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Conventional wisdom, as it relates to houses, is often too much convention and not enough wisdom.
Every year, somebody publishes a list of which conventional home improvements will give you the best (or the worst) return on your remodeling investment.
Remodel a bathroom. Replace your siding. Don’t build a swimming pool. Paint everything neutral colors.
Sit up straight. Get a haircut. Call your mother.
If return on investment (ROI) is why you bought a home, or why you’re remodeling one, you can stop reading now. Because the rest of this article isn’t for you.
Three, two, one … still here?
You invest in your home to improve livability first, not value. If you get more value in the process, consider it a bonus, but don’t make ROI your prime directive.
Otherwise, you’ll end up like the potential client who came into my office a few years ago with a three-page, single-spaced typewritten (as in made with a “typewriter”) list of things he wanted in his house.
His list included this line: “A large dining room, near the kitchen. Although we don’t need or want a dining room.” Why would he want to build a room he didn’t need?
Because he’s thinking of things to make the house valuable, instead of things to make it livable.
So let me rephrase the remodeling-ROI question this way: What are some cost-effective ways to improve the livability of your house?
Here’s my short list:
1. Walk-in pantry instead of kitchen cabinets
Kitchen cabinets are expensive. Half of them are up high on the wall where they’re hard to reach, and the wall space they take up could be better used for windows. A pantry takes up less space, stores a lot more, is much easier to use, and costs less to build.
2. Comfortable shower instead of big bathtub
My firm does a lot of work in late-’70s/early-’80s neighborhoods that are loaded with huge tubs. We’re taking them all out, one at a time, and replacing them with comfortably sized showers (not the racquetball court-sized ones you see in home shows) that people actually use every day.
A shower takes up less space, uses less hot water, and is far more sanitary than a big tub.
3. Group windows together facing best views instead of scattering them around the house
Got a great view somewhere? Bring it into the house with lots of glass. Take excess windows from bedrooms and bathrooms and use them to connect the inside of the house with the outside.
We once remodeled a house on the coast of Lake Erie that had one window — one — facing the lake. Hey, pal, did you notice you have one of the Great Lakes in your backyard?
4. Keep ceiling heights reasonable for the room size
“Volume” ceilings do not automatically make better rooms. They just make taller rooms, rooms that are harder to decorate and more expensive to heat and cool.
Instead, focus attention on a view, a large fireplace or other element — and away from the ceiling height. Use wall trim and multiple paint colors to break up the volume of the room and create the illusion of height.
5. Spend more time planning, and less money building
I toured a client’s existing home before we began designing the new one. “Of course,” she said as we peeked in on the kids’ rooms, “These bedrooms are way too small.”
“Really?” I thought. The smallest was probably 14 feet by 15 feet. But each bedroom had at least one door or one window on each wall.
Pretty, but the design left little room for furniture.
I suggested we more carefully design the new bedrooms, keeping the furniture placement in mind. In the end, we were able to easily accommodate each child’s bedroom furniture comfortably in smaller bedrooms than what they’d had before.
6. Consider the simple elegance of the box-form house
Subtlety and restraint used to be virtues in home design. These days, far too often, inexperienced designers attempt to attract attention to their homes by adding more stuff: more gables, more materials, more bay windows, etc. Others know that proper proportion, scale and details are what turn heads.
The simple box-house is a classic American form that’s survived 150 years of stylistic changes. Greek Revival, American Four-Square, Tidewater Georgian … all simple boxes. Great proportions, great details … done.
And here’s a bonus: The box-form is easier and cheaper to build, and because it encloses a larger volume in less perimeter, it’s less expensive to heat, cool and maintain.
7. Share part of the master bath
This isn’t for everyone, but it really tightens up the budget and the floor plan. Make the toilet and a sink in the master bath accessible to the rest of the house, instead of building a separate half-bath — it won’t be used much by you during the day, and rarely by guests at night.
Why have two baths when one will do?
8. Spend it when you have it, not before
Sure, it’d be great to have those granite countertops now, but your budget’s tight and granite is 10 times the cost of laminate tops. So how about putting in nice laminate tops now, and replacing them with granite in five years when you have the cash? You can easily do the same with light fixtures, flooring, window treatment …
9. Compartmentalized bath — two baths in the space of 1 1/2 baths
Each kid doesn’t need a personal bathroom, but does need privacy and room to share. A compartmentalized bath puts two sinks in one room and the toilet and tub/shower in another, so three kids can use the bath at once and keep a little more harmony in the family home.
I doubt any of these ideas will ever make a magazine’s list of “Best Remodeling ROI” projects. But every one saves you money over a more “conventional” design strategy, and every one increases the livability of your home.
Economy Warming with the Weather
Though the risk of a spike in energy prices looms, there’s mounting evidence that this time, economic recovery is for real.
By John Maggs, Senior Economics Editor, The Kiplinger Letter
March 14, 2012
The economy has been heating up as much as the weather lately, but is it only another false spring?
We don’t think so. Unlike 2010 and 2011, when early economic gains withered on the vine, this year’s green shoots will bear fruit.
We’ll forgive you if you harbor some doubts. In 2010, after the worst and longest recession since the 1930s, the economy grew at nearly a 4% rate through June, and it looked as if a self-sustaining recovery had begun. But growth slowed sharply in the second half of the year, and businesses shelved expansion plans. Similarly, in the spring of 2011, strong job numbers made it seem as if the economy was back on track. In February, March and April, employers added more than 200,000 jobs in each month, the first time that had happened since 2006. Then employment gains plunged, and the economic growth hit the brakes. U.S. gross domestic product ended up an anemic 1.7% for the year.
This year, there’s more evidence of sustained recovery.
Consumers are starting to spend more. Cars and trucks are flying off dealer lots, at the fastest pace since before the recession. February’s sales, at an annualized rate of 15 million autos, will ease off in the coming months, but sales this year may be close to 14 million, up from less than 11 million in 2009 and 13 million last year.
Retail sales are also strong. After a solid holiday season, retailers report that sales are still growing, up 1.1% in February, normally a time when consumers are hanging around the house waiting for the thaw. Warm weather helped get them out to stores, and they did more than window shop. Overall retail sales in February were 6.3% higher than a year earlier. Sales were up even more at chain stores — 6.7%.
Unseasonable weather may not continue, but surging consumer confidence indicates that the acceleration in spending will. The Conference Board’s confidence index is up 30 points since October, to a reading of 70.1. That’s the largest increase over a four-month span in more than 30 years. Consumers are also signaling their confidence by borrowing more. Revolving debt — student and auto loans, credit cards, etc. — is rising.
Meanwhile, the benefits to employers of cost cutting are fading. Productivity — the output per worker — surged in the Great Recession and its immediate aftermath, as employers slashed payrolls to stay competitive. In 2010, productivity increased by 4%, above the long-run average of about 2% a year. But growth stopped cold in 2011, actually falling for part of the year and ending the year up a mere 0.4%.
Normally, low productivity growth is bad news because it holds down wages. But in an economy with 8 million people actively looking for work, it’s good news. We expect productivity gains to continue to languish in 2012, forcing businesses that want to expand to hire workers. That, in turn, should spur economic growth.
It’s also encouraging that job growth is becoming more consistent. Based on the lower level of new claims for unemployment insurance this month, it is likely that March will be another month of job gains north of 200,000. One of the most discouraging things about the recovery since the Great Recession has been the stop-and-start nature of economic growth and job creation. Though GDP gains in the first half of 2012 won’t be spectacular — an annual rate of only about 2% — more-consistent net job creation will reinforce consumer confidence.
There are even signs of improvement in housing, still the biggest drag on the economy. The inventory of unsold homes is dropping — at last count, to the equivalent of about six months of sales at the current pace of closings. The combination of mild weather, low mortgage interest rates and the prospect of those rates turning around once the economy picks up some steam is luring more traffic into open houses. At the same time, real estate brokers say sellers have gotten more realistic about sales prices, finally accepting that the bubble prices of a few years back are gone. Unfortunately, with millions of foreclosures still in the pipeline, the modest improvement we expect in housing prices by the end of the year won’t do much to nurture growth.
Finally, some clouds on the horizon look less threatening. Europe’s debt crisis will calm down, now that holders of Greek bonds have agreed to write off most of their investments. A repeat of last year’s fiscal brinkmanship in Washington isn’t likely. The posturing angered voters, and members of Congress won’t want to play chicken again before facing voters in November.
One major thundercloud remains: The prospect of a sharp spike in oil prices if Israel attacks Iran to thwart its pursuit of nuclear weapons. An attack would drive gasoline over $5 a gallon and raise the average cost of filling up for each U.S. household by $1,000 a year. Such a shock would lower the growth in U.S. GDP next year from around 2% to 1%, leaving the economy one adverse event away from a recession. Although the chances for an attack in the coming weeks are lower since Israel agreed to another round of diplomacy, the risk can’t be ignored.
http://www.kiplinger.com/columns/practical-economics/archives/economy-improving-2012.html
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
REThink Real Estate
By Tara-Nicholle Nelson, Thursday, March 8, 2012.
I’m a proponent of listing with an agent with as deep a local knowledge and relationship base as possible. With buying, things can be a little bit different — especially if you are relocating and looking at a wide range of areas.
Unless you’re house hunting in a super-specialized neighborhood or for a unique property type, like a Manhattan co-op, any buyer’s agent from the general area can get familiar with a neighborhood in that region pretty quickly if he or she is up to speed on the basics of doing deals in an area.
When it comes to selling, though, it’s quite a bit tougher, especially on today’s tough-to-sell market where pricing and marketing nuances (along with vendor, lender and inspector relationships, and contacts with buyer’s brokers and buyers themselves) are crucial to get homes sold.
Before we get into the details of what a local specialist has that another agent might not, though, I do want to say this: I don’t know your local market, but in many areas of the country even the most local, smartest, most aggressive, best-marketing listing agent might not be able to move a home in five months or less. Frankly, the best agent cannot move an overpriced or poorly prepared home.
And the fact is that nonlocal, specialist agents do provide sound advice on pricing, preparation, marketing and strategy to sellers every single day across the country. So, while a local-area specialist might have a leg up on another agent based on relationships and insider knowledge, that is no guarantee that he or she will be superior to the agent you have right now.
So, before you go through the upheaval of finding another agent, ask yourself:
- Do the challenges you have with your current agent actually have anything to do with her relative “outsider-dom”?
- Has your current agent given you any advice on getting your home sold that you have failed to follow (i.e., cut the price, clear the clutter, hire a stager, etc.)?
If you are not following your current agent’s advice, then you should think twice before firing her because your home hasn’t sold. Hiring another agent will not resolve your problem if your home is still overpriced or underprepared.
So, assuming you are willing to do everything within your power to price and prepare your home fairly, here are some of the considerations that tilt my general opinion in favor of a local listing agent vs. an agent from outside the area:
1. Local agents may have insider marketing knowledge. In certain neighborhoods in my town, for example, the standard practice is to:
- List a home midweek.
- Hold it open for brokers only on Thursday — and advertise those on agent-only fliers.
- Not allow it to be shown otherwise until the Sunday open house.
- Hold it open for two Sundays.
- Take offers the Tuesday or Wednesday following the second open house.
Agents from surrounding areas could probably guess at some but not all of these things, but often they don’t. And that lack of insider knowledge might actually prevent out-of-the-area agents from getting the fullest exposure for their listings.
For example, if you just took the first offer that came in, you might forgo the offer of a local buyer who was expecting to have two weekends to get to the place.
2. Local agents may have relationships outsiders don’t. They may know the other agents in town, and be able to market the property to them casually, as they run into them in the grocery store or at local meetings, in a way that (a) works and (b) an agent from outside the area cannot. They also will have the built-in marketing channel of being able to market to agents inside their own office — not to mention the buyers they represent.
Finally, local agents might know the inspectors, appraisers, even lenders (i.e., all the pros who have to work together to close a deal) and have a relationship of trust with them that a stranger does not.
And that includes being able to find contractors or other vendors who will do repair work at better prices or on better terms than they would offer to a stranger.
3. Local agents might have a leg up on pricing. Possibly the strongest argument for working with a local listing agent is that they know what local buyers want, care about and deprioritize. That means they understand local pricing nuances better, having worked with local buyers, and having viewed and/or sold recent homes nearby.
You don’t have to have been in the market long to understand that photos can be misleading and that location nuances weigh heavily on the prices that buyers are willing to pay, so the history of having actually been to and inside the comparable sold listings — rather than just having seen them online, can be critically important to understanding how comparable they are to your home, and how your home should be priced accordingly.
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| Humble materials get recycled to create outlandish homes, such as this dumpster house. Photo: Forbes |
Bedtime stories say the evil witch from Hansel and Gretel lived in a gingerbread cottage with window panes of sugar and a candy studded roof. And an old lady with so many children she didn’t know what to do lived in a shoe.
In real life, the possibilities are just as wacky, from paper houses to converted grain bins to homes made from a muddy mixture called “cob.” These architectural oddities — homes built out of recycled junk, gussied up dumpsters, or grounded airplanes — provide fodder for future fairy tales, or at least late-night shows on HGTV.
In the Hamptons, a resort area usually associated with oceanfront mega mansions, abandoned steel shipping containers are being used to construct a 2,000-square-foot beach house with a deck and a small pool. Andrew Anderson, the builder and owner of beachboxit.com, says turning the containers into a home will ultimately help the planet.
“It’s the opportunity to take these products and give them a second life,” Anderson says. “You weld them together and tack them onto the foundation.” With loads of glass and an exposed corrugated ceiling in the upper container and an exposed corrugated wall in a lower crate, the shipping container beach house will be listed this spring for close to $1.4 million.
Here are five houses made from the most unconventional materials:
Fancy Fuselage Where: All Over Made From: Old Airplanes
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| The vintage Boeing 727′s interior is adorned with teak paneling from cockpit to tail. Photo: Costa Verde |
Once they’ve made their last landings, Boeing 727s and Douglas DC-8s, don’t always get put out to pasture on the retirement tarmac. If not broken up for parts and scrap, the occasional airplane, wings clipped, gets transformed into a sealed, sturdily built fuselage-style private home. Corporate jets already outfitted with designer bedrooms, comfy leather sofas, media rooms and bars, may just need the seat belts removed.
Dumpster Home Where: Berkeley, California Made From: Dumpster
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| Extreme compromises include a toilet lid that doubles as a bed cushion. Photo: Forbes |
“A nice little home out of a garbage can.” That’s how artist Gregory Kloehn of Berkeley, CA describes, in a YouTube.com interview by Kim Aronson, the dumpster he made into a “luxury” compact home for urban living. The “elite waste” quarters boast stainless steel appliances, gas stove, hardwood floors, a toilet, storage and sleeping areas and a barbecue outside. At night its two front windows roll down into the elite dumpster for privacy.
Junk Castle Where: Pullman, Washington Made From: Car Parts, Sheet Metal, Car Windows
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| Building on a budget: this scrap-metal home cost less than $500 to build. Photo: Forbes |
Many folks have junk drawers. Victor Moore, an art teacher, had a junk house. Set on a hilltop with lookouts made from car windows and the glass from washing machine doors, the 1960s Junk Castle is filled with all sorts of, well, junk, from his workshop. The exterior walls are a mélange of old auto body parts, recycled sheet metal and household appliance parts.
Cob House Where: Rutledge, Missouri Made From: Sand, Clay, Straw
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| The 370-square-foot cottage took nine months to build. Photo: Forbes |
To build his snail-shaped “cob house,” Brian “Ziggy” Liliola used 219 batches of cob, a wet mixture of straw, clay and sand. He chose the rustic building material used on 500-year-old thatched cottages in England, because of “how creative you could be” and “the flexibility and low cost and sustainable benefit” of building with local materials.
Converted Silos And Grain Bins Where: The Midwest Made From: Converted Silos, Grain Bins
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| Two grain silos were combined to create a unique 1,800 square-foot home. Photo: Forbes |
Silos and grain bins aren’t just for missiles or soybeans anymore. Structurally sound, ready made with a roof, round walls and a concrete floor loaded with interior space, the often abandoned, recyclable steel structures are easily converted into homes that are fire and termite resistant, weather proof and energy efficient. For larger lodgings, they can be placed side-by-side or stacked on top of each other. Even Rapunzel might let down her hair in these multi-story circular dwellings. After all, it’s like living in a metal turret.
http://realestate.yahoo.com/promo/homes-made-from-wacky-materials.html
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| A water slide is a fun bedroom amenity but it might narrow your resale chances. Photo: Curbed |
The average person spends more than a third of their time on earth sleeping, so bedrooms tend to factor into real estate purchases more than, say, game rooms and media centers. Still, some homeowners find ways to personalize their private chambers in some out-of-this-world ways, for better or for worse.
These extreme bedrooms pop up when the houses head to market, but might be a hinderance if the buyers aren’t into velvet or chintz or Roman replicas.
Then again, if they offer a cool slide to a water wake up, they might help sell the place. Slip a closet door open in this British bedroom, commit to a trip down a dark tube, and, surprise!, find oneself in a stunning indoor swimming pool.
Yep, it’s that easy for the buyer of the $3.15M “most daring & innovative house ever built.” The subterranean mansion in Bowdon, Cheshire packs some James Bond wizardry into its master bedroom, but the craziest part of the design might be the absolute lack of windows.
Okay, so the jacuzzi atrium features a skylight, but without the morning sun, it’s a good thing the owner can splash more than a little water on their face in the AM.
Check out these crazy, surprising, extreme bedrooms:
Highlight: Neon Green Lights
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| Here’s one way to shine a light on your crown molding. Photo: Curbed |
In Russia, a luxury bedroom isn’t complete without some neon green lighting to illuminate the crown molding. At least that’s the impression we got from this master bedroom, part of an extravagant $24M offering outside of Moscow.
Highlight: Coral Mural
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| Bedroom themes can sometimes be a little too personal. Photo: Curbed |
When model Agyness Deyn did up her Brooklyn bedroom, she took things “under the sea” with a coral mural, seashell light fixtures, and a blue ceiling. Surprisingly, this might be the most sedate room in Deyn’s loft, currently listed for $2.5M, but in contract to sell.
Highlight: Faux Stone
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| Faux stone finishing has never really caught on. Photo: Curbed |
Faux stone finishing and black leather are the keys to failure in this truly Texas-sized bachelor pad of a bedroom. Part of a $9.8M “contemporary” mansion, this place missed the modern boat back in the early 1990s.
Highlight: Fancy Mirrors
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| Opulence isn’t always timeless. Photo: Curbed |
What to do as a young software millionaire? Deck out an L.A. mansion in a very dated, tacky form of luxury then try to cash in on the $6.5M resale. The trouble is, this opulent master bedroom is located in Woodland Hills, where comps are selling for a third the price per square foot. Location, location, location probably drove the owner to pull it from the market.
http://realestate.yahoo.com/promo/5-bedrooms-with-crazy-ideas.html
It’s a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.
A kitchen is the heart of a home. This is true all across the globe. The old saying that the “stomach is the way to the heart” carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It’s the room where we nourish our bodies and our spirits.
Kitchens are integral to entertaining and in today’s age of open floor plans, they’re a focal piece of many family rooms. It’s because of this that kitchens play such an important role in the buying and selling process.
This one room is the showpiece of the house. You’ll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It’s not just a new layer of paint.
Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren’t willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.
What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.
The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won’t find a buyer.
Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions’ kitchens look like.
Do area homes have new solid wood cabinets and granite counters in today’s designer colors? You’ll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?
Are you in a higher-end neighborhood? It’s time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don’t want to put in the time yourself to make upgrades then you’ll have to make concessions in the price.
Don’t become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.
The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.
http://realtytimes.com/rtpages/20120124_kitchens.htm#.TzEmen1saCx.facebook
Several recent indicators for the real estate industry are pointing to a market that is on the mend and entering recovery mode.
Housing experts’ predictions for the new year tend to center around a market stabilizing before entering a gradual, albeit very slow, recovery. However, the tone is more upbeat than it has been in years for the housing market.
Here are a few of the signs that are showing the market moving in a more positive direction:
Home sales: Existing home sales are expected to increase 12 percent this year, following a 2 percent jump last year, Moody’s Analytics predicts. The signs are already showing: In November, pending home sales — a gauge for future home buying — reached its highest level in 19 months, the National Association of REALTORS® reported. (Read more.)
New-home market: Coming off of what could be considered the worst year for new-home building ever recorded, the sector is expected to bounce back this year. New-home sales and starts were already showing a rebound in the last few months of 2011. Moody’s is predicting that single-family housing starts will increase 37 percent this year, and new-home sales will soar 74 percent.
Housing stocks: Investors are starting to get optimistic about the possibility of a rebound too, and are turning to home builder stocks. These equities have recently outperformed the broader stock market and the S&P 1500 homebuilding index has increased 38 percent since mid-October, USA Today reports.
Consumer confidence: With mortgage rates at record lows and housing affordability high, about 71 percent of Americans say now is a good time to purchase a home. Also, more Americans are optimistic that home prices will rise over the next year — about 26 percent say prices will rise in 2012, an increase of 4 percent over the last survey, according to Fannie Mae’s December National Housing Survey
