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Depending upon which day of week you list a house for sale, you may have better luck in selling it, suggests a new study.
You only have one chance to make a first impression with your listing, and it’s best to do that on Friday, the study notes. Homes listed on Friday are 12 percent more likely to sell within 90 days, and these Friday-listed homes also are likely to be toured more by potential buyers, according to the study by Redfin, which analyzed sales data of more than 1 million listings over nearly a 2-year timespan to determine if a certain day of week tended to generate higher sales.
So what’s so special about Friday? According to Redfin, buyers tend to tour homes on the weekends and, therefore, homes listed on Fridays tend to be the most top-of-mind when they’re plotting out their weekend.
“It also seems likely that many home buyers sort their weekend ‘must see’ lists by date listed, going to see the freshest homes first so they have the best chance of getting in on a potential good deal before other buyers,” the Redfin blog suggests.
Redfin also found in its study:
- Homes listed on Sunday were found to get slightly more online views.
- Homes listed on Friday get toured 19 percent more than homes listed on other days of the week.
- Homes listed on Friday or Thursday tend to sell for slightly closer to the original list price.
It’s a highly competitive market for home sellers right now. More homes to compete with means that the impression your homes makes – from the curb, and on the inside – matter now more than ever. You can increase your chances of selling faster – and at today’s top dollar – by investing in a select few home improvement projects that have been shown to make a big impact on buyers.
Bad news alert: it might cost you a little time, effort and cash. The good news, though, is that the best projects for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract buyers, and to attract dollars from those buyers.
1. Painting: Adding a fresh coat of paint to ceilings and walls is a tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have an easier time envisioning how they will infuse their own personalities into your home if they’re looking at a relatively blank slate.
Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.
Fresh exterior paint – even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims – is also a quick, inexpensive way to polish the look of your home from the curb.
2. Landscaping: Everything you’ve heard about curb appeal is true. First impressions matter – especially if your house is one of eight or nine a buyer has seen in one day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the biggest impact – and be diligent about keeping your landscaping very well-manicured throughout the time your home is on the market.
Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want to take on. Think clean, simple and elegant for the biggest boost in value.
3. Cleaning and de-cluttering: Start by removing all your family photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and counters. Buyers want to be able to envision their lives in the house, not yours. Personal items – and the visual clutter they create – have been shown time and time again to block buyers’ ability to create this vision.
Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail and other items.
And then clean – and keep cleaning obsessively, the entire time your place is on the market. Kitchens, bathrooms and bedrooms should look unlived in when they are shown. And don’t forget to clean less obvious places like windows, walls, doors and and floors, to dust off shelves and furniture, and to polish appliances.
4. Plumbing repairs and water stain/damage repair: Paying a plumber to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely provoke disgust and exasperation on the part of the buyers you want and need to impress. And they can be pretty cost effective to fix – ask your agent for a referral, if you need one.
5. Staging: Staging your home can make a dramatic difference in the price for which your home sells. Good staging is equal parts:
(a) removing your personal belongings and replacing it with more artwork, decor and cleaner-looking furniture,
(b) and tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light.
When done well, staging can convert your home from just another listing on a buyer’s list to the setting for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to a buyer), to items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story of the life buyers can fantasize about living in your home.
Talk to your agent about staging – some agents have the skill to do this on their own, while others might have a professional stager they frequently work with.
In some cases, you might want to take on even larger projects. Before you go that route, talk with a local real estate agent; they are well-positioned to know what sort of updates and features will make the most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant difference in the price it commands, so take advantage of your agent’s expertise as you make decisions about whichproperty preparation investments to make (and which to forego).
RISMEDIA, February 17, 2011—In a landmark study examining the home buying and selling preferences of consumers in the Mid-Atlantic region, 95% reported that working with a real estate professional is just as important, if not more important, than it was just a few years ago. The survey results were released in a new research paper entitled Keepin’ it Real, by MRIS, the area’s Multiple Listing Service (MLS) and a leading developer of real estate information technology. According to the report, which can be found on www.MRIS.com, today’s consumers recognize this is not the time to complete a real estate transaction on their own, and are placing a stronger emphasis on the agent’s professional skills. As such, trustworthiness was ranked as the most critical factor in choosing an agent, followed by experience, willingness to look out for a client’s interest, expertise in negotiating contracts, responsiveness, familiarity with contracts and knowledge of the local community. These requirements are evidence that consumers are seeking more than simple guidance, they are looking for an expert they can trust to execute a step-by-step process throughout the entire transaction. “In today’s housing market especially, this is no time to go it alone,” noted John L. Heithaus, Chief Marketing Officer of MRIS. “With 95% of all buyers and sellers reporting that working with a professional real estate agent or broker is important, it is evident that consumers understand how vital they are to the process. A real estate professional has the industry knowledge, networking ability and expert guidance on home buying and selling to deliver top notch customer service and advice, and provide a successful experience for consumers.” Additionally, the Keepin’ it Real report reveals that 68% of buyers and sellers rated their agent with a six or seven, on a 7-point satisfaction scale. This high level of consumer confidence reinforces the credibility of the real estate professionals in the Mid-Atlantic area. Nearly half of the consumers surveyed, or 48%, found their agent by way of referral. Moreover, 80% of consumers stated that they would recommend their agent to a friend or family member, especially those that purchased or sold a home in the past twelve months. Whereas in years past, the agent was the first step in the home buying or selling process, today, Internet-savvy consumers can gather information and educate themselves, long before contacting an agent. The Internet empowers consumers to search for homes and neighborhood information, compare pricing and explore financing options on their own. Yet, despite all of the tools and resources available, when it comes time to actually buy or sell a home, there is nothing more valuable than the industry knowledge, expertise and guidance a real estate professional brings to the table.
Here is a brief summary of this year’s GSMLS sales data for our market area, which comprises the Chesters, Mendhams and Long Hill Township of Morris County, and Basking Ridge, Bernardsville, Bedminster, Far Hills, Peapack Gladstone, Warren and Watchung of Somerset County.
In an earlier post I referred to a very large markdown from a very high starting price for Leonia Helmsley’s Greenwich CT estate. The very large markdown resulted in a much lower sale price, but one that certainly was still “very large”, at least by my humble standards.
Originally listed for $125 million in early 2008, the property finally sold at $35 million. At that sale price the 40-acre, 23,000-square-foot Dunnellen Hall estate is a $90 million let-down, a 72% reduction over 2 years from the original listing price. Harsh.
But that’s probably not your problem, at least not in the same scale. Still, what should you do when your listing doesn’t sell? How much of a markdown will get you offers and the most money for the sale of your home?
I’ll start by stating your mileage can and probably will vary, but there are a few recommendations to make.
1. A Nice Entryway
Impress buyers right off the bat with a beautiful entrance. I always recommend sellers put a fresh coat of paint on the front door. And if you don’t have an entrance at all, make one. This problem, more common in condos and apartments, is solved by cleverly placing furniture to create more of an entryway. A console table or demilune chest of drawers with something over it creates a welcoming vignette.
2. Hardwood Floors
Realtors agree that most buyers are hunting for hardwood. You can bet that, of all types of flooring, hardwood floors will have the most longevity and will never go out of style..
A synthetic wood floor, like Pergo is always a good option for those who can’t afford hardwood . But know that a laminate floor won’t fool everyone – it has a hollow thud when you walk on it and it doesn’t look the same but it does show crisp and clean and today’s buyer is looking for “move-in-ready”.
3. Fabulous Fixtures
Fixtures says designer Linda Applewhite, “are the jewelry of the house.” Only the extremely detail-oriented among us will stop to inspect doorknobs, faucets and cabinet knobs, but designers and real estate agents argue that we’ll prefer the look of a place that has coordinated fixtures that are a cut above standard developer grade.
Replacing knobs and drawer pulls is the quickest way to make over a bathroom or kitchen. And when it comes to faucets, for $60 or $70 dollars you can buy something infinitely better than what you likely already have.
4. Beautiful Baths
According to real estate agents, marble counters, whirlpool baths and steam showers up the attractiveness of any bathroom. But if you don’t have these luxury items, it may be more practical to address the unattractive aspects of your existing bath.
Rip out that big sheet mirror and those globe lights that look like you’re in a theater dressing room. Replace them with an elegant framed mirror (don’t be afraid to look outside the bathroom section) and sconce lighting on either side.
This lighting scheme is also more flattering to the face and making buyers feel pretty will pay off!
5. Countertop Considerations
You’ve probably heard that granite is the secret to a contemporary kitchen, but that’s not necessarily what buyers are after. It’s really about the slab. Buyers don’t want to see grout lines on their counters. So, when it comes to slab countertops, granite is the top pick because it’s hard, nonporous and easy to care for. But then again, so is Corian; so are composite stone surfaces such as Silestone and, she notes, with the help of today’s sophisticated sealants, so are concrete, limestone, soapstone and marble.
Even butcher-block, which is much less expensive than stone, can be a more appealing alternative to tile or laminate countertops. When it gets funky, you can sand it and oil it and it looks good agains.
Already have granite? Make it cutting edge. A lot of people are honing their granite now….. What that does is knock it down and make it more matte, so it looks warmer and more inviting. Shiny surfaces can look very cold.
6. Steel This Idea
Why do buyers go bananas for stainless-steel appliances? It’s the power of suggestion. A kitchen with stainless appliances looks like a commercial kitchen. It makes people think that they’re great cooks, but because the finish shows fingerprints, it’s not for everyone.
As far as other alternatives go, the designers agree that in general, black fixtures can look dated, while white is okay for a country kitchen. And some people are making appliances blend in beautifully by ordering front panels to match their cabinetry.
7. Pre-Organized Closets
Just as stainless appliances convince buyers that they are better cooks, closet organizers make buyers believe that they are better homemakers. If your closets are unadorned, don’t underestimate the importance of this easy addition.
They make you feel secure and calm and people need that. And while you don’t need to use high-end organizers, make sure that the materials are up-to-date. Twenty years ago, closet organizers meant wire shelves. You can’t slide anything over a wire shelf. You can’t even put a hanger in some of them. Today’s ideal would be melamine shelves, in bone or white, with some drawers and metal rods to maximize storage.
This organization shouldn’t stop in the closet – make sure your kitchen cabinets are orderly, too. If they open up a door and see a big pantry, but it’s not organized properly, it won’t be as exciting as something already organized with a place for everything.
8. Light Up
Floor lamps just don’t cut it these days. If your home doesn’t get a lot of natural light, consider installing recessed lighting or new sconces, or both, so the buyer won’t struggle to figure out how to brighten up the space.
Lighting is probably the most overlooked, yet the most important aspect of interior decoration……In newer construction, you don’t have sufficient lighting. The reality is that everyone needs three types – task, ambient and decorative lighting – which allow you to change the mood of the room.
When it comes to recessed lighting, know that the smaller the fixture, the more updated it is. We used to have six-inch apertures, now we have four-inch openings. And using halogen bulbs gives a cleaner, more modern look.
9. Built-In Bonus
Many buyers view built-ins as “free furniture.” Well-crafted bookshelves, china cabinets and entertainment units can “make a home stand out as quality.”
On the other hand it can be a catch-22 because some people would rather organize their own furniture. Sometimes it’s better to have freestanding pieces that look like built-ins, that you can give the buyer the option to purchase.
10. Grass Is Greener
Are the homebuyers in your area families with young children? If so, they’ll be drawn to spaces with a flat, open lawn.
Were you thinking of putting in a concrete patio or rock garden? Don’t bother if you’re putting your home on the market. A flat yard is a real plus. Spend some money and put in the grass. It’s a good seller; green is good.
Bonus Tip: Furnish That house!
Think you’re ready for the open house? Consider this: Architecturally interesting homes in immaculate shape can be shown empty.
But, in general, “people look for a homey kind of a feel” . And that’s homey, not homely. If the bulk of your furniture isn’t attractive, don’t hesitate to have it staged (propped with attractive rental furniture). We’re even seeing that done in the inexpensive condo market and it makes a huge difference to your bottom line…. The way you list your home is very different than the way you live!
The late Leona Helmsley’s 40-acre estate in Greenwich, Connecticut was originally listed for $125 million. It closed this week for $35 million. (She was the one who was quoted as saying, “only the little people pay taxes.”)
$90 million is some discount – it may be the biggest ever. Some distinction.
Details here: Leona Sells Her House
More than four years after the housing market peaked, many of the nation’s wealthiest homeowners are slashing prices in earnest. The asking price on the late Brooke Astor’s Park Avenue duplex has plummeted to $24.9 million from $46 million. Thursday Peter Sperling, son of the University of Phoenix founder John Sperling, dropped the price on his San Francisco limestone mansion to $47 million; he had been asking $65 million since 2006.
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| $125 million Fleur de Lys near Beverly Hills |
Then there are the ultimate holdouts: a rarefied slice of extremely wealthy sellers who are holding the line on today’s deal-making, price-slashing mentality. Even as their properties have lingered on the market, these sellers haven’t budged on initial asking prices, some of which were set in the waning days of the housing bubble.
Suzanne Saperstein, ex-wife of Metro Networks founder David Saperstein, is still asking $125 million for “Fleur de Lys,” a 41,000-square-foot, French chateau-inspired mansion near Beverly Hills with gold-embossed leather wall coverings and a ballroom. The listing has been on the market since at least April 2007, a month when the Dow passed 13,000. Mr. Saperstein has an equestrian estate that’s been asking $75 million since at least August 2007.
Also sitting on the market is the 600-acre Carmel Valley, Calif., ranch owned by Jim Kirk, who founded rental equipment company NationsRent, which sold for $600 million in 2006. Purchased for about $10 million after a five-year search, the property-with a four-bedroom main house, hiking trails and other structures-has been listed at $33 million since November 2006.
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| Jim Kirk’s $33 million 6,500 acre ranch |
With housing prices off about 28% from their peak in 2006 according to Standard & Poor’s Case-Shiller Index, some real estate agents say waiting is a risky strategy. “Everyone, from bottom to top, got hurt in the financial panic, and it’s reflected in the high-end of the housing market being frozen,” says Mark Zandi, chief economist of Moody’s Analytics. He adds that price declines, originally confined to the bottom of the market, have begun migrating upward.
“We’ve never been in a more price-sensitive market,” says Janet Owen of Sudler Sotheby’s International Realty, who recently got the listing for the Chicago mansion of J.P. Morgan’s Jamie Dimon. Originally listed for $13.5 million in 2007, the home as of August was listed at $6.95 million. It went into contract in late September. “The smart sellers respond to the market,” Ms. Owen says.
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| Tucker Frederickson’s $50 million Florida ranch |
Some holdouts and their brokers defend their prices, arguing that their estates would be difficult, if not impossible, to replicate today. “I feel the property is worth every penny-and probably then some,” says Tommy Hilfiger co-founder Joel Horowitz, who has been asking $100 million for his 210-acre estate in Zephyr Cove, Nev., since July 2006, when the National Association of Realtors’ then-Chief Economist David Lereah said that housing appeared to be headed for a soft landing in most markets.
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| Hana Ranch near Maui, Hawaii |
Mr. Horowitz notes that he and his wife Ann spent a year designing the home and three years building it and bought items for the home on their travels before it was even built-including lighting fixtures, fireplace mantels and 400-year-old flooring from French châteaux.
Others point to recent mega-deals, saying it’s simply a matter of finding that one right buyer. London developers Nick and Christian Candy in September reportedly sold their Monaco penthouse for nearly £200 million (about $314.3 million), believed to be one of the most expensive residential real-estate deals in the world. Since buyers can be expected to come in with lowball offers, cutting the asking price would be akin to negotiating with yourself, says former New York Giants running back Tucker Frederickson who, with a partner, has been asking for $50 million for a 5,000-acre cattle-and-shooting ranch in Florida since 2008.
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| Candy Spelling’s $150 million home. |
While many home sellers can be slow to adjust to the market, the very wealthy can be the slowest of all. “That stratum of the population is not impervious to what’s happening in the market, but they operate by their own set of dynamics,” says Sam Khater,
Still, it’s a rule of thumb that the longer a listing lingers, the less desirable it often seems to buyers. For some of these holdouts, brokers have masked length of time “on market” by avoiding officially listing them or yanking them on and off multiple-listing services. Instead, properties are marketed on brokers’ own Web sites, by word of mouth or through targeted mailings. Candy Spelling’s “The Manor” in Los Angeles officially hit the market in March 2009, for example, but was shown in 2008.
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| Joel Horowitz’ $100 million ‘Tranquility’ Estate |
Drew Mandile of Sotheby’s International Realty, who represents Mr. Saperstein’s equestrian estate, says he and his colleague “go dumb” any time a prospective buyer asks how long the property has been for sale. A response could invite fruitless inquires about how low a buyer could bid. “Do you think a seller has ever told a broker how much he would ever take?”
Fall is here and everything is changing once again. The leaves are falling and the air brisk. It’s getting dark sooner and you feel like thinks are slowing down. Despite all the changes, your home can still keep its charm and appeal for fall buyers. First you’ve got to cover some basics to keep safe and smart.
Here are few things you might want to consider:
Exterior: Check your foundation walls for cracks, heaving and crumbling.
Heating & Cooling: Oil burning equipment & heat pumps should be checked annually. Gas burning equipment can be serviced every other year.
Interiors: Check your roof for any signs of water stains, leaks, dampness and/or condensation.
Plumbing: Have your septic tank professionally drained and cleaned every two years.
Doors & Windows: Check for insulation on your doors & windows
Exterior: Clean gutters and make sure your downspouts direct water away from the foundation.
Roof: Check your vents and chimneys for squirrels, birds nest, or insects.
http://www.trulia.com/blog/esolutionsrealty/2010/03/preparing_your_home_for_fall_buyers
More developers favor ‘smart growth’ in cities, not suburban sprawl
ROCKVILLE, Md. — This suburb of Washington, D.C., inspired R.E.M.’s 1984 song about the soul-sucking blandness of a suburban adolescence that has been a staple of rock and roll. “(Don’t Go Back to) Rockville” described a town of empty houses, “where nobody says hello.”
But some experts in the real estate business believe that in the future, more and more of us will be going back to places like the revamped Rockville — quite happily, in fact.
“They had a point at the time,” Sally Sternbach, the head of Rockville’s economic development arm, says of R.E.M.’s quiet anthem. “We got it wrong. We built a mall that never found its anchors. It languished for 40 years. It was like the biblical 40 years in the desert.”
Then, 15 years ago, Rockville convened hearings and forums to discuss its lackluster downtown, deciding in the end to replace it with a town square lined with shops, restaurants and apartments, all steps away from a subway station — in other words, more of an urban experience.
The citizenry wanted vibrant street life both for the fun of it, and to attract business. So far, it’s worked. Teenagers use Facebook to signal spur-of-the-moment breakdance sessions on the town square’s bandstand because, as Dominique Estrera, 17, explained, it’s really the only place they can “hang out and break.”
Adults like to socialize there, too. “I love the Town Square because I can’t walk more than a couple feet without seeing someone I know from doing business,” said Robin Wiener, president of Get Real Consulting, a firm that helps healthcare providers put their records online.
Rockville’s renaissance over the past four years shows how the shift toward urban-style living has reached the suburbs. And urban planners insist the trend has legs.
Dubbed “smart growth,” the movement favors the development of a mix of housing and businesses in and near existing cities. At the same time, it discourages the Topsy-like growth of peripheral suburbs, known disparagingly as “sprawl.”
The unexpected revival of a number of cities, from Rockville to Sacramento, stands in contrast to plunging home prices in the suburbs. “America is catching on to this trend,” said Peter Calthorpe, who co-founded the Congress for the New Urbanism in 1993 to create alternatives to the conventional suburb.
He says the previous model was based on the assumption that the United States could prop up the single-family home in a distant location by keeping the cost of oil and mortgages low. But that era is over. “The true cost of transportation and housing is going to start to surface,” he warns.
Living for the city
If the trend persists, as many expect, it would be a sharp rejection of the preferences and policies that have shaped U.S. housing since World War II.
The suburb as we know it today — open, low-slung, car-dependent — was born with the post-war baby boom. All of a sudden, there was a desperate need for housing. By 1950, single-family housing starts had soared from around 286,000 a year in 1945 to 1.6 million, according to Census Bureau data. And as the car became more widely available, and roads spread, so did the suburbs.
During the most recent housing boom, homebuilders started 6.3 million detached single-family homes between 2003 and 2006. By 2007, single-family homes accounted for 63 percent of U.S. housing units.
The baby boomers whose arrival kicked off the postwar housing frenzy fed this latest expansion, too. This time, they sought space for their own families, said James Chung, president of Reach Advisors near Albany, New York, whose clients include developers. “Suburban developers did a fantastic job riding that wave,” he said.
But today, aging boomers are growing out of the suburbs and their children have not yet grown into them — and may never do so to the extent their parents did. This demographic shift, more than anything else, is driving consumer demand for compact, walkable neighborhoods, Chung said.
Born between 1946 and 1964, baby boomers represent about a third of the U.S. adult population, and will do so through the next decade, said demographer Dowell Myers of the University of Southern California.
Boomers are eager to liberate themselves from the maintenance of house, lawn and car now that their children have skipped the nest, said Mollie Carmichael of John Burns Real Estate Consulting, an Irvine, California-based firm that advises homebuilders. They want necessities within walking distance because they know they will not be able to drive forever.
After a divorce, real estate agent Kim Merrell, 51, found her ideal community in Sacramento. It has a grocer and neighbors who go “porching” to drop in on each other and chat. A local lounge, Mix Downtown, caters to people like her by waiving cover charges for the 40 and older crowd until 10:30 p.m..
In Sacramento, the 55-74 age bracket will expand by 50 percent by 2020, according to the Sacramento Area Council of Governments, which created a plan to reduce congestion and expand housing choices to accommodate that growth. The group aged 35 to 54, which is when people tend to buy single family homes, will shrink slightly.
Of course, not everyone can afford urban life and its pleasures, especially during this period of fitful recovery from the worst recession in nearly eight decades. Building costs in the urban core are double that of the suburbs, said Mark Friedman, president of Fulcrum Property, a developer in Sacramento’s midtown.
Developers pass those costs onto buyers. Meanwhile, the housing bust has cut the cost of Sacramento region homes 46 percent from their peak, so suburbia is still a draw for many.
For others, it’s the only option, said Henry Cisneros, the former Secretary of Housing and Urban Development who now runs CityView, a developer of housing within the range of average families. “Cities need to understand that a great city needs a mix of housing. It creates dysfunction when workers are required to live at great distances,” he said.
But developers will make the most money building for those who can pay a kind of virtue premium, they say. The gas-sipping Toyota Prius set the precedent: people buy it despite a price tag that is at a minimum $3,000 more than a comparable conventional car.
“It’s looking for the prettiest buyer, a person who is going to pay more for their car because it is important enough to express their values about the environment,” Friedman said.
That lucrative market explains why he and others believe the potential reward in urban development is well worth the risk. “You have to be very careful not to wind up with an obsolete business model in rapidly changing times,” said Eneas Kane, chief executive of DMB Associates, an Arizona-based developer of upscale neighborhoods.
The firm is shifting its focus toward smart growth, including a 1,433-acre Silicon Valley-style industrial salt site with a variety of homes, open space and streetcars.
All politics is local
Until very recently, a real estate agent like Merrell might have been the last person to trade the suburbs for the city. After all, her profession had bought and sold the notion that homebuyers should stretch to invest in the biggest and most expensive they could afford because prices could only go up.
The housing crash changed all that. Size and value were decoupled as prices fell farthest fastest in the far-flung suburbs, said Stan Humphries, chief economist at real estate website Zillow.com.
Now citizens with real estate savvy are honing in on the cities. Unlike the suburbs, and despite the downturn, homes closer to downtowns tended to retain their value, according to a 2008 Zillow report which analyzed the change in value for 1.65 million homes between the first quarter of 2007 and the first quarter of 2008.
In 15 of 20 major housing markets, such as New York City but also Milwaukee, Wisconsin and Durham, North Carolina, higher home prices correlated with proximity to the city center and its restaurants, parks and libraries.
More specifically, walking distance to those amenities generates a home price premium in the range of $4,000 to $34,000, according to a 2009 study of 90,000 homes conducted by CEOs for Cities, an urban advocacy organization.
Americans are willing to invest in that lifestyle just as they were willing to pour money into their homes during the boom. Residents of communities like Sacramento and Rockville are ponying up for the urban privilege of public transportation in their own backyards.
“In one of the worst economies in a generation, people have actively chosen to raise their own taxes to support public transportation,” said Jason Jordan, the director of the Center for Transportation Excellence, which supports ballot initiatives that fund transportation.
In general, 35 percent of ballot initiatives pass. But in 2008 and 2009, 76 percent of ballot initiatives raising taxes to fund transportation did, Jordan said.
People are increasingly pushing for policy that supports an urban lifestyle, and leaders from the White House to town halls are listening, said Alexander von Hoffman of Harvard University’s Joint Center for Housing Studies.
This year, President Barack Obama created the Office of Sustainable Housing and Communities to coordinate federal housing and transportation funding with local development. He designated $2.1 billion in grant money for projects like streetcars in Tucson, Arizona and bike trails in Philadelphia. And the House of Representative’s version of the Surface Transportation Act would nearly double funding for public transportation.
The president “is helping to coordinate and reinforce a movement that was already gaining momentum. He’s helping those local and state leaders,” von Hoffman said.
In California, for example, Governor Arnold Schwarzenegger signed Senate Bill 375 in 2008, requiring each region to adopt a “sustainable communities strategy” to reduce greenhouse gases and give transportation projects top priority for funding.
“It was the coalition of the impossible,” said Darrell Steinberg, president pro tempore of the California State Senate. “The builders, the local governments, the environmental community and the affordable housing advocates had been at odds for decades on these issues.”
Of course, some critics oppose government’s role in “engineering” neighborhoods in cities. During debate over the California bill, conservatives mocked government’s promotion of urban development. “Hasn’t everyone always longed to live in a dense, crime-ridden urban neighborhood, right next to the nearest railroad hub?” said one Internet ad, of Steinberg’s bill.
If anything signals smart growth’s newly mainstream status, it’s the embrace of Salt Lake City, Utah, said Christopher Leinberger, a developer and Brookings Institution fellow. “It’s a Republican state. It’s a Mormon state. It’s fallen in love with blueprint planning,” Leinberger said.
Two-thirds of the residents in the two-county region surrounding Salt Lake City voted to raise $2.5 billion for more miles of commuter and light rail track by hiking their sales tax, said Chamber of Commerce spokesman Marty Carpenter. “70 miles in 70 years!” is the rallying cry.
Salt Lake City itself will receive another $5 billion. A la Rockville, the Mormon Church is replacing two indoor malls with a walkable housing and retail complex.
Atlanta, Georgia; Boise, Idaho; Minneapolis, Minnesota and others have invited Salt Lake City officials to speak, said Natalie Gochnour, the chamber’s chief economist. “They want to know how in a conservative environment like Utah you pass ballot initiatives,” she said.
Utah got buy-in from business, Gochnour said. “It goes back to commute times, and the cost of doing business when you’re congested,” she said.
http://www.msnbc.msn.com/id/38535943/ns/business-real_estate/
