My Old House: Good Time to Renovate, Not Quite Time to Sell – Guest Post
We have all heard that funny little adage that the 3 most important things in real estate are: location, location, location. Well, that might be changing to: timing, timing, timing, knowing when to hold onto a house and when to sell it has a huge impact on the financial return of that investment. In the current market atmosphere, many home owners are bidding their time and investing in small to medium sized renovations of their homes; priming and prepping their real estate for the opportune moment to sell and here’s why.
In an article for TLC entitled, How can I renovate in a recession?” they write, “One result of the housing mess is people are staying in their houses longer. With contractors out of work and materials dropping in prices, a recession is a pretty good time to renovate that starter home, as long as the project will add good value for minimum investment.” One of the more opportune moments to renovate is at the start of a recovery and that is precisely where many Southwest homeowners are standing right now.
Here is a look at 3 of the major states in the Southwest and the climate of their housing market, starting with the Valentine Day State, Arizona; a state that was hit dreadfully hard by the housing crash. Arizona had been built-up and forced to grow at such a rapid rate; it just wasn’t sustainable which is now clearly seen in our crystal-clear foresight vision.
But Arizona’s housing market is starting to turn it around; leading economists are projecting that the economy will be “normal” in around 2015. So, Arizonians are almost there. Departmentofnumbers.com found that as of mid October 2012 there were approximately 16,288 single family and condo homes for sale in Phoenix, AZ and the average asking price of these homes was around $205,000. They also stated “Since this time last year, the inventory of homes for sale has decreased by 20.4% and the median price has increased by 24.2%.” So Arizona house prices are higher and there are fewer of them on the market.
Arizona’s kitty-corner neighbor Colorado has a housing market that is also seeing brighter days. Their new housing construction continues to struggle, but chief economist of the National Association of Realtors, Lawrence Yun told The Denver Post that residential sales for 2012 is up 8% nationally and about 10% higher than it was in 2011.
Departmentofnumbers.com found Denver, CO’s average asking price for homes is around $300,000 and the average price has increased by 7.1%. Like Arizona, there are fewer houses on the market and they are going for a higher price in the Rocky Mountain State as well.
Lastly, if you live in the Silver State with the bright lights of Las Vegas twinkling in the bottom corner, you don’t need to be told about the pains of the housing market. The Las Vegas Sun reported “Nevada has the highest foreclosure rate in the country and the metro area is consistently one of the top five worse in the nation.”
Theatlanticcity.com reported “Las Vegas was ground zero of the housing bubble… In the end, home prices would decline 60 percent, and 65 percent of homeowners are underwater on their mortgages.” That means that for every 5 people on the street 3 or more of them would be living in houses where they owed more on the house than it was worth. But even in Las Vegas the Departmentofnumbers.com found the housing market on a slow but steady upswing with the average asking price being around $130,000 and the average price for homes going up 8.5% with a 22.7% decrease of homes on the market.
So what does all this mean to homeowners in the Southwest who are looking to sell their homes?
And if you were thinking about investing in a few improvements to your home, now would be a good time.
The FPA (Financial Planning Association) in an article entitled, Be Smart about Renovations in a Down Home Market, wrote “It’s unlikely the real estate market will return to the fever pitch of the mid-2000s anytime soon – and maybe that’s not such a bad thing. But even though homes are languishing on the market, it’s not a bad time to make sensible renovations that will better position your property when times improve.” They wrote that in 2008 and here we are still “languishing” but home owners could also take this opportunity to be proactive while they continue to be patient.
When thinking about renovations to your home, consider what is the smallest renovation you can make for the biggest impact. Real Estate brokers consider items like: flooring, countertops, cabinets, new hardware and newly remodeled bathroom to be very attractive upgrades; ones that the buyers deeply desire but do not want to necessarily undertake themselves. Potential home buyers are willing to pay more for a home that has: granite countertops, new cabinets, upgraded flooring, new faucet features and upgrades in the bathrooms already in place then they were in the past.
So if the location of your real estate is in the Southwest, you are on the brink of seeing better home sale results. Just wait a little longer and note that savvy homeowners are using this time to get a leg up on the competition. This might not be the perfect time for you to sell your home, but the time for a home renovation is now.
Quinn Dawson is a professional blogger, currently working with Primera Interiors.