Real news on real estate
By Jay McCall, GRI, SFR, SGSB
The median price in March of homes sold was $292,500, an increase of 10% from March 2016. Months of inventory declined to 3.1, down from 3.5 in February 2016. Active inventory for sale was 285 in March of this year. Oro Valley had 121 properties under contract in March, increasing from 83 in prior month of February. The majority of current Oro Valley price points continue as a seller’s market. Homes priced above $500,000 remain a buyer’s market.
If planning any upgrades before selling consider: (1) Is home above comparables already? (2) Will upgrades increase value? Maybe fresh paint and decluttering is best choice. (3) Does home appear up-to-date to buyers. Key items to upgrade are kitchen, bathroom, entry door and landscaping. A kitchen minor upgrade has a 98.5% return compared to 91% for major upgrade. Minor bathroom offers a 102% return over 93% for major. Entry door offers a 90% return and landscaping a return of 100% according to a recent investment report.
From a recent study, millennials consider the same factors as parents when buying a home. (1) Control over living space and freedom to paint colors and having pets compared to renting - 93%, (2) A sense of privacy and security in choosing area for family - 90%. (3) Live in a nicer home with choice to renovate or restore - 87%, (4) Feel engaged in the community with ownership - 75% and (5) Have flexibility for future financial decisions with a home as a savings account thru increasing equity and appreciation - 53%.
Bathrooms being a key item for updating, here are considerations to avoid when making changes. Realtor.com lists seven changes that may be wrong. Unless it is a restored bungalow or mid-century with pink, turquoise, or grey with maroon tile, avoid the colors. Also, mustard, salmon, or avocado should be limited to accents. Skip the huge tub. Although shown in designs, total white bathrooms are hard to keep clean. Unless the house is totally minimal in design, avoid minimalism for the bathroom and the trend for open shelving. Although popular for the moment is rectangular subway title, avoid as a passing trend.
Many first-time home buyers believe that a perfect credit score and 15-20 % is required for a down payment. In February, 65% of first-time buyers put down less than 6% for a down payment. In the same month all loans granted averaged a 720 credit score, decreasing from 743 four years ago. Conventional loans averaged a 752 score compared to same year of 2013 and FHA loans were 686 in February compared to four years ago at a 697 credit score, from a National Association of Realtors’ report.
The April celebration of Earth Day reminded us of the monetary benefits from reducing home energy consumption. (1) Invest in a programmable thermostat. (2) Stop leaks around doors and windows. (3) Change light bulbs to CFLS compact fluorescent light or LED bulbs. (4) Add insulation to crawl spaces, walls and ceiling with an R-value of 50. (5) Replace old appliances with energy efficient models when they fail.
The first real estate investment is a home. Consider it the springboard to future real estate purchases to build a cash flow and equity growth portfolio. Visit the monthly Tucson Real Estate Investment Forum, at Viscount Hotel, 4855 N. Broadway, 6-7:30 pm on the first Tuesday. $5.00 a visit or $35.00 annual fee. Contact: 520-909-9375 or email@example.com.
Jay McCall is a real estate consultant at Berkshire Hathaway HomeServices Arizona Properties. His career experience spanning banking, mortgages and real estate offers knowledgeable and professional service. He is reached at: firstname.lastname@example.org