Should We Fear the Surge in Cash-Out Refinances?

Freddie Mac recently released their Quarterly Refinance Statistics report which covers refinances through 2020. The report explains that the dollar amount of cash-out refinances was greater in 2020 than in recent years. A cash-out refinance, as defined by Investopia, is:

a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some cash.

The Freddie Mac report led to articles like the one published by The Real Deal titled, House or ATM? Cash-Out Refinances Spiked in 2020, which reports:

Americans treated their homes like ATMs last year, withdrawing $152.7 billion amid a cash-out refinancing spree not seen since before the 2008 financial crisis.

Whenever you combine the terms spiked, homes like ATMs, and financial crisis, it conjures up memories of the housing crash we experienced in 2008.

However, that comparison is invalid for three reasons:

1. Americans are sitting on much more home equity today.

Mortgage data giant Black Knight just issued information on the amount of tappable equity U.S. homeowners with a mortgage have. Tappable equity is the amount of equity available for homeowners to use and still have 20% equity in their home. Here's a graph showing the findings from their report:In 2006, directly before the crash, tappable home equity in the U.S. topped out at $4.6 trillion. Today, that number is $7.3 trillion.

As Black Knight explains:

At years end, some 46 million homeowners held a total $7.3 trillion in tappable equity, the largest amount ever recorded…That's an increase of more than $1.1 trillion (+18%) since the end of 2019, the largest percentage gain since 2013 and you guessed it the largest dollar value gain in history, to boot. All in all, it works out to roughly $158,000 on average per homeowner with tappable equity, up nearly $19,000 from the end of 2019.

2. Homeowners cashed-out a much smaller amount this time.

In 2006, Americans cashed-out a total of $321 billion. In 2020, that number was less than half, totaling $153 billion. The $321 billion made up 7% of the total tappable equity in the country in 2006. On the other hand, the $153 billion made up only 2% of the total tappable equity last year.

3. Fewer homeowners tapped their equity in 2020 than in 2006.

Freddie Mac reports that 89% of refinances in 2006 were cash-out refinances. Last year, that number was less than half at 33%. As a percentage of those who refinanced, many more Americans lowered their equity position fifteen years ago as compared to last year.

Bottom Line

Its true that many Americans liquidated a portion of the equity in their homes last year for various reasons. However, less than half of them tapped their equity compared to 2006, and they cashed-out less than one-third of that available equity. Todays cash-out refinance situation bears no resemblance to the situation that preceded the housing crash.

 

Why You Should Think About Listing Prices Like an Auctions Reserve Price

For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That figure would become the listing price of the house. Buyers would then try to determine how much less than the full price they could offer and still get the home. The asking price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than the list price. It was unthinkable to pay more than what the seller was asking.

Today is different.

The record-low supply of homes for sale coupled with very strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.

According to the Home Buyers and Sellers Generational Trends report just released by the National Association of Realtors (NAR), 45% of buyers paid full price or more.

You may need to change the way you look at the asking price of a home.

In this market, you likely cant shop for a home with the old-school mentality of refusing to pay full price or more for a house.

Because of the shortage of inventory of houses for sale, many homes are actually being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they're selling. A reserve price is the minimum amount a seller will accept as the winning bid.

When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. Its the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you're navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.

Bottom Line

Someone whos more familiar with the housing market of the past than that of today may think offering more for a home than the listing price is foolish. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions. Lets connect so you have the best advice on how to make a competitive offer on a home in our local market.

 

 

Top Video Doorbells for 2021

It’s a new year and a new article about doorbells. What can we say? Video doorbells have added a much-needed component to a range of systems, from home security to smart homes. Who doesn’t want to know who’s at the door before they so much as bother to get up and look out the peephole? No one. That’s who.

Choosing a video doorbell can be a challenging process. There are a lot of technical differences between many different models that look alarmingly similar, as well as various considerations like subscription fees and installation requirements to be aware of.

What You Need to Get Started

Video doorbells require various methods of installation and have different means of powering the sensitive electronics within. Before you choose a doorbell, it’s important to determine if the doorbell will require an existing doorbell transformer, and if so, in what voltage. Older systems could produce as little as six volts, while newer systems could produce as much as 16 volts.

Systems that don’t require an existing transformer usually run on a battery pack that’s removable and rechargeable, which makes them far more flexible options for homes that might otherwise not be able to power a video doorbell. With a self-install, it’s important that you monitor the power usage for the first few weeks to ensure that your doorbell is getting adequate power.

What About Subscriptions?

Many video doorbells will require a monthly subscription fee in order to maintain your video feeds on their cloud storage. You can usually choose from a few different packages that will allow you to retrieve data for a set amount of time and in a specific resolution. It might seem silly to pay extra for HD video of your front door now, but if that video feed helps catch a porch pirate because the images were so crystal clear that the perp was unmistakable, you’ll appreciate it.

Top Video Doorbells for 2021

This is not meant to be an exhaustive list of video doorbells for 2021, but these are some of the better ones on the market as of the writing of this blog, as determined by independent reviewers.

• Ring Video Doorbell Pro 2. It’s on the upper end pricewise for video doorbells, but that’s because this doorbell has all the whistles and… er… bells. Using a radar sensor, the Ring Video Doorbell Pro 2 can actually tell where people are on your property in order to provide the best view of both visitors and intruders. It also has one of the highest resolution cameras currently available, at 1536p HD, as well as Alexa greetings.
• Nest Hello. With a mid-to-upper price point, you should expect a lot from the Nest Hello. Fortunately, it really delivers. Although it requires a hardwired connection, the Nest Hello can recognize individual visitors using facial recognition software, as well as announce them via Google Assistant or Alexa. It also continuously records video, unlike Ring products which require a triggering event to start recording. That’s a pretty nice feature for people who need more intense monitoring, as well as those who want to keep an eye on the wildlife scampering around their yard at night.
• Maximus Answer DualCam. Although the Maximus Answer DualCam won’t be able to communicate with Alexa or Google Assistant, it can do something no other video doorbell currently does: look straight down. This may seem like a small thing, but if you have limited porch space or simply struggle with neighborhood box thieves, being able to see that your package is still safe and sound on the porch is kind of a huge benefit. The doorbell is a dual cam, however, meaning that it also will look straight out at visitors like all other doorbells do. Reviewers have complained that the speaker can be very quiet, but if you’re only using it to watch packages, that may be a smaller concern considering the smaller price point.

Ready for Help Installing That New Doorbell?

There’s no shame in calling in some help to install your video doorbell, especially as a part of a wider smart home system. But who do you call? Just pop into your HomeKeepr community to find a recommendation for smart home experts or electricians in your area with experience. They can help you choose the right doorbell for your home, as well as upgrade any transformers before installing your brand new eye on the world.

Buyer & Seller Perks in Todays Housing Market

Right now, the housing market is full of outstanding opportunities for both buyers and sellers. Whether you're thinking of buying your first home, moving up to a bigger one, or selling so you can downsize this spring, there are perks today that are powering big moves for people across the country. Here are the top two to keep on the radar this season.

The Biggest Perk for Buyers: Low Mortgage Rates

Todays most compelling buyer incentive is low mortgage interest rates. The 30-year fixed-rate is now averaging just over 3%. While that's slightly higher than the record-lows from 2020 and earlier this year, its still way lower than historic norms, making purchasing a home an ongoing perk for hopeful buyers (See graph below):This is a huge advantage for buyers and helps to make owning a home attainable for more households and there's good reason to strive for homeownership. The latest Homeowner Equity Report from CoreLogic shows how homeowners saw major gains in their net worth last year, all thanks to owning a home. Frank Martell, President and CEO of CoreLogic, explains:

Positive factors like record-low interest rates and a booming housing market encouraged many families to enter homeownership. This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake. As a result, we may see more of those currently renting start to enter the market in the near future.

Low mortgage rates are a plus for buyers right now, but experts forecast well see them continue to rise as the year goes on. If you're ready to purchase a home, its wise to get started on the process soon so you can secure todays comparatively low rate.

The Biggest Perk for Sellers: Low Inventory

Today, there are simply not enough houses on the market for the number of buyers looking to purchase them, and its creating a serious sellers market. According to Danielle Hale, Chief Economist at realtor.com:

Total active inventory continues to decline, dropping 50 percent. With buyers active in the market and sellers still slow to put homes up for sale, homes are selling quickly and the total number actively available for sale at any point in time continues to decline. (See map below):

The lack of houses for sale continues to challenge the market, and with low mortgage rates fueling buyer demand, homes are hard for buyers to find today. According to the latest Realtors Confidence Index Survey by the National Association of Realtors (NAR), the average house is now receiving 4.1 offers and is on the market for only 20 days.

Buyers are clearly eager to purchase, and because of the shortage of inventory available, they're often entering bidding wars. This is one of the factors keeping home prices strong and giving sellers leverage in the negotiation process.

Homeowners who are in a position to sell shouldn't wait to make their move. There's a light at the end of the tunnel for todays inventory shortage, so listing this spring will get your house on the market when conditions are most favorable. With low inventory and high buyer demand, homeowners can potentially earn a greater profit on their houses and sell them quickly in the fast-paced spring market.

Bottom Line

Whether you're thinking about buying or selling a home, there are major perks available in todays housing market. Lets connect today to discuss how these favorable conditions play to your advantage in our local area.

 

How to Make a Winning Offer on a Home

Todays homebuyers are faced with a strong sellers market, which means there are a lot of active buyers competing for a relatively low number of available homes. As a result, its essential to understand how to make a confident and competitive offer on your dream home. Here are five tips for success in this critical stage of the homebuying process.

1. Listen to Your Real Estate Advisor

An article from Freddie Macgives direction on making an offer on a home. From the start, it emphasizes how trusted professionals can help you stay focused on the most important things, especially at times when this process can get emotional for buyers:

Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.

A real estate professional should be the expert guide you lean on for advice when you're ready to make an offer.

2. Understand Your Finances

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. Only 44% of todays prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. Doing so make it clear to sellers you're a serious and qualified buyer, and it can give you a competitive edge in a bidding war.

3. Be Prepared to Move Quickly

According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), the average property sold today receives 3.7 offers and is on the market for just 21 days. These are both results of todays competitive market, showing how important it is to stay agile and alert in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible.

4. Make a Fair Offer

Its only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that's too low can lead sellers to doubt how serious you are as a buyer. Don't make an offer that will be tossed out as soon as its received. The expertise your agent brings to this part of the process will help you stay competitive:

Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.

5. Stay Flexible in Negotiations

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, its important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). Freddie Mac explains that there are, however, certain contingencies you don't want to forego:

Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold as-is, which means the seller wont pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you cant afford to fix.

Bottom Line

Todays competitive market makes it more important than ever to make a strong offer on a home. Lets connect to make sure you rise to the top along the way.

 

Add More Kitchen Storage With Cabinet Pull-Outs!

It’s wonderful to walk into a home that has lots of counter space, just stretching out like barren land ready for you to populate it with your favorite kitchen gadgets. But even a kitchen with limited counter space can be made so much more useful by better utilizing the thing that’s just below those counters: your lower cabinets. Lower cabinets are some of the most poorly utilized spaces in kitchens absolutely everywhere. No one wants to bend over to sort through dark and poorly organized cabinets, so eventually those spots just get kind of forgotten and ignored. This is where pull-out cabinet units can massively transform your space.

What are Pull-Out Cabinet Storage Units?

If you’re not familiar with pull-out cabinet storage units, well, welcome to a world of storage options you may have never even imagined. Pull-out cabinet storage basically turns the inside of your cabinet into pull-out bins, often resembling drawers or racks. So instead of getting down on your knees to dig around until you finally find that one pot lid you desperately need, you need only slide the drawer open, select it from the proper spot, and go on your merry way. These are a great way to increase the usability of your kitchen cabinets, improve your kitchen organization, and generally make you feel like you’ve got some cool stuff going on behind those very average closed doors. There are several different types out there, here are the main ones:

• Trash bins. Some of the original pull-out units were designed with stashing a trash can in mind. They’re still a popular choice for cabinets with no internal drawers or plumbing in the way, since many people don’t like to leave their trash exposed. Some units will hold just one can, but others have space for an additional trash can, which can be used for things like recycling.
• Internal drawers. Internal drawers are exactly what they sound like they should be. When you open the cabinet, you’re immediately confronted with drawers hidden just inside the door. This can be handy for small items, or if you’re not entirely sure what you want to stash inside your cabinet. The enclosed construction is pretty flexible and allows you to add things like dividers, should you want to toss your entire spatula collection in one, for example.
• Pull-out racks. Metal racks are often less expensive than full-on drawers, but they are really better suited for larger items like pan lids, baking pans, pots, and the like. Closely resembling dishwasher racks, pull-out racks come in a range of designs, some with more flexibility in organization than others. They’re a great option for all those awkward things that generally get tossed in the lower cabinets, but watch the height on the bins. Some are very short, which would be bad news for top-heavy items or things you intend to stack.

Sizing Cabinet Pull-Outs

Choosing the right size of pull-out can feel a little counter-intuitive. There are several inches lost to clearance and hardware when you install a unit, so there’s a lot of temptation to choose one that’s too large and try to make it fit in order to maximize your space. This is the worst possible thing you can do. It may seem like you’re losing space, but remember that you’re adding tiers and levels of organization you could have only dreamed about in the past, so really, unless your cabinet is highly unusual, it’s a net gain.

Start by measuring the clear cabinet opening, which is the space between where the opening to your cabinet starts and where the door to the cabinet swings. If your door will move completely out of the way when opened, measure to the hinges. If it won’t, angle it so it intrudes as little as possible and measure from the open side to the door. Your final cabinet insert should be about an inch more narrow than the clear cabinet opening to allow for hardware. You’ll also want to measure the depth of the cabinet from the inside of the cabinet face to the back side of the unit. The goal is for the final depth to allow for the door to shut over your pull-out unit, concealing it completely.

Need a Hand With Your Cabinets?

If you’re not ready to take the plunge into DIY cabinetry, but you’d really love some more space, you can turn to your HomeKeepr family for some help. Just ask the community for a recommendation for a handyman, cabinetry specialist, or general contractor near you. You’ll be amazed at how much more you can do in your kitchen when it’s done!

What Is the #1 Financial Benefit of Homeownership?

There are many financial and non-financial benefits of homeownership, and the greatest financial one is wealth creation. Homeownership has always been the first rung on the ladder that leads to forming household wealth. As Freddie Mac explains:

Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This wealth is built, in large part, through the creation of equity Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.

Odeta Kushi, Deputy Chief Economist at First American, also notes:

“The wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth is For the majority of households that transition into homeownership, the most recent data reinforces that housing is one of the biggest positive drivers of wealth creation.

Last week, CoreLogic released their latest Homeowner Equity Insights Report, which reveals the surge in wealth created over the last twelve months through increased home equity. The report makes five key points:

1. Roughly 38% of all homes are mortgage-free
2. The average equity gain of mortgaged homes in the last year was $26,300
3. The current average equity of mortgaged homes is greater than $200,000
4. There was a 16.9% increase in total homeowner equity
5. Total homeowner equity reached over $1.5 trillion

Heres a map that shows the equity gains by state:Increasing equity is giving homeowners the power to better manage the challenges of the pandemic, especially for those spending more time at home. In the report, Frank Nothaft, Chief Economist for CoreLogic, explains:

This equity growth has enabled many families to finance home remodeling, such as adding an office or study, further contributing to last years record level in home improvement spending.”

The financial advantage homeowners have has not gone unnoticed. In the same report, Frank Martell, President and CEO of CoreLogic, states:

This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake.

Increasing wealth benefits more than just homeowners.

Last year, the Rosen Consulting Group released a report outlining the benefits of homeownership. In that report, they explained what an increase in net worth which they call the wealth effect means to the economy:

In economic literature, the wealth effect is a term used to describe the fact that individuals have a tendency to increase their spending habits when their actual or perceived wealth increases. For homeowners, the latent savings achieved by building equity in their home and the growth in home values over time both contribute to increased net worth. Through the wealth effect, this in turn translates to households having a greater ability and willingness to spend money across a wide range of other types of goods and services that spur business activity and provide a positive multiplier effect that creates jobs and income throughout the economy.

Bottom Line

Homeownership builds wealth through equity, and this creates a positive impact for homeowners and their communities. Lets connect today if you're ready to invest in a home of your own.

 

What Is the Strongest Tailwind to Todays Recovering Economy?

Last year started off with a bang. Unemployment was under 4%, forecasters were giddy with their projections for the economy, and the residential housing market had the strongest January and February activity in over a decade.

Then came the announcement on March 11, 2020, from the World Health Organization declaring COVID-19 a worldwide pandemic. Two days later, the White House declared it a national emergency. Businesses and schools were forced to close, shelter-in-place mandates were enacted, and the economy came to a screeching halt. As a result, unemployment in this country skyrocketed to 14.9%.

A year later, the economy is recovering, and the U.S. has regained more than half of the jobs that were originally lost. However, some businesses are still closed, and many schools are still struggling to reopen. Despite the past and current challenges, there is one industry that's proven to be a tailwind helping to counter all of these headwinds to our economy. That industry is housing. Remarkably, the residential real estate market (including existing homes and new construction) has flourished over the last twelve months. Sales are up, prices are appreciating, and more new homes are being built. The housing market has been a pillar of strength in an otherwise slowly recovering economy.

How does the real estate market help the economy?

At the beginning of the pandemic, the National Association of Realtors (NAR) released a report that explained:

Real estate has been, and remains, the foundation of wealth building for the middle class and a critical link in the flow of goods, services, and income for millions of Americans. Accounting for nearly 18% of the GDP, real estate is clearly a major driver of the U.S. economy.

The report calculated the total economic impact of real estate-related industries on the economy as well as the expenditures that resulted from a single home sale. At a national level, their research revealed that a single newly constructed home had an economic impact of $88,416.

Heres how it breaks down:The map below shows the impact by state:The impact of an existing home sale is approximately $40,000.

Real estate has done more for our economic wellbeing than virtually any other industry over the last year. Its been a beacon of light during a very challenging time in our nations history.

Bottom Line

Whether you're buying a newly constructed home or one that already exists, you're making a positive economic impact in your local community and its a step toward your homeownership goals as well.

 

 

What Are Smart Locks?

Home security is important. As smart technologies continue to grow in popularity, an increasing number of homeowners are turning to higher-tech solutions to meet their home security needs. While options like smart cameras and connected doorbells are becoming much more common, not as many homeowners realize that it’s possible to upgrade their doors with smart locks as well. These locks come in a variety of designs, offering some pretty interesting options to those who want to take their home security to the next level.

What Are Smart Locks?

As the name implies, smart locks are door locks that have “smart” connected functions. This means that you can lock and unlock the locks remotely without the need to physically unlock it with a key. They often offer status monitoring as well, allowing you to see whether your doors are locked or unlocked (and in some cases, even whether the door is open or closed.) While there are fully electronic smart locks available that can only be opened remotely, the majority of consumer smart locks feature a physical keyhole and/or a numeric keypad for access as well.

For most smart locks, you can lock, unlock, and monitor them using a smartphone app or a connected hub device such as Google Home or Amazon Alexa. Remote key fobs (similar to those you see with most cars) may also be used to control the lock remotely. Some locks also incorporate biometric features, allowing you to lock or unlock the device by touching a fingerprint reader.

Smart Lock Advantages

There are a number of benefits to installing smart locks on your doors. By allowing you to unlock the door remotely instead of having to use a key, you can get into or out of the house faster when your hands are full or in emergency situations. This remote feature also comes in handy if you realize that you forgot to lock the door when leaving the house or if you need to have someone stop by and pick something up for you while you’re away.

Smart locks also give you a greater degree of control over who can and can’t access your home and when that access is granted. Many models connect with other devices such as smart doorbells or connected camera systems, letting you see who’s at the door before making the decision whether to lock or unlock. In many cases you can even include the smart locks in smart home routines that you’ve programmed on other devices, having them lock or unlock at certain times or when certain routines are run. This can improve the overall security of your home, allowing the doors to lock automatically when potential threats are detected or at times when no one should be visiting.

Installing Smart Locks

Most smart locks aren’t much more difficult to install than standard lock units, though they are likely to have more post-installation setup required. Many smart locks function as a deadbolt, though they may incorporate the doorknob and standard door lock as well. Depending on the model of smart lock being installed, additional components such as a solar panel and battery unit may be included in the installation as well. These components may be integrated into the lock mechanism, or they may be separate.

Once a smart lock is installed, it still needs to be configured to work with your app or other devices. This is usually a pretty straightforward process, similar to pairing a device with your phone via Bluetooth, though some users may experience problems during installation or integration into an existing smart home setup. After setup is complete, the locks should function without issue, using encrypted digital keys over a wireless or Bluetooth connection.

If you need help picking out the best smart lock for your home or getting it installed, HomeKeepr can get you that help. Sign up for an account today to connect with pros in your area who can help you pick the perfect lock for your home and make sure that it’s installed and set up correctly. It only takes a moment and best of all it’s free.

To Renovate or Not To Renovate Before You Sell

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you're thinking of selling this season.

1. There aren't enough homes for sale right now.

A normal market has a 6-month supply of houses for sale, but todays housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there's only a 1.9-month supply of homes available today. As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market that's moving so quickly, it makes sense to sell your house when buyers are scooping homes up as fast as they're being listed. Spending costly time and money on renovations before you sell might just mean you'll miss your key window of opportunity. While certain repairs on your house may be important, your best move right now is to work with a real estate advisor to determine which improvements are truly necessary, and which ones are not likely to be deal-breakers for buyers.

Today, many buyers are more willing to take on home improvement projects themselves in order to get the home they're after, even if it means putting in a little extra work. Home Advisor explains:

When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvement and doing on average 30% more projects.

In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.

2. Focus on getting a good return on your investment.

When planning any bigger projects to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or bathroom renovation, roof repairs, or other major work, but definitely not all of them. You might be surprised by how well your house could fair in todays sellers market. Hanley Wood states:

The 2020 Cost vs. Value report shows a predictable increase in costs for all 22 remodeling projects but a consistent dip in the perceived value of those projects at the time of home sale, as estimated by real-estate professionals in more than 100 metro areas across the U.S. This results in a slight downturn on the return on investment for nearly all projects relative to the trends we saw in last years report.

Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they wont make that money back when they sell their house. According to the 2020 State of Home Spending report from Home Advisor:

The average household spending on home services rose to $13,138, an increase over last years survey results, where homeowners who did projects spent $9,081 on average in 2019.

Before you renovate, contact a local real estate professional to see if its the best course of action. You may find out that putting your house on the market as-is will help you sell quickly, and it may result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

Were in a strong sellers market, and that means you have the leverage to sell your house on your terms. Lets connect today to determine if renovating is really the best way to spend your time and money before you sell.