Housing the Workforce

It can not be over stated how good the real estate market has been for many home owners. Home appreciation over the years has made many home sellers feeling financially secure. But how about housing the workforce?

Housing appreciation and home prices are not the only housing indicators escalating. There is an ongoing trend of decreasing housing affordability for lower and middle income families. Every year there are more lower and middle income home buyers who were edged out of the market or for that matter did not even venture to purchase a home, because home prices escalated beyond their ability to afford a mortgage.

Housing the workforce is an issue for many home buyers. Workforce housing as defined on the Montgomery County Department of Housing and Community Affairs web site (montgomerycountymd.gov) as affordable housing for families who fall between 80% and 120% of the median income for the Washington metropolitan area. In 2005, a family of four would fall into this category if the household income was between $71,400 and $107,000. Additionally, the county considers anyone who works in the county (e.g., police, firefighters, nurses, and teachers) and cannot afford housing to fall into this category as well.

It is clear that for many years there has been support for affordable housing and home ownership in general, as can be seen by the many state and county programs available, for qualifying home buyers. As a matter of fact, there has been an affordable housing conference in Montgomery County since 1991. The goal of the conference has always been to address issues related to affordable housing. The mission of the conference, as stated on their web site (affordablehousing.org), is to bring together elected officials, housing and community leaders, business professionals, activist, and others to work toward affordable housing solutions. The theme for the 2005 conference was “Work Here, Live Where?” and addressed the growing crisis of workforce housing.

The increasing number of families who earn more than the maximum to qualify for a Moderately Priced Dwelling Unit (MPDU) yet can not afford to purchase a home in the county are rising to crisis levels. The crisis has been identified by some governmental departments, yet others lag behind. Many commissioners who attended The Governor’s Commission on Housing Policy on January 2004 as given by the Maryland Department of Housing and Community Development (see minutes from January 6, 2004) concluded that workforce housing issues should be addressed.

The Maryland-National Capital Park and Planning Commission (mc-mncppc.org) has taken on the issue and generated a strategic plan as well as a web site to address the problem. Additionally, the MNCPPC created a program called “Housing Montgomery: Housing the People who make Montgomery County Work.” The program is to focus on initiatives that function to increase the supply and affordability of housing, improve data tracking, and expand community outreach.

The program development many initiatives, which include the development of a workforce information packet, discussion of employer assisted housing, discussion park workforce housing, discussion of Montgomery County Department of Parks and Planning employer assisted housing, and to expedite approvals for affordable housing.

Workforce housing will continue to be a concern for many years to come as housing costs continue to escalate. Hopefully, community leaders will continue to develop an agenda to assist Montgomery County’s workforce to live in the county

By Dan Krell
Copyright © 2006

Surfing for Homes

Before you were surfing for homes on computers, brokers kept track of their listings by card catalogues. As a matter of fact, these old cards were displayed at the old Rockville office of Metropolitan Regional Information Systems, Inc. (MRIS), (the old multiple list service).

During that time before the MLS, brokers were not required to share information and listings with other brokers. This proprietary system allowed the broker to maintain the buyers that came to seek information on homes for sale.

Looking back, home buying was not complicated. Home buyers would go to the local real estate office and see what homes were available. Homes for sale and other information were limited to what your Realtor knew. Most likely, the only homes your Realtor showed you were homes that were listed by that real estate firm. Needless to say, the real estate industry has come a long way since then.

Since the advent of the multiple list service, technology has made a huge impact on the real estate industry. Presently, surfing for homes has never been easier. Home buyers can look for homes on the internet and get listings via email and cell phones. As a matter of fact, if you go onto the internet, you will have hundreds of Realtors (including myself) as well as Real Estate Companies offer to send you home listings.

With all of this information flying around, what’s the most reliable and accurate information available?

The most reliable and accurate information available for Realtor listed homes is through MRIS. Unfortunately, if you are not a real estate professional, you can not have a membership to peruse the database. The good news is, however, that all the other databases and online searches of Realtor listed homes are fed by the MRIS. The quality of the information depends on the website’s ability to update their information from MRIS and how it disseminated.

There are a few popular internet searches that offer free searching without offering information. If you choose additional information or services from these sites, you must fill out an information page giving at least a name and email address. Although you get to search on your own, the sites do promote realtors and other real estate professionals.

Older style internet home search services forward your information to a local Realtor who will send you the information you seek. All these sites are useful and you can get the information you desire as long as your search criteria is specific enough. Unfortunately, if your search criteria are too specific, you will miss seeing homes that you may actually consider buying.

There are many alternative sites tthat allow surfing for homes too (such as craigslist.org). These sites allow specifc posts by brokers and FSBO’s.

Having all the technology and information available online is useful, however there are drawbacks. The main drawback is that most of the information is limited and you must contact someone for additional information. No matter what manner of internet home searching you choose, you will be more informed than not having done the search at all.

By Dan Krell
Copyright © 2016

Remodel instead of Move?

Moving up has been a right of passage for families for years. Families have been moving up for one reason or another, usually because of the need for space or just to move to a new neighborhood. However, spiraling home prices made many to rethink the usual move up, and instead make improvements on their homes. Rather than buying the four bedroom colonial they need due to a growing family, homeowners are adding rooms and enlarging the spaces they already inhabit. They’re thinking remodel instead of moving.

If you are unsure of making improvements or selling your home, there are some factors to consider. RemodelorMove.com (www.remodelormove.com) lists the top reasons for remodeling instead of moving includes: you like remodeling; you like your home floor plan; you like your neighbors; you like your yard; you have a great location; you will get exactly what you want; and you feel that it can enhance the value of your home. If you’re trying to decide whether remodel or move, you may find some of the reasons to remodel resonate.

If you decide to remodel rather than move, there are some considerations. According to RemodelorMove.com you should consider how long you are going to be in your home, the costs involved, and the timing of the remodeling before you move.

If you are planning to stay in your home less than a year, you should consider the actual cost of the improvements against the return you may get on your upcoming sale. However, if you plan to be in your home for a few more years or longer consider the factors of personal pleasure and comfort.

If you are concerned with cost vs. value, a great resource that every turns to for their annual report is Remodeling Magazine (remodeling.hw.net). According to Remodeling Magazine, return on investment depends on the value of the house itself, the value of similar homes in the immediate area, and the rate property values are changing in the surrounding neighborhoods. Some projects will recoup more than 100% of the original investment, however overall in 2004 the return of investment was 80.3%.

The following are the top improvements listed listed in this year’s Remodeling Magazine annual report in order of return on investment: minor kitchen remodeling -92.9%; siding replacement-92.8%; midrange bathroom remodeling- 90.1%; deck addition- 86.7%; upscale bathroom remodeling- 85.6%; and window replacement- 84.5%. You can view the rest of the 2004 report on the website.

Both selling and remodeling can be large propositions that can bring a lot of joy. There are many resources available to help make your decision. But you should verify the information you get, especially from the internet. Additionally, you should consult a local contractor and a Realtor to assist with costs of improvements and neighborhood home values.

By Dan Krell © 2005.

Home Selling Tips

Because not all listed homes sell, you should be strategizing how to make the most of your sale. What to do? Here are some home selling tips .

Think about the basics that go into a successful home sale. The first is to price the home according to the comparables in the neighborhood. The second is to consider the condition of the home. The third is to have a marketing plan. And lastly, you should have a close working relationship with your Realtor.

Home selling tips

Of course your home should be priced according to the comparables in the neighborhood, and progress should be gauged with the other homes on the market in the neighborhood. That means besides pricing according to the homes that are comparable, your Realtor should expect results within the parameters based on those sales also. Regardless of what you hear, the seller sets the selling price. Your Realtor is only an advisor providing you the data and opinion.

Sale price

Comparing your home to similar homes that sold is critical in deciding a sale price. Comparables are homes that match your home in style and size. If you have a three bedroom rambler, you should compare your home to other three bedroom ramblers in then neighborhood.  Typically, comparables are restricted within a subdivision or within about 0.5 mile to 1 mile. And sales not older than six months (unless there is a lack of home sales).

Home condition

Why is your home’s condition important when deciding a sale price? If your home has deferred maintenance or hasn’t been updated for twenty years, it’s not going to get the same price as the renovated similar home across the street. Be honest with yourself about the home’s condition.  If your home is not in move-in condition, think about the cost of renovating in the price along with market conditions.  If it’s a buyer’s market, you may have to consider a lower price or the home will languish waiting for a buyer.  If it’s a seller’s market, there are more home buyers willing to buy a home with the intention of renovating it.

Marketing plan

You need a roadmap to success. If your Realtor has not yet presented you with a marketing plan, ask for one. Your Realtor should have a plan of action to sell your home. Putting a sign in front of your home and entering the information in the MLS is not typically enough sell a home. Market conditions frequently change, and your Realtor should have a concrete plan to sell your home. The plan should include not only how the home will be marketed, but how the agent will take you from contract to closing.

Your listing agent

The final aspect that is important in selling your home is the relationship between you and your Realtor. Besides having confidence in your Realtor, you should feel comfortable being honest (for good and bad).  It’s not a good sign if your Realtor is often defensive when you express concerns and needs. Your Realtor, on the other hand, should also be honest, as well as timely with information concerning your home. Besides communicating the activity of the potential home buyers, they should also keep you up to date with the neighborhood market keeping an eye on the other homes on the market.

How will you market your home and what will you do if the market changes? When you are interviewing Realtors to sell your home ask about their marketing plan. Ask about a home pricing strategy.  Ask how your home’s condition affects the price.  Ask how the agent communicates and what you should expect from them.

Finding a real estate bargain

Many first-time home buyers and investors whom I encounter typically ask about foreclosures and handyman-specials. Essentially they are looking to buy a real estate bargain. When is the best time to by a real estate bargain?

A foreclosure is a home that has been repossessed by the holder of the mortgage note, usually a bank. The process of foreclosure varies depending in which state the foreclosed home exists and what type of mortgage document exists on the home. To make a long story short, the home is either auctioned to the highest bidder, or the home is taken over by the bank to be sold on the market. The foreclosed homes that are put on the market are also called REO, which stands for real estate owned by bank.

Foreclosed homes can also be bought at auction. Auctions are usually conducted at the courthouse by a local auctioneer. These types of auctions are also known as a trustee’s sale or substitute trustee’s sale. If you are interested in attending an auction, you can find the advertisements for the auctions in the local papers’ classified section. To bid on the home, you must have the minimum deposit in the form of certified funds. The minimum deposit is usually posted in the advertisement. If you are buying a foreclosed home at auction, you are essentially buying it “as-is” without the ability to do a home inspection prior to close.

When the bank has taken title to a foreclosed home, a Realtor is usually hired to list the home on the Multiple List Service (MLS). In this scenario, you have an opportunity to view the home before you decide to submit your offer. The home is generally sold “as-is.” Hopefully, you will have a Realtor of your own to advise you of the value and general condition of the home.

Generally, the process of buying a foreclosed property can be bumpy due to foreclosure process. Sometimes the previous owner will damage the home (sometimes on purpose), or take valuable materials out of the home such as copper or other fixtures. Additionally, the home is locked up for months, often without utilities. Mold growth is typical due to water penetration, and/or other structural and environmental concerns.

A handyman special is a term that is often used when a home is sold by the owner. The home can have deferred maintenance or other damage.  The home could be a rental property in need of “TLC.” Many times, a handyman special will require mostly a great deal of cosmetic work, such as painting, carpet, etc. Sometimes, there are some structural concerns, such as (but not limited to) replacing a roof, or fixing walls.

Overall, when considering a real estate bargain whether you will have to determine if the home is worth the price you want to pay. In addition to the acquisition cost, you will have to consider the total cost to repair the home, as well as the costs to make updates. It is also important to look at the recent neighborhood comparables to see if the price or adjusted price (price plus costs for repairs) is in line.

If the market is depressed or a buyers’ market, there may be some choices in a real estate bargain.  However,  if the market favors the seller, there are fewer bargains. In a sellers’ market, distressed properties can sell for close to market value.

by Dan Krell © 2005