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The Boomerang Effect
“Home Buyers returning in droves”
They’re back! Eight years after the real estate bust, many past homeowners who lost their homes have rebuilt their credit and are back in the market forming America’s growing ranks of boomerang buyers. In the next few years, these buyers will form one of the most important segments of the real estate market. About 700,000 of the 7.3 million homeowners who went through foreclosures or short sales during the bust have the potential to get a mortgage again this year.
The home-ownership rate in the United States reached an all-time high at 69% in 2007 but has dropped to a rate of 64%. With the large number of Boomerang buyers returning due to short wait periods, home-owner percentage will soon increase. We are now seeing 2-3 year wait periods to qualify after a foreclosure or short sale and 1 to 3 years after a Bankruptcy.
If you’re on the side lines paying the increasingly high rental prices, consider your options. When is the last time you talked to your loan broker?
Biggest Bang for your Remodeling Buck!
Our houses are also our homes, so we believe it’s important to be comfortable in your home and have it reflect your personality and your life style. Remodeling your home to your personal likes and dislikes is important; but having said that, it’s also important to look at what remodeling projects yield the best resale value and which yield the worst resale value. Every year the National Association of Realtors commissions a report on resale value of remodeling projects. These values vary throughout the country so the data below just represents results from Washington, Oregon, California and Hawaii.
Year after year, the most cost effective remodels have to do with “Curb Appeal” and replacing your front door, garage, or adding stone facing gives you the largest return on investment. You will get the lowest return on your investment by adding a home office, sunroom or putting in that doomsday backup generator, so you may want to think twice if you’re about to embark on any of those projects.
Here is a quick recap of the Remodeling Cost vs. Value Report:
#1 Project: Entry Door Replacement – Job Cost: $1,366 Resale Value: $1,683 Cost Recouped: 123%
#2 Project: Garage Door Replacement– Job Cost: $1,756 Resale Value: $1,929 Cost Recouped: 110%
#3 Stone Veneer– Job Cost: $7,258 Resale Value: $7,808 Cost Recouped: 107.6%
#4 Minor Kitchen Remodel– Job Cost: $21,497 Resale Value: $21,987 Cost Recouped: 102.3%
#5 Deck Addition– Job Cost: $11,685 Resale Value: $11,828 Cost Recouped: 101.2%
#6 Window Replacement– Job Cost: $12,489 Resale Value: $11,911 Cost Recouped: 95.4%
#1 Home Office Remodel– Job Cost: $32,652 Resale Value: $18,364 Cost Recouped: 56.2%
#2 Sunroom Addition-Job Cost: $83,694 Resale Value: $47,488 Cost Recouped: 56.7%
#3 Backup Power Generator– Job Cost: $13,226 Resale Value: $8,985 Cost Recouped: 67.9%
#4 Bathroom Remodel– Job Cost: $45,635 Resale Value: $33,715 Cost Recouped: 73.9%
If you’re thinking of remodeling to get your home ready for resale, remember that the best thing you can do outside of expensive remodels is to make your home uncluttered, depersonalized, clean and inviting. So take those pictures of you and your family off the walls, pack half your belongings, replace worn carpet, give your home a fresh paint job, spread fresh tan bark on flowerbeds, and add bright colored flowers in the entry!
For more details go to: www.remodeling.hw.net/cost-vs-value/2015