborhoods and home features are important to them when it comes to deciding where and what home to buy.
- 71 percent of agents and brokers reported that promoting energy efficiency in listings is either somewhat or very valuable.
- When asked what they consider to be the top market issues regarding sustainability, agents and brokers listed understanding lending options for energy upgrades or solar panels (36 percent), improving the energy efficiency of existing housing stock (34 percent) and the lack of information and materials provided to real estate professionals (30 percent).
- 39 percent of Realtors said they’re comfortable or extremely comfortable answering questions about home performance and efficiency.
- 40 percent of respondents say they’re confident or extremely confident in their ability to connect clients with green lenders.
- 40 percent reported that their Multiple Listing Service (MLS) has green data fields, compared to only 15 percent that do not. Among those that do have green data fields, 37 percent of respondents use them to promote green features, 27 percent to promote energy information and 16 percent to promote green certifications.
- 80 percent said that solar panels are available in their market, and 39 percent said that solar panels increased the perceived property value.
- 23 percent of brokers indicated that tiny homes – 600 square feet or less – are available in their market.
- Transportation and commuting features very or somewhat important to clients: Easy access to highways (82 percent), short commute times and distance to work (81 percent) and walkability (51 percent).
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