6 tips to weigh the best resale home improvements

NEW YORK – Sept. 24, 2013 – Homeowners are opening their wallets. A rebound in the housing market has made them more willing to invest in renovations that could boost the value of their homes even more in a rising market.

Spending on home remodeling has picked up over the past 18 months and is expected to rise nearly 20 percent to $151 billion by the fourth quarter, according to a recent report by the Joint Center for Housing Studies at Harvard University.

Many homeowners decide to make upgrades with the idea that the bigger kitchen or finished basement will make their home more enjoyable. But those looking to sell should know that not all home improvement projects boost the value of a home.

Here are six tips when considering investing in home improvement projects:

1. Consider all buyers
The classic example here is installing a swimming pool.

A pool could make your home a tougher sell and it’s unlikely you will recover your expenses, says Richard Borges, president of the Appraisal Institute, a professional association of real estate appraisers.

It may be a deal-killer for buyers who might not want to take on maintenance costs or safety risks for small children. “It’s not going to contribute a full measure of its cost of installation because its utility is so limited,” Borges says.

The principle holds true for other large projects that can alter the structure of the property, such as adding a second garage. In some neighborhoods, they may be a common feature that becomes a selling point. But if it’s not common, it could discourage buyers who don’t have a need for it.

2. Don’t ‘overimprove’
Some home improvements can help lift a home’s resale value, especially updates to features like cabinets and appliances that are clearly dated.

The key is to select finishes and appliances that don’t go well beyond what a buyer might find in similarly priced homes in the area. The term appraisers have for that is “overimprovement.”

Consider a homeowner in a neighborhood with modest homes who splurges on pricey countertop finishes like quartz or marble. They’re not likely to recoup the cost when appraisers look at recent sales of comparable homes that may not have such lavishly appointed kitchens.

This applies to everything from lighting to flooring and bathroom fixtures.

3. Consider risks of expanding footprint
One of the home improvement projects that’s least likely to produce a return on the investment is a room addition that expands the size of a home beyond its original floor plan, says Borges.

Projects that require tearing down an exterior wall often involve moving doors, windows and other features, which can drive the costs higher than, say, converting an attic into a bedroom, which uses existing space in the home.

The more expensive the project, the harder it can be to recover one’s costs.

Also, making major changes to the original structure, even when permitted by the city, runs other risks.

“When you become the oddball, the only home in the neighborhood with four bedrooms, probably the fourth bedroom is not going to be that desirable,” Borges says.

4. Consider cost-to-value
One way to gauge whether a home improvement project is worthwhile is to estimate how much of what you spend will be recovered at resale.

For example, if you spend a $1,000 on siding, and it only adds $500 to the resale value of your home, that upgrade is giving you a 50 percent return on your investment.

Remodeling magazine’s latest cost-value-study, which is based on surveys of real estate agents, can help provide a ballpark reference. You can find it here.

That said, when home prices are rising fast enough, like during the last housing boom, it’s easier to recover costs spent on home improvements, regardless of the upgrade. The alternative scenario also holds true.

5. Prioritize repairs and curb appeal
Making the master bedroom bigger or converting a downstairs closet into a half-bath might seem like good investments, but not if you need to upgrade your roof or fix window seals.

Those fixes may not be aesthetic upgrades, but often make a home easier to sell.

Replacing your front door might cost you $1,500, but it’s the type of upgrade that can make a home attractive to buyers, says Sal Alfano, editorial director of Remodeling magazine.

The magazine says replacing the front entry with a 20-gauge steel door is the upgrade from which homeowners can expect to recoup the most money among renovations that cost less than $5,000. The magazine estimates a recovery of 85.6 percent of the cost.

6. Consult an expert
Before moving forward on a home improvement project, consult with a real estate agent or an appraiser who knows your market.

They should be able to gauge how the upgrade could affect the sales price of your home. That can help you determine how much of your investment you’re likely to recoup.

Almost all appraisers are independent and set their own fees. A consultation could cost between $500 and $1,000.

Real estate agents might be willing to offer their assessment for free, perhaps with the understanding that they might earn your business when it comes time to sell.

http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=297366

Shell Museum closing for updates at end of month

September 13, 2013

The Bailey-Matthews Shell Museum will be closed to the public beginning Saturday, Sept. 21 through Sunday, Oct. 6.

It will reopen at 10 a.m. on Monday, Oct. 7.

During this time, the museum is installing hurricane glass in the windows above the Great Hall and Collections area to protect shell collections and exhibits.

The lobby is also being renovated to make it more welcoming and enhance the experience for visitors.

The museum looks forward to seeing all of its island friends and visitors when it reopens.

Once construction is completed, stop by the museum to see the new changes. For more information about the museum and hours. please visit the shellmuseum.org or call 395-2233.

http://www.captivasanibel.com/page/content.detail/id/522361/Shell-Museum-closing-for-updates-at-end-of-month.html?nav=5051

Captiva beach renourishment to begin in October

Locals expected to pay larger share of project

September 17, 2013

By MCKENZIE CASSIDY

Heavy machinery is being mobilized on the northern end of Captiva Island for the start of the beach renourishment project.

The bid for the project was awarded to Great Lakes Dredge and Dock Company, LLC, in August, for $19.5 million, which includes a replenishment of 800,000 cubic yards of sand along six miles of shoreline between Redfish Pass and Blind Pass, as well as the rehabilitation of dunes in northern Sanibel.

Kathy Rooker, administrator for the Captiva Erosion Prevent District (CEPD), updated the community about the project during a meeting of the Captiva Community Panel on Tuesday.

Engineers have been taking pictures of local structures to record their conditions before the project begins, and Rooker said the precondition survey should be finished by the end of the week.

In the meantime, bulldozers and other machinery are mobilizing at the Alison Hagerup Beach Park the northernmost public beach access point on Captiva Island which is closed to the public. It will remain closed until further notice. On Thursday morning, locals living near Jensen's curve will be able to see ships on the horizon as they begin to drop the submerged pipe.

Seismographs will also be installed on the beach to measure vibrations caused by the machinery.

"We're very much on schedule," said Rooker. "We expect to put sand on the beach Oct. 1, if the weather and equipment cooperates. We hope to be off Captiva by the week of Thanksgiving."

Dredgers will leave the area after Thanksgiving, she said, and begin work on Sanibel after the holiday. One of the primary concerns for CEPD was ensuring that the project didn't disrupt the island season.

"We really hope we've done a good job to stay out in the high season," she said.

Members of the Captiva Community Panel were concerned about the costs of renourishment shouldered by local property owners. The U.S. Army Corps of Engineer rescinded their agreement with CEPD in July.

The project is currently funded with $4.6 million from the state and $6.1 million from the Lee County Commission, but homeowners may need to front an estimated $9 million unless additional funding can be acquired from the Federal Emergency Management Agency (FEMA).

The district also has the option of requesting more from the Lee County Commission or transferring $1 million from its reserves to ease the local burden.

CEPD Commissioner Mike Mullins said property owners will contribute roughly 50 percent more than they did in the 2005 dredging, unless another funding source is found.

"I don't think this is quite the same as last time," he said. "I expect everyone will pay more than last time."

Rooker said property owners received a range of costs associated with beach renourishment, and that the current price is within the middle of that range.

"If we do get some FEMA help, that will help us a little more," she said.

The CEPD is project updates on their website, mycepd.com, and brochures are being printed for area businesses to keep people informed.

http://www.captivasanibel.com/page/content.detail/id/522368/Captiva-beach-renourishment-to-begin-in-October.html?nav=5051

New HUD rule could make more eligible for mortgages

WASHINGTON – Sept. 16, 2013 – Federal housing authorities want to make it easier for people who lost their homes due to bankruptcy or foreclosure as a result of the economic downturn five years ago to qualify for a new mortgage – sooner rather than later.

The Department of Housing and Urban Development (HUD) last month changed its rule requiring a three-year waiting period for people who have lost a home due to foreclosure or bankruptcy, opening the door for them to buy another home in only one year as long as they have fixed whatever financial problem caused them to lose the previous home.

“Three years can be a long time for a family to wait for a loan, and putting money into a rental instead of an investment can result in a loss,” said Don Frommeyer, president of the National Association of Mortgage Brokers in Plano, Texas.

“This is an effort to help boost the housing industry, which is a major part of jump-starting the economy.”

At a time when interest rates are ticking up and new mortgage applications are on the decline, the rule change could make more people eligible for mortgage loans, even if their credit was ruined during the Great Recession.

But the Achilles’ heel of the rule change is that banks and other mortgage lenders are not required to abide by it.

The new rule, published Aug. 15, gives financial institutions the option of reducing the waiting time to one year for troubled borrowers. But many are likely to stick to the old three-year waiting period.

“The reality of the new HUD rule is it won’t change anything,” said Tom Hosack, president and CEO of Northwood Realty in Franklin Park. “The lenders actually have more stringent internal requirements than HUD does anyway. Lenders still do not feel comfortable lending to people one year out of bankruptcy and are still requiring them to wait longer.”

He said at the height of the housing boom lenders were more impressed with the value of the collateral than the creditworthiness of the borrower. Institutions had the idea that even if the borrower defaulted, the bank could always get its money back from the sale of the property, which at that time seemed headed nowhere but up.

Now with memories of the housing crash still fresh, lenders have gone back to closely scrutinizing the credit history of borrowers to determine their likelihood of repaying loans.

“Banks are being a little too overcautious,” Mr. Hosack said. “But it is the byproduct of them being too liberal for too long. … People who had a bankruptcy or foreclosure are more likely to have a second one, and banks want to make sure people have their act together before making a loan to them.”

Mike Blehar, principal at Green Tree-based financial services company Fort Pitt Capital Group, said he often works with clients who are either buying a new home or refinancing an existing one, which means he deals with several banks.

Even for affluent clients, buying and refinancing real estate is not always a smooth process.

“Every so often, it is a real struggle for some of them to qualify for a refinance,” he said, adding that one case seemed particularly puzzling.

The client, who is an executive for a major corporation in Pittsburgh, was refinancing his home and had to provide a mountain of documentation to show he was a qualified borrower.

What was striking about the case, Mr. Blehar said, is that on the day of the closing, the mortgage company called his client’s office to verify he was still employed even though they had already checked two weeks earlier.

“These mortgage companies are so worried about getting burned again by making bad loans they will go to extremes to make sure they have a qualified borrower,” he said.

An improving economy could bring more people back into the real estate market although, for now, it seems rising interest rates have caused a slowdown.

The Mortgage Bankers Association reported that mortgage applications fell last week 13.5 percent compared to the previous week, marking the eighth drop in 10 weeks. Since the first week of May, the average rate on a 30-year fixed mortgage has jumped from 3.35 percent to around 4.6 percent.

The decline in applications has led several major banks such as JPMorgan, Bank of America and Citigroup to scale back on their mortgage operations, causing thousands of employees to be laid off.

Wells Fargo & Co., the largest U.S. mortgage lender, announced it expects to make 30 percent fewer home loans this quarter due to rising interest rates.

Meanwhile, the Federal Housing Administration will green-light mortgage applications for people who lost their jobs, filed bankruptcy or saw their income reduced by 20 percent or more for a period of at least six months, as along as they can show that it occurred as a result of the recent recession.

The problem must be fixed, and the borrower must show a record of making at least 12 months of on-time payments on all their credit accounts.

They also will need to complete a housing counseling course and meet all other HUD requirements.

Mr. Frommeyer said every lender maintains what is known as an “overlay,” which is its own lending requirement, used in coordination with FHA’s requirements. For example, he said, FHA actually has no minimum credit score requirements for borrowers, while each financial institution has its own minimum score ranging from 680 to 580.

“This is an effort to lower the standards for mortgage loans, but there is no guarantee banks will participate,” Mr. Frommeyer said.

“Let’s face it. The economy is not where it really needs to be yet. This is a way to try to help borrowers who couldn’t make payments. But it’s not an easy fix.”

http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=297034

Floridians support endangered species protections

GAINESVILLE, Fla. – Sept. 17, 2013 – Floridians want to protect endangered species, even if it means fines for violators or restrictions on personal freedoms, a new University of Florida (UF) Institute of Food and Agricultural Sciences survey finds.

In conjunction with the 40th anniversary of the Endangered Species Act, an online survey of 499 Floridians last month found that respondents ranked it relatively low in importance, ranking it 11th out of 15 public issues, and well behind topics such as the economy, health care and food safety.

But respondents solidly supported legal protection for endangered species of all kinds, including fines, restrictions on residential and commercial development, and buying habitat for endangered species to ensure their survival.

Florida is home to 47 endangered animal species, such as the Florida panther and the West Indian manatee, and another 44 plant species, including the Key tree-cactus and pondberry.

“What we found, generally, is that people were most willing to avoid harmful activities such as avoiding buying invasive species or driving slower, than they were to do more active things, like supporting or belonging to an environmental group,” says Tracy Irani, director of the UF/IFAS Center for Public Issues Education, or PIE Center, the research group that led the study.

For instance, 55 percent of survey respondents were “very likely” to avoid harmful activities, such as not releasing pets into the wild or taking care to not degrade endangered species’ habitat; but only 23 percent would be similarly disposed to engage in environmental civic behavior, such as joining a conservation organization.

Other findings

• 66 percent of respondents felt the Endangered Species Act should be strengthened.

• 78 percent agreed or strongly agreed that “the use and development of land should be restricted to protect endangered species.”

• Respondents were more likely to consider plants, fish and mammals worthy of conservation over microorganisms, invertebrates and reptiles.

• Roughly twice as many respondents agreed or strongly agreed that agricultural and industrial chemicals and pollution pose a threat to endangered species compared to those who cited legal fishing or hunting.

• Florida residents considered themselves only slightly or fairly knowledgeable about issues affecting endangered species, but they’re interested: 85 percent said they’re likely or very likely to pay attention to news stories dealing with issues related to endangered species.

“Florida is home to so many unique species of plants and animals, and it is incumbent upon us to do everything we can to protect them,” says Jack Payne, UF’s senior vice president for agriculture and natural resources.

http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=297078

Study: Vacation rental performance remains strong

John Petel can help you buy or sell a vacation home in SW Florida! 239-590-4690

AUSTIN, Texas – Sept. 5, 2013 – HomeAway Inc., an online marketplace for vacation rentals, says it saw strong performance for its vacation rental owners during the summer season.

The company’s summer report finds the average occupancy rate for vacation rentals at 77 percent for vacation rental owners who consider summer their peak season. These owners reported an average weekly rental rate of $1,778 ($254 per night) – a 19 percent increase over the same time period in 2012.

Comparatively, Smith Travel Research, Inc. reports the average occupancy rate for U.S. hotels for the summer season was approximately 70 percent – a two percent year-to-year rise – with an average room rate increase of 3 percent.

For the second consecutive year, nearly nine in 10 vacation rental owners (86 percent) report their summer business was about the same or better than last summer. And 95 percent of vacation rental owners said they did not lower their rental rates from last summer – 23 percent increased their rental rates.

One of the top concerns of vacation homeowners prior to opening their homes to travelers includes concern of losing money on the endeavor (23 percent). But the survey found that more than half (51 percent) of the owners who have a mortgage on their vacation rental home were able to cover at least three quarters of their mortgage payment – an increase of six percent year-over-year. Additionally, nearly three-quarters (70 percent) cover at least half of their mortgage payment – an increase of six percent over last year.

Prior to renting, vacation rental owners (35 percent) also worry about managing the home as a rental along with a full-time job or family obligations. The survey found that vacation rental owners spend an average of 8.4 hours per week marketing and managing their vacation rental properties.

“If the owner optimizes the time and effort put into managing their vacation rental, the return on investment is substantial,” says Brian Sharples, co-founder and chief executive officer of HomeAway.

Thirty-nine percent of owners originally purchased their vacation home for personal use. Nearly two-thirds of owners (66 percent) spent up to 28 days in their vacation rental in the past twelve months, and 76 percent cite personal or work reasons for not being able to spend more time in their vacation rental – not guest bookings.

Another 15 percent of owners classify their vacation rental as a future retirement home. The average age in which owners purchased their vacation homes was 48 years old – six years younger than owners in 2012 – and the average age in which owners began renting their vacation homes was 50 years old – also six years less than owners in 2012.

Locations

Traveler demand to fill vacation homes is rising in the Florida Panhandle, with Fort Walton Beach, Navarre Beach and Pensacola/Pensacola Beach leading the country as a vacation destination.

Compared to this same time last year, the growth of inquiries and new vacation rental listings in the Florida Panhandle is rivaled by its neighbors Captiva & Sanibel Island and North Carolina’s Outer Banks region, which shows strong performance from Duck, Kitty Hawk, Corolla, and Kill Devil Hills.

Ski spots Keystone and Durango, Colo., are also peaking, according to Home Away, along with Park City, Utah. Sunriver, Ore., a dark horse in burgeoning vacation rental markets, saw a 77 percent growth in vacation rental listings and traveler demand.

Markets with largest increase in new vacation rental listings

• Keystone, Colo.
• Sebago Lake, Maine
• Outer Banks, N.C.
• Sunriver, Ore.
• Port Aransas, Texas
• Captiva Island & Sanibel Island, Fla.
• Florida Panhandle
• Austin, Texas
• Savannah, Ga.
• Orlando, Fla.

Markets with largest increase in traveler demand

• Sunriver, Ore
• Park City, Utah
• Bryson City, N.C.
• Durango, Colo.
• Isle of Palms, S.C.
• Florida Panhandle
• Gulf Shores & Orange Beach, Ala.
• Clearwater, Fla.
• Newport Beach & Balboa Island, Calif.
• Captiva Island & Sanibel Island, Fla.

Source: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=296512

30-year mortgage rate steady at 4.57%

WASHINGTON – Sept. 13, 2013 – Average U.S. rates on fixed mortgages held steady this week, hovering near two-year highs. But rates could change quickly next week when the Federal Reserve addresses its bond purchase program.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan was unchanged from last week at 4.57 percent, just below the two-year high of 4.58 percent reached Aug. 22.

The average on the 15-year fixed mortgage held at 3.59 percent. The two-year high of 3.60 percent was hit on Aug. 22.

Long-term mortgage rates have risen more than a full percentage point since May, when Chairman Ben Bernanke first signaled that the Fed could reduce its bond purchases this year. The purchases have been intended to keep long-term loan rates extremely low.

Most analysts expect the Fed to decide at its meeting next week to scale back its bond purchases.

Even with the recent gain, mortgage rates remain low by historical standards. But higher rates have spurred some homebuyers to close deals quickly and could slow the market’s momentum if they continue to rise.

Mortgage rates have been rising because they tend to track the yield on the 10-year Treasury note. The yield has climbed 1.3 percentage points in the past four months as bond traders have anticipated that the Fed will slow its bond buying.

The 10-year note’s rate was 2.92 percent on Wednesday, down from 2.97 percent Tuesday but up from 2.89 percent a week earlier.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan was steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage fell to 2.67 percent from 2.71 percent. The fee declined to 0.4 point from 0.5 point.

The average rate on a five-year adjustable mortgage dipped to 3.22 percent from 3.28 percent. The fee was unchanged at 0.5 point.

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