Daily Real Estate News | August 7, 2007

What Buyers Want: Top Home Preferences

More home buyers want extra garage space with two or more spaces in their homes, according to the “2007 Profile of Buyers’ Home Feature Preferences,” which was released Tuesday by the NATIONAL ASSOCIATION OF REALTORS®.

The number of buyers expressing a desire for oversized garages grew 16 percentage points since NAR's last survey of buyer preferences in 2004. About 57 percent of home buyers surveyed now say they want an oversized garage. What's more, among buyers who purchased homes without big garages, 56 percent said they would have paid more for an oversized garage, compared to only 6 percent in the 2004 survey.

NAR's latest home buyer preference survey, which reports responses from buyers who purchased homes in 2006, asks buyers about the importance of 75 home features and room types.

What They're Shopping For

Other priorities for today’s home buyers include:

• Air conditioning: three out of every four respondents surveyed ranked this as “very important.”
• Master bedroom walk-in closet: 53 percent of buyers rated this as an important feature in a home.
• Hardwood floors and granite countertops: each gained 7 percentage points in popularity since the 2004 survey; 28 percent and 23 percent, respectively, of buyers labeled these home features as very important.
• Cable/satellite TV-ready: 46 percent, a growth of 6 percentage points from the 2004 survey, said this was important.
• Energy efficiency: especially among new-home buyers — 65 percent of new-home buyers said energy efficiency home features are very important compared to 39 percent for buyers of existing homes.

Buyers also said they're willing to pay more for these extras. For example, 65 percent of buyers said they would be willing to pay a median $1,880 extra for a home with central air conditioning. One out of four buyers also was willing to pay a median of $4,760 more for waterfront property.

Regional Preferences

What home buyers want in the South, however, is not always what buyers in the West want. The survey identified some of the following regional preferences in home features:

• Home buyers in the South and Midwest viewed central air conditioning as a priority, with 91 percent and 81 percent, respectively, saying this feature was very important.
• Sixty-six percent of buyers in the South thought a walk-in closet in the master bedroom was very important, while 61 percent of Midwesterners valued an oversized garage.
• In the Northeast, the highest percentage of buyers placed a premium on a backyard or play area (53 percent), followed by central air conditioning at 41 percent.
• Two-thirds of buyers in the West want oversize garages (66 percent), followed by central air conditioning at 59 percent.

Fixing up the Nest

According to the survey, nearly six out of 10 recent home buyers took on remodeling or home improvement projects within three months of their purchase. Close to half of home buyers who remodeled or made improvements updated their kitchen, and nearly half remodeled or improved their bathroom.

New-home owners spent a median of $4,350 on home improvement or remodeling projects undertaken within three months of purchase.

“The fact that a majority of home buyers quickly remodel key areas of their homes ties into the fact that their home is a good, long-term investment,” says Paul Bishop, NAR manager of real estate research. “Regardless of market conditions in the short term, when purchased for the long term, housing is one of the safest investments consumers can make.”

Indeed, more than half of home buyers said they believe their home has high investment potential, and another four out of 10 say it has moderate investment potential. Only 3 percent felt their home’s investment potential was low.

Generational Differences

Age was the biggest differentiation in what buyers were looking for in a home. Buyers 75 years old and older wanted a single-level home (74 percent) that was less than 10 years old (43 percent) with a walk-in closet in the master bedroom (74 percent).

On the other hand, most buyers between the ages of 25-34 wanted a backyard or play area (60 percent).

More than half of buyers over 65 wanted a separate shower enclosure in the master bathroom, compared to only one-fourth of buyers ages 25-34.

Also, older buyers placed a higher priority on energy efficiency home features than did younger buyers — 63 percent of buyers 75 and older said it was very important, but only 32 percent of buyers who were 18-24 agreed.

Home Growth

Overall, the survey also revealed that while homes are getting bigger, the number of bedrooms is shrinking. From 2004 to 2006, the size of the typical home purchased increased by about 100 square feet to 1,840 square feet, while the median number of bedrooms dropped from four to three during that same period.

The median age of the home reported in the current survey is 12 years, down from 15 years in 2004.

Real estate practitioners see hundreds, if not thousands, of houses with their buyer clients every year and know exactly what buyers are looking for in a home, says NAR President Pat V. Combs. “This insight is one more way REALTORS® add value to the real estate transaction,” Combs says.

— REALTOR® Magazine Online

Daily Real Estate News | August 7, 2007

Remodelers Prefer the Old to the New

A growing number of remodelers are turning to used products, as the number of reused-material stores around the country has doubled in the last five years from 150 to 300, according to the Building Materials Reuse Association.

The stores are popular because well-made products — some of them from new construction sites and others from previous eras — can be purchased at a fraction of current retail cost.

Many of the sites are run by nonprofit organizations and get all or most of their products from donations, many of which come from homes that have been torn down or "deconstructed" instead of being demolished.

Still, not all reusable material is cheap. For instance, Mountain Lumber in Ruckersville, Va., which manufactures products from reclaimed wood, charges an average of about $3,000 for flooring for a 300-square-foot kitchen and about $8,000 for an 800-square-foot one. And that's just for the product — the company does not do installation.

Source: The Washington Post, Allan Lengel (08/04/07)

Daily Real Estate News | August 6, 2007

Pros and Cons of Living by Water

While demand never seems to disappear for waterfront property, the slowing real estate market has presented some great deals by lakes and oceans.

“The desire to look out your window and see water will always be there and will always be an added incentive for someone to purchase a home," says Richard Swerdlow, Miami-based chief executive of Condo.com, an online marketplace for buying and selling condos.

But there are drawbacks to living the waterfront life. Among them: premium property prices, high insurance rates (especially if you're near a flood zone), and costly maintenance because moist air corrodes pipes and eats away at paint. But there are just as many perks.

Tonja Demoff, author of the book Bubble Proof: Real Estate Strategies That Work in Any Market, offers these five reasons for considering coastal property.

• Ocean properties are in high demand and are often a great investment either for resale or rental income.
  
• Fewer mosquitoes and insects as the ocean breezes push the critters westward.
  
• Wonderful environment for children, away from the pollution of the city and a sedentary lifestyle.
  
• Great exercise potential for people of all ages, be it swimming or walking along the shore or coast.
  
• Ocean breezes make the hottest summer day feel cooler.

Source: Newsday, Laura Koss-Feder (08/03/2007)

Daily Real Estate News | August 2, 2007

Tips for Renting Out a Vacation Home

A vacation property construction boom over the past few years has boosted the overall number of vacation homes, but falling home values have made renting out these homes for extra cash an appealing option.

The result is a glut of places to spend a vacation. One expert is urging home owners who want to rent out their properties to consider off-season business.

The second and third weeks of September and the third and fourth weeks of October are going to be great weeks especially in Florida; Georgia; Myrtle Beach, S.C.; Hilton Head, N.C.; the Tennessee mountains; and Branson, Mo. and the Ozarks, predicts Christine Karpinski, author of How to Rent Vacation Properties by Owner.

Karpinski has this advice for home owners considering the rental game:

• Post lots of photos and information on your Web page. Make sure the information you provide is complete and accurate, and don't exaggerate. That will help avoid disappointment from renters who expect more than there is. "I, as a consumer, would not rent a place without seeing photos of each bedroom and the living room," she says.
  
• Replace the furniture often. The normal wear and tear on upholstery and linens can prove a turn-off for vacationers. They're much more satisfied when everything is crisp and new.
  
• Hire a caretaker. You need someone on-call nearby if there's distance between you and your rental property. That way, if there's a problem — the heat goes off, the oven won't light, etc. — there's someone who can offer quick problem solving.

Source: BusinessWeek Online, Maya Roney (07/18/07)

Daily Real Estate News | August 2, 2007

More Buildings Go Green

Energy efficient homes might still be the exception, but green building is gaining momentum, according to the U. S. Green Building Council and the National Association of Home Builders.

In fact, green building has become a $12 billion industry, according to USGBC estimates. A decade ago, USGBC says, its value was “negligible.”

A survey of local home building associations shows that more than 97,000 homes have been built and LEED-certified since the mid-1990s using voluntary, builder-supported green building programs nationwide. That’s a 50 percent increase since 2004 when the last survey was conducted, according to NAHB.

And the increase doesn't show any signs of slowing. The U.S. Green Building Council recently welcomed its 10,000th member into the organization, which encompasses builders, universities, government agencies, and nonprofit organizations devoted to green construction.

Both NAHB and USGBC are in the process of developing its own set of standards and guidelines for sustainable residential green construction and to further promote the green industry.

—By Camilla McLaughlin for REALTOR® Magazine Online

Daily Real Estate News | August 2, 2007

Home Values for the Top 20 Markets

The annual growth rate in prices of existing single family homes across the United States continued to decline for the 18th consecutive month in May, according to the Standard & Poor’s/Case-Shiller Home Price Index.

Overall, the top 20 cities in the index declined 2.8 percent year-over-year, although five of the cities showed increases.

Cities measured by the index where values have increased in the 12 months are Atlanta, Charlotte, Dallas, Portland, and Seattle. Detroit continues to lead the metro areas in growth rate declines, down 11.1 percent from a year ago.

Here are the top 20 metropolitan areas and the percent of change in their real estate values over the last year:

• Atlanta: 1.7 percent
• Boston: -4.3 percent
• Charlotte: 7 percent
• Chicago: -0.6 percent
• Cleveland: -2.8 percent
• Dallas: 1.8 percent
• Denver: -1.4 percent
• Detroit: -11.1 percent
• Las Vegas: -4.1 percent
• Los Angeles: -3.3 percent
• Miami: -3.3 percent
• Minneapolis: -3.5 percent
• New York: -2.3 percent
• Phoenix: -5.5 percent
• Portland: 5.7 percent
• San Diego: -7 percent
• San Francisco: -3.4 percent
• Seattle: 9.1 percent
• Tampa: -6.7 percent
• Washington, D.C.: -6.3 percent

— REALTOR® Magazine Online

Daily Real Estate News | August 1, 2007

NAR: Market Shows Signs of Improvement

The market is likely to stabilize in the months ahead, according to the NATIONAL ASSOCIATION OF REALTORS®’ forward-looking indicator on pending home sales.

The Pending Home Sales Index, based on contracts signed in June, was 5 percent higher from the downwardly revised May index of 97.5, but is still 8.6 percent below June 2006 when it stood at 112. Nevertheless, this 5 percent monthly gain is the largest in more than three years, since a 6.1 percent increase was recorded in March 2004.

Lawrence Yun, NAR senior economist, says it’s encouraging that the increase occurred in all four major regions of the United States. “However, it is too early to say if home sales have already passed bottom,” he says. “Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.”

The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.

What Happened Regionally

Here’s a breakdown of what the PHSI showed across the country:

• West: the PHSI increased 8.6 percent in June to 103.6, but was 5.5 percent below a year ago.
  
• Northeast: the index rose 3.1 percent from May to 96, which is 2.4 percent lower than June 2006.
  
• South: the index increased 4.7 percent in June to 111.6, but was 12.7 percent below a year ago.
  
• Midwest: the PHSI rose 3.5 percent in June to 92.5, which is 8.2 percent lower than June 2006.

— REALTOR® Magazine Online