The national real estate news was widely negative in 2007 with foreclosures rampant several cities and the mortgage industry in turmoil. But the saying “all real estate is local” has never been more true, especially when studying how the Main Line market “suffered” in 2007. The Main Line did see reductions in several key categories, but overall the Main Line was spared much of the pain felt throughout the country. The average sales price in 2007 for condos, townhomes, and single family homes in the Main Line townships of Lower Merion, Radnor, Tredyffrin, and Easttown was $642,516. The average in 2006 was $673,612, so the year-to-year decrease was 4.7%. After 15-20% increases every year from 2000-2005 the Main Line was due for a pricing correction like everywhere else in the country, but an under 5% decrease is considered well below average. The total sales volume decreased only 6.9%, from $1,255,614,036 in 2006 to $1,169,380,716 in 2007.
The average days on the market (DOM) increased from 57 days in 2006 to 66 days in 2007; nine days longer on the market is much less than many other parts of the country.
The average number of sold properties decreased only 2.3%, from 1,864 in 2006 to 1,820 in 2007.
To view detailed monthly statistics, please click on the icons below (top for 2007, bottom for 2006). Use your “back” button to return to this blog.
Cost vs. Value: What Upgrades Are Worth the Money on the Main Line?
The National Association of Realtors (NAR) has just released the findings of their annual Cost vs. Value home improvements study. The report is listed in the December issue of REALTOR Magazine.
The results show that rehabbers should focus on exterior upgrades to thier homes. REALTORS® in 65 markets were given construction specs and costs on 29 upscale and midrange projects and asked to estimate the percentage return at resale.
In the Main Line Philadelphia market, here are the upgrades that found the HIGHEST percentage of cost recouped after the sale:
Upscale Siding Replacement
Job Cost: $13,387 ~ Resale Value: $12,752 ~ Cost recouped: 95.3%
Deck Addition
Job Cost: $11,099 ~ Resale Value: $10,026 ~ Cost recouped: 90.3%
Window Replacement (wood)
Job Cost: $12,497 ~ Resale Value: $10,535 ~ Cost recouped: 84.3%
Window Replacement (vinyl)
Job Cost: $14,394 ~ Resale Value: $11,152 ~ Cost recouped: 77.5%
The upgrades that found the LOWEST percentage of cost recouped after the sale:
Bathroom
Job Cost: $53,598 ~ Resale Value: $32,304 ~ Cost recouped: 60.3%
Upscale Garage
Job Cost: $86,245 ~ Resale Value: $48,960 ~ Cost recouped: 58.8%
Upscale Roof Replacement
Job Cost: $37,613 ~ Resale Value: $21,838 ~ Cost recouped: 58.1%
Sunroom
Job Cost: $72,728 ~ Resale Value: $41,290 ~ Cost recouped: 56.8%
Back-up Power Generator
Job Cost: $14,043 ~ Resale Value: $7,602 ~ Cost recouped: 54.1%
So why bother investing in upgrades to your home right before putting the house on the market if you won’t get every dollar back at the settlement table? In our current buyers market sellers should seek to remove any possible objections that buyers could have when walking through their houses to consider a purchase. Fewer buyer objections means less buyers that will need to see your house before writing an agreement of sale, which will mean less days on the market. In the Main Line marketplace a serious seller will typically reduce their asking by 5% after approximately 30 days on the market. 5% is considered enough of a reduction in price to generate new buyer interest in the house. In this market where the average sales price is $700,000, 5% means a reduction of $35,000. Making a few upgrades before listing your house certainly makes sense when examined in this light. The key is to focus on upgrades that buyers see value in. The complete REALTOR Magazine Cost vs. Value article can be found here.
Google Earth brings scouting out potential neighborhoods to a whole new level!
My wife and I used Google Earth so often during our own home search last Summer that I don’t know what we would have done without it. Sure, other companies offer satellite imagery, but none are as cool looking, easy to use, and FREE like Google’s version
Static mapping points, especially those found in our local MLS, are often inaccurate in terms of the location on a street. Before using Google I actually discounted some listings thinking that the houses were right on busy streets, only to find out that the house was at the end of the cul-de-sac. Google Earth allows you to zoom in on the satellite image to see what the neighborhood looks like. You can see the nearby playgrounds, schools, businesses, concentration of houses, yards sizes, and more. The only limitation I’ve found is that you can’t tell which side of the street the house is on. That can come in handy when trying to determine if railroad tracks are beyond the back yard. You can also type in multiple addresses to see how far apart they are.
Just for fun click on the Eiffel Tower, Grand Canyon, or New York City links and watch as you “fly” from your neighborhood to each sightseeing place you like. Many cities are being drawn in 3D format which looks amazing.
Here’s the link to download Google earth for free:
http://earth.google.com/
I wanted to write about the importance of “staging” when listing a house and since I just sold my own house I’d thought a real-life example would be a good way to explain it. Staging simply refers to the steps sellers (or hired staging specialists) take to make a house “show ready”. When a family is living in a house it’s a home, but when the house is placed in the local Multiple Listing Service (MLS) for the world to see it then becomes a product. Good staging helps your product look its best and in this competitive market staging is oftentimes the difference between a house selling quickly or languishing on the market for months.
We were living in a townhouse and starting four years ago when we bought it every upgrade that was made was considerate of resale potential. We painted most of the walls but tried to choose tasteful colors that future potential buyers would not be offended by. In my opinion, tasteful upgrades to your kitchen and baths is almost always money well spent. We added granite countertops and sink tops to the kitchen and baths. Not all the upgrades were expensive or large projects: we installed under mount and recessed listings in the kitchen; we replaced all the rusted brass door hardware with more modern brushed nickel. All of this was done in the year before we started looking for a house so that we wouldn’t be rushed into getting the house ready for the market when we ultimately found the house we liked.
Recently we found a house we loved in Villanova and the staging plan was quickly put into action to get the house for the marketplace. One of the most important staging steps to take is to get rid of all the junk you don’t need. We rented a 15×10 Public Storage unit, rented a truck for the day and put into storage ANYTHING in the house we wouldn’t need for the next two months. Most of the items were rarely-used things in the basement and everything had to go. We have two small children so it was a balancing act to decide what old toys went and what had to stay. De-cluttering is a term to remember; try to simplify the amount of decorations, knick knacks, and non-essential items in each room. All of our off-season clothing was removed from the closets so they were only half-full (creating space is a key staging goal). Removing personal photos is also very useful in helping potential buyers imagining living in your house.
The next step is cleaning. A house on the market should be immaculate. We cleaned the inside and outside of all the windows in the house. We tried three different grout cleaners before we found one that really worked well (try WEP Grout Cleaner with Whitener). We hired a painter to touch up woodwork and paint a few walls that were nicked up over time. Finally, professional cleaners made the house shine right before listing the house.
My wife thought the $40 exterior bench I bought for the front door entrance was a waste of money; dido on buying a brand new stainless steel refrigerator. I assured her that these items would help the house sell more quickly. Many buyers, especially families with both parents who work, want to do as little as possible when buying a house. Also, buyers always estimate a cost for upgrades costing twice as much as they really do.
After photographing the house on a sunny day and adding as many photos to the MLS listing as was allowed, the house was “live” for the world to see at Noon last Wednesday. An hour later an appointment to show the house was made and by 6pm we had a written offer, almost at full price. My wife warned me not to say “I told you so”.
Sellers ask me if they’ll get the money back that they spend in upgrades. I explain to them that it depends on what they do and the quality of the work. The money spent in upgrades doesn’t always directly add the value of the house, but it oftentimes is the difference in the house being sold in one week or three months. Over time, the price will have to be reduced in order for the house to sell which is why the upgrade costs are worth doing, especially in this market.
Of course, accurate pricing is just as critical to selling a house as staging. Overpriced houses will sit in this buyers market no matter how much they sparkle.
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