Swimming Pool and Home Value

Swimming Pool
Exterior Remodeling (infographic from nar.realtor)

Wouldn’t it be nice to beat the summer time heat in a swimming pool?  Besides cooling off, the idea of having a swimming pool is attractive to many home owners for many reasons, including entertaining guests and exercise (if large enough).  Pool company advertisements suggest a swimming pool can make your yard more attractive, and add value to your home.  But is a swimming pool really worth it?  It all depends on the local housing market and your lifestyle. 

Statistics and information compiled by The Spruce (thespruce.com), an online lifestyle magazine, reveals swimming pool popularity from sources such as the Association of Pool & Spa Professionals and the US Census.  Incredibly, there are 10.4 million residential and 309,000 public swimming pools in the United States.  Swimming is the fourth most popular activity, and is the most popular among children and teens.  The top five states with inground pools are California, Florida, Texas, Arizona, and New York.  Swimming statistics in the US indicate that thirty-six percent of children and fifteen percent of adults swim annually.

Before you start digging, there’s a lot to consider.  Besides liability and health concerns, let’s discuss a pool’s added value on your home.  The question whether adding a swimming pool is a good investment depends on a number of factors.  Real estate research typically validates such questions, unfortunately, studies are lacking.  However, there is such an analysis from 1981 by Benedict J. Frederick (Effect of a Swimming Pool on Single-Family Home Value; Appraisal Journal; July 1981, Vol. 49 Issue 3, p376).  Even Frederick confessed he was hard pressed to find academic interest in the topic, citing a previous study from 1961.  Nonetheless, the study conducted in suburban Baltimore yielded these conclusions: A pool can add about 7 percent to the price of a home; a pool’s market value may be 50-75 percent of the pool’s replacement cost; having pool amenities, such as a heater, can boost value; 40 percent of the market believe having a pool is a liability. 

A swimming pool’s added value may be tricky, especially if other neighborhood homes don’t have a pool.  If you’re the only residential pool in the neighborhood, the added value to your home may be minimal.  In fact, having a swimming pool may be a disincentive for many home buyers, and could negatively affect the value. 

There’s also the expense of maintaining a pool.  Melissa Dittmann Tracey, writing for Realtor Magazine (Are Pools Worth the Expense?; nar.realtor), points out that typical swimming pool maintenance can have an annual cost of about $3,000-$5,000.  And that’s if everything works properly.  If components need replacing, then the cost can rise quickly.  Older pools require updates and component replacements.  Resurfacing or redecking expenses can vary, but Tracey estimates a typical cost to be $5,000 to $10,000 (depending on size of pool).  Renovating a pool can cost upwards of $20,000.  If you’re tired of the pool and want to reclaim your back yard, removing a pool can also be expensive.  Depending on the pool and yard size, a pool removal typically ranges from $3,000 to $15,000.

Given the research and industry statistics, the decision to build a back-yard swimming pool is more likely a lifestyle choice rather than for home improvement.  However, for those who enjoy the pool but don’t want the expense or liability of ownership, joining a club or swimming at the public pool are common alternatives.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/07/04/swimming-pool-and-home-value/

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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.

Home sale renovations

home sale renovations
Interior Home Sale Renovations (infographic from nar.realtor)

According to the National Association of Realtors (nar.realtor), the average time a homeowner stays in their home is ten years.  This is higher than the seven-year average prior to the great recession (but is less than the thirteen-year average immediately following the recession).  Needless to say, many homeowners are approaching (or have exceeded) their ten-year stint, and are likely selling their home during the spring and will likely be doing home sale renovations.

Any home sale preparation in today’s housing market should include some home sale renovations.  If you haven’t replaced the home’s systems (such as the roof or HVAC) while you lived in your home, there’s a good chance that they are approaching or have exceeded their average life expectancy.

Additionally, the décor and fixtures in your home are likely outdated.  The home sellers who make the mistake of not updating or renovating before they list inevitably face home inspection issues.  They ultimately find that the home takes longer to sell at a reduced price.

Let’s face it, remodeling can be expensive and overwhelming, especially when it’s for home sale renovations.  According to the NAR’s 2017 Remodeling Impact Report, about $340 billion was spent on remodeling projects in 2015.  Although a majority of homeowners would remodel their home themselves, thirty-five percent would prefer to move instead of remodeling their home.

The Report cited functionality and livability as the top reasons for home sale renovations.  It’s a no-brainer that home buyers prefer homes that are functional, comfortable, and sustainable.  Aesthetics is not enough for a home to be appealing to today’s home buyer, it has to fit their life style.  Additionally, home buyers want efficient systems in their new homes that can help save on utility costs.

Home sale renovations should focus on functionality and livability

What projects will get buyers who will pay top dollar into your home?  It should be no surprise that the number one interior project, listed by the 2017 Remodeling Impact Report, is a complete kitchen renovation.  Other essential interior projects include renovating bathrooms, installing new wood flooring, creating a new master suite, replacing the HVAC system, and finishing a basement or attic.

It also shouldn’t be a surprise that the Report listed replacing the roof as the top exterior project. Other exterior projects in high demand include new windows, new garage door, new siding, and installing a new front door.

If you want to add value to your home, even if it’s not for home sale renovations, check the 2018 Cost vs. Value report (costvsvalue.com).  The report can give you insight to which remodeling projects are the most popular, and estimates how much of the cost you can potentially reclaim when you sell your home.

There’s no doubt that renovating your home can be expensive.  Although the costs of home sale renovations can tempt you to cut corners, don’t.  Cutting corners on renovation projects can actually cost you more.  You may have to repair, or even re-do the project if not finished adequately.  Home buyers are savvy, and can spot low quality materials and poor workmanship.

Also, make sure to get permits when required.  If the home buyer doesn’t ask you, the home inspector will likely recommend that the home buyer check for permits.

Although many homeowners don’t mind a DIY project, many hire home improvement professionals.  When hiring home improvement professionals, check with the Maryland Home Improvement Commission (dllr.state.md.us/license/mhic) to ensure they are licensed contractors.  You should also ask for proof of their insurance, including Workman’s Comp insurance, in case there is an accident on your property while completing the project.

If you hire a contractor who will accept payment when the house sells, read your contract carefully and thoroughly. Do your due diligence.  There may be provisions in your contract that you may not be aware of, such as added costs, charging interest, and setting/lowering the sale price.

Original article is published at https://dankrell.com/blog/2018/11/17/home-sale-renovations

By Dan Krell. Copyright © 2018.

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DIY Do It Yourself

DIY
Do it Yourself projects may need permits (infographic from census.gov)

Home owners are spending more on home improvements.  “Do-it-Yourself” (DIY) projects are becoming popular again.  Besides being inspired by the increasing number of DIY home improvement shows on TV, there are numerous books, online sources and YouTube videos to show a DIYer how to take on almost any project in the home.  Being a DIY is ambitious and exciting, but for many becomes overwhelming and costly.

The notion of DIY is more than just being proud of getting your hands dirty.  For many home owners it’s really about money.  DIYers have a reputation for being thrifty, but a revealing research analysis asserts there’s more to it. Ryan H. Murphy (The Diseconomies of Do-It-Yourself; The Independent Review; Fall 2017; pp.245–255) provides ample evidence that many who engage in DIY have an anti-market bias.  Those who engage in DIY home improvements believe it is a zero or negative sum game, where there is no benefit from money spent on the home improvements.  He concludes that unless home improvement is your vocation, you’re better off sticking to your profession and hiring a (licensed) professional home improvement contractor.

One of the issues that is often noticed with DIY projects is that the result may be substandard.  The home owner may decide that although the project is not completed, it is “good enough” to save time and money.  Sometimes, the “good enough” attitude is evident by jerry-rigged components.  This can obviously be a problem when selling the home.  Home buyers have a keen eye and will be turned off by poor workmanship.  Even if the home buyer misses it, you can count on a home inspector to flag it.

Permits seem to be another issue for many DIYers. Some believe that obtaining a permit (when it’s required) is costly and time consuming.  However, inspectors are getting better at sniffing out unpermitted projects, so it is common for the DIYer to get caught before completing their improvements.

The permitting process may increase the time and cost for your DIY project, but it’s there to assure that buildings and home improvements adhere to the building and zoning codes within the city or county.  Building and zoning codes are devised to help ensure that buildings are safe.  Finishing a project without a required permit can potentially cost you more money and time down the road.

If you are required to get your unpermitted DIY project inspected after completion, don’t be surprised that you may have to make alterations and/ or corrections to your work.  If you built a structure that is deemed unsafe or even encroaches on a neighbor’s property, you may even have to demolish the project and start over.  You may even have to hire contractors to assist you.  If you are selling your home, the home buyer may require you to have your work inspected.  It can be even more costly if the project was completed during past code cycles, because, rather than send county inspectors, you may be required you to hire experts to inspect your work.

If you’re planning a DIY project and not sure if it needs a county or city permit, check with your municipality’s permitting office.  Here in Montgomery County MD, the Department of Permitting Services’ website lists additions and alterations that require permits (permittingservices.montgomerycountymd.gov).  However, if you live in one of Montgomery County’s county’s incorporated cities, your city may have different permitting requirements.

By Dan Krell
Copyright © 2018.

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Keeping New Year’s home resolution

home resolution
New Year’s home resolution (infographic from lightstream.com)

Your home is an extension of your persona. The condition of your home impacts how you feel. So, what better way to start the new year than making a New Year’s home resolution to improving your living space?

There is disagreement about the need for and impact of New Year’s resolutions.  Many believe that making a conscious and purposeful declaration to better your life can get you on the right path.  However, many mental health professionals believe that making resolutions can be a set up for failure and disappointment if your expectations are too high.

Making a New Year’s home resolution can be achievable if you make it sensible  and meaningful.  Decide on the goal and make a plan detailing how you will accomplish it.  Ask yourself how the project will improve your life.  Sensory prompts, such as a picture of a clutter free family room or a carpet sample, can help you stay focused on the goal and keep you motivated.  You don’t have to go it alone either.  Consider hiring a professional.  If you decide to go the Do-It-Yourself route, make it a bonding opportunity by enlisting friends and/or family to assist you.

Whether you hire a professional or not, you need a plan on how you will actualize your home project.  It’s good to be ambitious with your New Year’s home resolution, but don’t fall into the trap deciding the project can be completed in one or two days.  Instead, be realistic.  After all, your daily routine is probably busy, if not hectic.  Decide on how much time you can realistically devote to the project, and put in on your calendar.

Whatever your New Year’s home resolution is, start with one room.  If need be, break the room down in sections to help organize where in the room you will begin and where to go next.  Collect and organize the materials you need for the project before you begin.  The greatest distraction from achieving your resolution is a trip to the store for extra supplies.

The most likely number one New Year’s resolution for the home is decluttering.  This makes sense because we all lead busy lives and collect stuff throughout the year.  But reducing the clutter in your home doesn’t only improve its appearance, it can also make you more comfortable.  Decluttering may also give a boost to your mental health.  Consider consulting with a professional organizer to help plan the project.

A home makeover is another popular New Year’s resolution project.  Fresh and new is always in.  Whether it’s painting a room or two, or installing new flooring, giving your home a new look can improve its appearance.  A new look can also affect how we feel.  Choose your color scheme carefully, because various colors elicit different responses.  For example, a blue-grays may seem relaxing, while reds are invigorating and exciting.

Catching up on deferred maintenance seems to be the New Year’s resolution that can get overwhelming.  Despite our best intentions, we all have put off some repair or regular upkeep at one time or another.  But repairs and maintenance are not static.  Meaning that over time, issues can get worse, and neglected systems can break down.  Instead of putting off repairs and maintenance, consider hiring a licensed contractor.

Copyright© Dan Krell
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Home remodeling to stay or sell

home remodeling
Home remodeling (infographic from census.gov)

The Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University predicts expanded growth of home remodeling and renovations through most of 2018.  That’s a good indication that the economy has picked up and the many homes that fell in disrepair after the Great recession are getting the much-needed attention to extend their functionality.

It wasn’t that long ago when Kermit Baker wrote about a crisis of the declining housing stock due to extensive deferred maintenance (The Return of Substandard Housing; housingperspectives.blogspot.com; February 27, 2013).  The article written for the Joint Center for Housing Studies of Harvard University highlighted the considerable reduction of home maintenance as measured by home owner “maintenance spending” during the Great Recession.  This seemed to be a low point for the country’s housing stock.  The 28 percent decrease in maintenance spending between 2007 and 2011 essentially nullified the renovation spending during the housing boom.

Home remodeling activity
Home remodeling activity Q3-2017 (graph from jchs.harvard.edu)

The Remodeling Futures Program releases a quarterly data for Leading Indicator of Remodeling Activity (LIRA). The LIRA is a “a short-term outlook of national home improvement and repair spending to owner-occupied homes.”  The most recent data indicates that home remodeling and repair spending will escalate from the fourth quarter of 2017 into the third quarter of 2018, estimating an increase from 6.3 percent to 7.7 percent.  The significant increase in home improvement spending is attributed to a strengthening economy, home equity gains, and low home re-sale inventory.  Chris Herbert, Managing Director of the Joint Center for Housing Studies is optimistic about maintenance spending.  Herbert said:

“Recent strengthening of the US economy, tight for-sale housing inventories, and healthy home equity gains are all working to boost home improvement activity…Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance.

The current LIRA data doesn’t include the effects of recent hurricanes.  It is expected that those recent disasters will significantly increase the anticipated projected maintenance spending.

Home owners really have no choice but to spend on renovations, remodeling and repairs, especially if they are planning on selling their home.  Most home buyers want a turnkey home, where the home is fresh and new and offers minimal maintenance during the first year of ownership.  The desire for a turnkey home is probably why new home sales are at a ten-year high.  This week, the US Census Bureau (census.gov) released new home sale data that indicates a month-over-month increase of 6.2 percent, and a year-over-year increase of 18.7 percent!  To compete with other re-sales and new homes, home sellers must factor in the cost of home renovations.

There are many home owners who still can’t afford to move.  The fact that many are still priced out of the move-up market has been a major issue holding back the housing market.  This phenomenon is also responsible for continued low home re-sale inventories.  As a result, many home owners are staying in their homes much longer than anticipated.  The National Association of Realtors indicated in the Home Buyer and Seller Generational Trends Report 2017 (nar.realtor) that home buyers anticipate staying in a home about twelve years.  This is an increase of about five years compared to a decade ago.

Although many home owners still can’t move, they are deciding to do home “make overs.”  The make overs will give their homes a fresh look, that typically include new floors and paint schemes.  Additionally, kitchen and bathroom renovations modernize the home.  However, home owners needing more room, are opting to expand their homes to give them larger spaces.  Some home owners are going beyond the basics and creating different spaces by moving walls.

Regardless of your reasons for home renovations and repairs, home improvement experts recommend to create a budget and stick to it, and always hire licensed contractors.

Copyright© Dan Krell
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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.