Changing the public’s opinion of real estate professionals

real estateGallup (gallup.com) conducts a regular poll of ethics and honesty of various professions. Although the survey is not inclusive of all professions, many are covered in alternating years. Results from the 2013 survey ranked the top five professions as (along with their corresponding “Very High/High” rating) nurses (82%), pharmacists (70%), grade school teachers (70%), medical doctors (69%), and military officers (69%). At the bottom of the list we can find lobbyists (6%), members of congress (8%), car salespeople (9%), state office holders and advertising practitioners were tied at 14%, and lawyers and TV reporters were tied at 20%.

Real estate agents were included in the 2011 Gallup Ethics and Honesty survey, where they were rated with a 20% Very High/High rating; which would be toward the bottom of the list. The 20% rating is actually an improvement from the 17% rating given in 2008. Believe it or not, the 20% rating seems to be the highest rating achieved by real estate agents since the first time they appeared in the poll in 1977; and 2011 was the second time for such a rating (2005 was the first). Historically, the rating ranged from 13% to 19%; not surprisingly, the lowest ratings seem to coincide with housing market slowdowns.

The “Very High/High” rating used to compare consumer opinion of professions may be a little misleading. The 20% “Very High/High” rating in ethics and honesty could lead one to believe that agents are generally viewed negatively. However, in 2011 the “Low/Very Low” rating was 22%; while the 57% “Average” rating may be more indicative of consumers’ opinion of real estate agents’ ethics – which is indifference.

The National Association of Realtors® has for years tried to influence public opinion of Realtors® and the industry (not all real estate agents are Realtors®; Realtors® are members of the NAR), by publicly promoting the high ethical standards by which Realtors® are held. Many are unaware that a code of ethics was adopted in 1913 by the association (which was then called the National Association of Real Estate Boards), and has since strived to instill and maintain a high level of integrity in the field.

With such emphasis on ethics, you might expect that public opinion would be much higher. Unfortunately, the limited research on consumer perception of ethics is mixed at best. And according to one study, consumers consider price, quality, and value more important than ethical criteria in purchase behavior (The myth of the ethical consumer – do ethics matter in purchase behaviour? The Journal of Consumer Marketing. 2001;18(7),560-577.)

The reality may be that consumers are not necessarily concerned about ethical behavior or honesty when hiring agents; which may be why the NAR has decided to add a compulsory dimension of “value” for practitioners so as to increase public opinion of the industry. In an effort to increase professionalism standards, the NAR recently approved an “aspirational” Code of Excellence. A report on the November 10th NAR Board of Directors meeting stated (realtor.org), “The goal is to raise the practice of real estate measurably through increased training in the competencies that consumers value. These competencies include the stewardship of property listing data, privacy and security of consumer information, advocacy of property rights, community involvement, and technology.” NAR President Steve Brown was quoted to say, “This is the first step in a process for the continuing improvement of our profession…”

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in code of ethics, ethics, real estate, real estate agent, Realtor, Realtor ethics | Tagged , , , , | Leave a comment

Value vs. affordability – how inflation affects home prices

homes for saleHome buyers have been tagged as being too picky for not buying homes this year. Surely home buyers have a right to be particular; after all, they’ll be spending a lot of time in the house – and spending a lot of money to get it too! But, maybe there are other reasons that home buyers have become hesitant.

Consider the uncertainty that immediately followed the Great Recession, when home sales volume dropped off. At that time home buyers seemed overly analytic, weighing many factors including short term value. Yet in truth they were fearful about economic uncertainty, and paying for a home that could potentially depreciate after closing.

The specter of another housing bubble in late 2013 may have seemed farfetched by many. But the double digit appreciation in many housing markets around the country reminded many home buyers of the environment that existed in the pre-downturn “go-go” market of 2005-2007. Anecdotal reports of bidding wars and high listing prices in early 2014 may have scared off some home buyers who reported not wanting to participate in such a market.

Reasons for home sales sluggishness during the latter part of this year may have been signs that the fear of a home price bubble was being realized by home buyers. As home buyers sought value, home sellers wanted higher home price appreciation. Was the psychology of fear playing a part in the ongoing home pricing struggle?

In hindsight, the limited housing inventory that existed during 2013 may have caused upward pressure on home prices by forcing increased competition among home buyers. The rapid home price appreciation may have also been the reason for many home owners to go to market. Brimming with listings, housing inventory swelled to levels not seen in years. Yet it may not be home prices per se that is at issue, but rather affordability.

Affordability goes beyond just the purchase price of a home. It comprises the overall costs of home ownership; which includes monthly mortgage payments, property taxes, homeowners’ insurance, regular and emergency maintenance, and utility costs. Putting aside home prices, home buyers are faced with the prospect of sharply inflating ownership costs. Consider the April 25th LA Times article reporting on utility costs (U.S. electricity prices may be going up for good; latimes.com); Ralph Vartabedian stated, “… the price of electricity has already been rising over the last decade, jumping by double digits in many states, even after accounting for inflation. In California, residential electricity prices shot up 30% between 2006 and 2012, adjusted for inflation, according to Energy Department figures. Experts in the state’s energy markets project the price could jump an additional 47% over the next 15 years.”

Savings also affect the affordability of a home. Marilyn Kennedy Melia, in her May 17th feature: Savings Habits and the Housing Market: American are saving less, issues with affording a home (nwitimes.com), reported that a lack of savings is preventing some home buyers from purchasing homes by not having enough for a down payment and/or little for homeownership costs. She described a recent Bankrate survey that indicated “…51 percent of Americans have more emergency savings than credit card debt, the lowest percentage since the financial site began tracking this issue in 2011.” Doug Robinson, of NeighborWorks America, was quoted to say, “Two-thirds of the people who faced foreclosure didn’t have any emergency savings…

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in economics, Home Buyer, home buyer behavior, housing market, real estate, Real Estate Market | Tagged , , , , , , , | Leave a comment

Overcoming challenges of a winter home sale

home saleSome might say that selling a home during the winter is advantageous because of limited seller competition. Although it may be true that there is less competition, there is typically less home buyer traffic during winter months as well. Additionally, many home buyers who look during the winter months expect home sellers to be more flexible about pricing, and may subsequently make a lowball offer. However, if you’re having your home on the market during the winter, preparation and marketing can increase your success.

Ideally, you have your furnace checked and cleaned annually by a licensed HVAC professional. But if you don’t, this might be at the top of your list to ensure your home is comfortably heated to warmly greet home buyers from the cold.

Checking the condition of the home’s roof, gutters and downspouts can lessen the impact of severe weather, including heavy snow and ice. Ice dams resulting from melted and frozen snow are known to lift roof shingles and siding – which can allow water to make its way into your home. Water penetration from ice dams can damage ceilings, walls and window casings. Left unrepaired, mold and possible structural issues may develop; which is obviously an issue when selling a home.

Snow and ice removal/treatment from sidewalks and steps is essential when selling your home, so as to lessen the possibility of someone slipping and getting hurt from a fall. Additionally, downspouts should also be cleared of snow to reduce drainage blockages, which can be a source of water buildup around the home’s foundation.

Another winter concern is plumbing maintenance. Problems with pipes can arise anytime the temperature falls below the freezing point. There is a misconception that frozen water inside pipes cause pipe ruptures; however, pressure that builds up from trapped air within frozen pipes is typically the culprit. A licensed plumber can advise you on preventing freezing pipes.

If you’re selling a vacant home, you might consider winterizing it. “Winterizing” is a term that describes the draining of the plumbing system. Winterizing may reduce the risk of bursting pipes and damaging plumbing fixtures. Hiring a licensed plumber to winterize/de-winterize may decrease the probability of damage to the plumbing system from any high pressure build-up. If you are out of town, you might consider having a trusted person regularly check on the home (even if you are listed with a real estate agent). This person can take care of any house related issues that may arise while you are away.

Decluttering your home can sometimes be a challenge; and during winter months, it can be even be more challenging to keep the home clutter-free. Winter is when we spend time indoors, creating comfort areas where we may accumulate “stuff.” Organization can help limit accumulation of winter clutter, but a daily tidy up may also be necessary to be ready for any buyer viewing.

Just because it is winter does not mean you should stop actively marketing your home sale. Having a winter pricing and marketing strategy can prepare for showings and negotiating with lowball offers. Weather permitting, winter open houses are a great way to allow potential home buyers to view your home in a controlled concentrated time period. Communicate with your agent about showing times and instructions; you may need additional notice for any last minute tidying as well as changing your availability due to the holiday season.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in home pricing strategy, home sale, Home selling strategy, market timing, real estate | Tagged , , , , | Leave a comment

Helping family with homeownership

real estateThe holiday season is about spending time with family and enjoying each other’s company. But as a consequence of the Great Recession, some family members (including adult children) have made “family time” a year round thing by moving in. Whether it’s a child moving back with parents after college, or maybe family who suffered a financial hardship; having accommodating family can be a blessing. However, as the economy slowly improves, the post-recession family nesting trend is changing and many are (re)establishing their own homes.

Some people are taking advantage of an improving housing market to create one of the recent housing trends – purchasing an investment property to “house” family members. Although the benefits of purchasing an investment property and having family live there may not be obvious, some realize that it can be mutually beneficial. Having a trusty and inherently loyal family member live in the rental property can mean a regular rent check, as well as ensure that the home is maintained. As with any investment property – the longer you own it, the greater potential for long term equity.

Some are banking on recent rising home values and taking out a home equity line to purchase investment homes, although some are fortunate to have the assets to pay cash. However, many rely on financing the property, which requires a hefty down payment (typically 20%) as well as an interest rate slightly higher than that of the owner-occupant mortgage you might have on your own home. And although buying an investment property to house family members sounds as if it is a no-brainer to get them out of your own house; due diligence is required to determine if this is advantageous for you, as well as consulting with your tax preparer about tax benefits and/or consequences.

If buying the investment property is not an option, you may be able to help family qualify for a mortgage of their own. Although FHA mortgages are typically common among first time home buyers and/or buyers who need a low down payment loan; FHA has been the go-to program for helping family buy a home –especially when the home buyer falls short of qualifying on their own because of a lack of employment history, assets, and qualifying income. Although Fannie Mae, Freddie Mac and VA permits co-borrowers who are not intending to live in the home to co-sign for family; FHA has additional features that may make the loan more attractive. Besides allowing family to gift the borrower’s down payment, FHA may allow alternate credit sources to be substituted when the borrower has insufficient established traditional credit.

Although “co-signing” as a non-occupying co-borrower might help your child or some other family member become a home owner, it should not be taken lightly. You have to consider that even though you do not intend to live in the house or make the mortgage payments, you are signing the mortgage note. Not only could you be held responsible if payments are not made, your credit may even be dinged even if payments are late.

Although there are benefits to having extended family live together, you might be thinking of helping them start their own household. Before making any decisions, do your due diligence. And talk to several lenders, as with any mortgage loan program – underwriting varies from lender to lender and guidelines typically change without notice.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in home ownership, homeownership, investment homes, real estate | Tagged , , , , , | Leave a comment

Why real estate and home sales will rebound in 2015

home for saleThe recent stumble of the housing market recovery has been a head scratcher for many. Surely low interest rates and an abundant number of homes for sale should have been incentive for any home buyer. But alas, many have been disappointed by the 2014 housing trends; even with sparse anecdotes of quick sales and bidding wars. However, many are optimistic about the housing market for 2015 because of the combination of low mortgage interest rates, increased access to credit, and moderating home prices – which could transform reluctant “looky loos” into eager home buyers.

Don’t count on low mortgage interest rates, per se, to incentivize home buyers. Although interest rates have been historically low since shortly after the financial crisis, it seems to not have been an incentive on its own to purchase homes. Industry experts have tried to pinpoint the timing of rate increases since rates first dipped below 5% in 2010. And even though rates were anticipated to have jumped when the Fed tapered its asset purchasing program this year, rates continue to be relative to historical lows. The average mortgage interest rate according to the Freddie Mac Primary Mortgage Market Survey (freddiemac.com) is 4.01% (as of November 13th); yet home sale volume continues to lag behind 2013 figures.

Very low interest rates may continue into 2015. Back in 2012, the Federal Reserve Open Market Committee indicated that interest rates would remain “exceptionally” low through 2014. Fast forward to September’s Federal Reserve Open Market Committee meeting; the October Fed press release (federalreserve.gov) reported the FOMC maintaining the 0 to ¼ percent target rate, even for a “considerable time following the end of its asset purchase program…”

On the other hand, loosening mortgage credit underwriting could help some would-be home buyers; but it is unclear who would take advantage of such programs, and how it will help them. Tightened credit and underwriting standards that resulted from the financial crisis, along with government intervention in the form of the Dodd – Frank legislation, created regulation and stringent lending standards (such as comprehensive validation of financial standing and strict adherence to debt to income ratios); which critics point to as having hampered lenders from making loans. However, some lenders are beginning to introduce less restrictive mortgage programs, which may accommodate the self employed and those with high student loan debt.

Of course, home prices have been a point of contention between home buyers and sellers for a number of years. Home sellers seeking higher prices are sometimes thwarted by home buyers looking for affordability and value. The seeming home price tug-of-war that favored home sellers in 2013, appeared to turn back in favor of home buyers during late summer of 2014. The October 28th release of the S&P/Case-Shiller Home Price Indices (housingviews.com) reported further deceleration of home price appreciation. The National Index showed a 5.1% annual gain, which is lower than the 5.6% annual gain reported in July. The Washington DC region saw a 3.1% annual increase; but a 0% change in August, compared to the 0.1% change in July.

Additionally, the 15% increase in national foreclosure activity, as reported by RealtyTrac (realtytrac.com), could be a wildcard for home prices. It remains to be seen if the 26% increase in foreclosure activity in the D.C. metropolitan area from the previous year is a trend, or just a result of lenders clearing “shadow” inventory.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in home prices, housing market, mortgage, real estate, Real Estate Market | Tagged , , , , | Leave a comment

Narcissistic real estate agents?

HousesA common criticism of real estate agents is that they are manipulative and often focused on their own needs rather the home buyer or seller. Could it be that real estate agents are narcissists? Samuel Lopez De Victoria, Ph.D. describes a narcissist in the World of Psychology blog (psychcentral.com/blog) as someone who is preoccupied with “self, personal preferences, aspirations, needs, success, and how he/she is perceived by others.”

In an industry that relies on self promotion, it’s not as easy as you might think to spot a narcissist; they initially don’t often come across as manipulative or self centered. Dr. Lopez De Victoria describes extreme narcissists as being able to portray themselves in many ways to attract others to get what they want, including: being the likeable “nice person;” being the “proper diplomatic” person that appears to care (but really does not); and of course, being the charming person.

Dr. Lopez De Victoria says that having some amount of narcissism is normal and even healthy. So even though most agents are not extreme narcissists, it does not address the remorse expressed by some about the agents they chose. Even though industry experts recommend interviewing several agents before buying or listing a home, the majority of home buyers and sellers do not. According to the National Association of Realtors® 2014 Highlights of the Profile of Buyers and Sellers (realtor.rog), 70% of home sellers and about 66% of home buyers only contacted one agent before listing or buying a home. Regardless of the remorse expressed by home buyers and sellers about their agent, maybe they would have chosen to work with other agents if given the chance.

Although interviewing several agents before you buy or sell a home won’t eliminate all remorse over your choice of agent, it can certainly increase the probability of your satisfaction. If you choose to interview several agents, you might consider having a conversation about their experience, knowledge, and expertise. Additionally, knowledge about the local neighborhood market and surrounding neighborhoods is extremely important because market trends are hyper-local. You should also talk about the agent’s specialized experience, if your buying or selling situation is unique.

You should also ask about the agent’s limitations. This is an area where some agents get themselves into trouble is by not knowing, or are unwilling to disclose their limitations to potential buyers or sellers. By discussing the agent’s limitations, you can understand what the agent can and cannot do as well as know when the agent will refer you to other professionals for advice; this can also frame your expectations.

To get some insight into the agent’s way of thinking and service, you might consider asking atypical questions too! Surely an agent is more than happy to talk about their accomplishments, number of sales, and even name drop a past client or two; but what about the listings that didn’t sell? Have they been fired by a client?

The ratio of expired to sold listings can be telling; is the agent focused on servicing your listing or is it a “numbers game” for them? If an agent is open to sharing those figures, ask for reasons why the listings didn’t sell; was it about price or the marketing? If an agent has a history of being fired, it could be a possible indication of issues with the quality of service, including over-promising and not meeting expectations.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in real estate, real estate agent, Realtor | Tagged , , , , , , | Leave a comment

How home buyers and sellers have changed and remained the same

HomesThe National Association of Realtors® annual Profile of Home Buyers and Sellers is characterized as being a survey of home buyers and sellers that reveals “demographics, housing characteristics and the experience of consumers in the housing market, including the role that real estate professionals play in home sales transactions (realtor.org). The release of the Highlights of the 2014 Profile of Home buyers and Sellers on November 3rd by NAR provides insight into home buyer and seller behavior. I compare a small sample of data from three Profiles that demonstrates how some things have changed, and how some things have stayed the same.

The recent lack of first time home buyer participation is one of the issues that experts point to as holding back a full housing recovery, and has been highlighted by the 2014 Profile of Home buyers and Sellers. Only thirty-three percent of home buyers surveyed in 2014 were first time buyers, which the NAR points out as being below the “historical norm of forty percent among primary residence buyers.” Compared to 2003, NAR reported that forty percent of home buyers were first time home buyers. However, fifty percent of home buyers reported being first time buyers during 2010, which is most likely due to the first time home buyer tax credit that was offered at the time to stimulate home sales.

The 2014 survey revealed that home buyers searched on average for 10 weeks and viewed 10 homes; which is reduced from the 12 week average search indicated the year prior. The 2010 report also indicated a 12 week average search, looking at an average of 12 homes. But these home search stats are a far cry from the 8 week average search time viewing 10 homes reported in 2003.

As you might have expected, home buyer use of the internet has grown. In the 2014 survey, ninety-two percent of buyers reported using the internet in some way in the process. The first step for forty-three percent of home buyers was to look at properties online; while only twelve percent of home buyers initially used the internet for information about the home buying process. The use of mobile applications has significantly increased as technology allowed; fifty percent of buyers reported using mobile websites or applications. Compare this to 2010, when about ninety percent of home buyers reported using the internet; and in 2003 when only forty-two percent of home buyers reported searching for homes online.

Rather than eliminating real estate agents, the internet has changed the relationship between agents, buyers and sellers. Ninety-eight percent of buyers in 2014, who used an agent, viewed them as being a useful source of information. Eighty eight percent of surveyed buyers indicated they used an agent to purchase their home, compared to eighty-one percent in 2010, and eighty-six in 2003.

Ninety-one percent of surveyed sellers in 2014 reported their homes were listed on the MLS, but eighty-eight percent had assistance from real estate agents. Only nine percent of surveyed sellers sold “by-owner.” The 2010 seller stats are consistent with the 2014 Profile; while the 2003 survey indicated eighty-three percent of home sellers used an agent’s assistance to sell their home.

There are differences between buyers and sellers also.  Among the differences in how they choose their agent: the 2014 survey indicated that forty-four percent of home buyers, compared to thirty-eight percent of home sellers, found their agent by a referral through a friend or family.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in Home Buyer, home buyer behavior, home seller, home seller behavior, real estate | Tagged , , , , | Leave a comment

when selling home – stay away from gimmicks & listen to buyers

home sellingYou’ve probably heard a story or two about a home that was priced very low to “create a buzz” and illicit a bidding war. And in fact, there was a 2012 article in a local newspaper about such a sale in DC that touted the rebounding housing market. But guess what? A recently published study, with robust empirical data, suggests that such a strategy may not be the best for a home seller. Furthermore, the study suggests evidence that real estate agents who recommend under pricing as a strategy believe that homes listed for less – sell for less than comparable homes.

Bucchianeri & Minson (A Homeowner’s Dilemma: Anchoring in Residential Real Estate Transactions. Journal of Economic Behavior & Organization. May 2013: 76–92) collected and compared data related to “anchoring” (higher list price to prompt buyers to make higher offers) and “herding” (lower list prices intended to creating bidding wars) theories. Although actual sale prices may depend on location and time on market, the conclusions are that homes listed at higher prices sold for more than those that relied on bidding up the price. The authors suggest that sellers should think twice before under pricing their home to create a bidding war; and suggest that results from such strategies are typically anecdotal.

If setting a higher price may translate into a longer time on market, how could you know if you are priced too high or low? Listen to home buyers. A study conducted by Case, Shiller, & Thompson (“What have they been Thinking? Homebuyer Behavior in Hot and Cold Markets.” Brookings Papers on Economic Activity. 2012: 265-315) of 25 years of data in four metropolitan areas concluded that there is a strong relationship between buyer’s perception of price trends and actual price changes; the stronger the price trend (in either direction), the stronger the agreement among home buyers perceptions.

Home buyers’ short term and long term expectations of home prices can differ. And although Case, Shiller, & Thompson indicate that it is more difficult to gauge long term pricing expectations, they were undoubtedly impressed that buyers’ were “out in front” of short term home price changes. They stated, “…We find that homebuyers were generally well informed, and that their short-run expectations if anything underreacted to the year-to-year change in actual home prices.”

If deciding on your home’s selling price gives you a headache, Stefanos Chen wonders if taking a Tylenol could assist in making a decision. In his October 23rd Wall Street Journal article (Can Tylenol Ease the Pain of a Home Sale?), Chen reported of to-be-published research that indicates taking the pain reliever may ease the anguish associated with “loss-aversion” (an avoidance of a perceived loss).

Can acetaminophen reduce the pain of decision-making?” by DeWall, Chester & White is expected to be published in the January volume of the Journal of Experimental Social Psychology (pages 117-120). The results indicate that those who took acetaminophen sold a mug (that was given to them 30 seconds prior) for significantly less than those who tool a placebo. Chen’s question whether taking a Tylenol could help a seller take a lower sales price is a stretch, considering that the study was limited to 95 college student subjects. Although further research is indicated, the study’s conclusions may have implications to lessening the “pain” of letting go of ownership.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in Home Buyer, home buyer behavior, home pricing strategy, home seller, Home selling strategy, homebuyer, real estate | Tagged , , , , | Leave a comment

Trendy is not for home staging

interior designDeparting from the safety of natural materials and earth tones, big and bold interior design has become popular this year. Many designers have talked about 2014 as the year of using bright colors, brass and other yellow metals throughout the house. But if you’re selling your home, tread cautiously– because trendy may not be the best choices for staging your listed home.

Kelly Walters of HGTV (Color Trends: What’s New, What’s Next?; hgtv.com) talked about color use in the home, over the last ten years, being a reflection of our need for safety after 9/11 and the Great Recession. However, this is the year for change, and it’s reflected in the colors we choose for our interiors. A palette of gray hues is replacing the use of browns as the favorite neutral color; while reds, pinks, and violets are trending in popularity.

Using brass throughout the house has been the buzz during 2014. Kate Watson-Smyth reported the popularity of brass (Why brass is back as the new must-have metal for home décor; Financial Times, January 24, 2014; ft.com) as being a trend moving away from shine towards warmer tones. The use of brass and similar metals has also expanded from stylish bathroom finishes and hardware to fixtures as well as furniture.

Remember wallpaper? It’s back! Realtor® Magazine’s Barbara Ballinger wrote about how wallpaper has made a comeback. Relegated to accents, wallpaper is once again acceptable as wall covers (Wallpaper: Back in the Game; Realtor® Magazine, October 2014; realtormag.realtor.org). The new generation of wallpapers are eco-friendly and easier to use; inks are typically water based, while many papers are designed as “peel and stick” to be easily removed and reused.

Kitchens are important to many of us, and what could be better for the home chef than their own hydroponic garden. On her blog The Entertaining House, Jessica Ryan (jessicagordonryan.com) describes the Chef’s Garden Wall hydroponic system, “Fresh is the new green.” Because some kitchen hydroponic systems are low maintenance, you don’t necessarily have to be a gardener to have fresh greens at your finger tips all year.

Although trendy interior design may seem modern and stylish, it may not be the best choices when selling your home. Melissa Tracey wrote in her Home Trends Blog (5 Design Trends You May Want to Avoid in Staging; August 11, 2014; blogs.realtor.org), “Staging in trendy fabrics, colors, and finishes may offer up buyers a feeling that the home is up-to-date and move-in-ready. But getting too trendy can also backfire, particularly if it’s too personalized.”

And about those interior design trends I listed above? Tracey says to “steer clear.” Although wallpaper may be a tempting and easy way to brighten up a room, she says to stick with paint because wallpaper may interfere with a buyers’ vision of living in the room. And when painting, she says that trendy colors may be “too bold” for buyers; sellers should stick with neutral colors, using bolder colors as accents (such as pillows, rugs, and lamps). And although many designers are going all in on brass, it’s best to use it sparingly as accents when staging your home. The trend toward doorless kitchen cabinets is to be avoided, because buyers will undoubtedly ask “Where are the doors?” And finally, Tracey points out that the highly popular Tuscan and French Provincial themes are giving way to transitional and contemporary styles.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in design, home design, home sale, home seller, Home Staging, real estate | Tagged , , , , , , | Leave a comment

Home designs for multigenerational families under one roof

For Sale“Wait long enough and it will come back in style” is a saying that typically applies to clothing styles and fashion. And unlike fashion trends, which typically relies on pop culture, fads, and a designer’s vision; home design trends are more practical and rely on changing life styles, advances in building technologies, and the development and/or use of new construction materials.

Although the idea of extended family living under one roof has not been commonplace for decades, multigenerational life styles have been trending in recent years. And this year, there was a surge in the demand of multigenerational home designs.

Consider a Pew Research Center analysis, as reported by Sally Abrahms in the AARP Bulletin (3 Generations Under One Roof, April 2013; aarp.org), that indicated multigenerational households increased 10.5 percent (which is about 16.7 percent of the U.S. population) between 2007 and 2009. She also cited a 2012 survey by the Pulte Group, that indicated about 32 percent of adult children plan to live with their parents.

Such surveys make sense, if you consider that our population is increasingly aging. And as long term care costs are increasing, there is growing pressure on adult children to take care of their parents during their waning years and declining health (as was once expected decades ago). Consider the cost of long term care as reported by Genworth Financial (genworth.com): the 2014 Maryland median cost of a private one bedroom accommodation in an assisted living facility is $40,800 per year; while the 2014 Maryland median cost for a semi-private room in a nursing home is $98,368 per year.

Besides the rising aging population, Abrahms also pointed out that multigenerational living is also due to the return of young adults to their parents’ homes. Also known as the “boomerang generation,” many pay rent and contribute to housing costs. About 75% of young adults aged 25-34 moved back with parents; as well 61% of young adults aged 25-34 who know of friends or family who moved back with parents due to lack of living arrangements, lack of money, and/or lack of employment.

In the past, the extended families that lived under one roof had little choice but to make the best use of a home typically designed for one family. However, home builders have taken notice of the trend in multigenerational households and have responded. Amy Taxin, of the Associated Press, reported (The family that stays together: Homebuilders are making room for more multigenerational households; Associated Press – The Washington Times, April 16, 2012) that builders are offering single family home designs with “…semi-independent suites with separate entries, bathrooms and kitchenettes. Some suites even include their own laundry areas and outdoor patios for additional privacy, though they maintain a connection to the main house through an inside door.

Taxin pointed out multigenerational housing options, which includes: Lennar Corp, which offered a 3,400 square foot home in the Las Vegas area that contained 700 square foot suites; and Standard Pacific Homes that rolled out the “casitas” idea which is independent living areas attached to the main house.

After many decades of the “break-away” family, a number of socio-economic factors have come together to bring about the reintegration of the extended family under one roof. The idea that multigenerational living is once again popular has created a new niche and trend for home builders and architects.

© Dan Krell
Google+

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Posted in economy, home builder, home design, home prices, real estate, trends in housing | Tagged , , , , , | Leave a comment