Cost vs. Value Report 2006

What's the payback for remodeling? Remodeling Magazine's annual report compares construction cost with resale value for 25 common remodeling projects in 60 U.S. markets.

The 19th annual Cost vs. Value Report shows that prices continue to climb for most remodeling projects at the same time the value of improvements at resale returns to 2002 levels. None of this should come as much of a surprise to industry professionals, who have been riding the crest of the remodeling boom for several years, and this year's data confirm the housing slowdown many parts of the country are experiencing. Should you be worried? That depends on how fast and how far the housing market falls, but remember that both new construction and remodeling activity have been at record levels in recent years. Some adjustment is inevitable, but indications are that the current downturn represents a return to "normal" levels and that the prospects for remodeling remain bright.

Here are the Pacific Regional Figures

Need to buy or sell real estate in the TriValley area? Check out The Harper Team's written guarantees.

Recently, we’ve had a few conversations between the three of us and with other agents about – Why it seems difficult for some people to be “up front” with the simple facts or truth.” We hear this question and conversation repeatedly throughout the year as we’re in a business that is people intensive and there seems to be a large segment of people who have difficulty in saying something simple like – I’ve decided to use _____ as my agent.

I often wonder what people think the response would be – psycho agent going berserk? Or, perhaps agent in tears.

In the conversations I’ve been in, what I hear from agents is – it would be great to just have the facts, the simple truth. It could be that the simple truth is that many people are uncomfortable with speaking the simple truth.

Consider a listing presentation or a tour of six homes. An agent may spend several hours or more preparing the materials to provide a prospective client only to be stood up. I’m not trying to sing the blues here or bring a tear to your eye about the plight of your local Realtor®, I’m truly interested in the phenomenon of being up front.

If you don’t want to work with someone – tell them – simple as that. They’ll appreciate it, they’ll like you for it – you’ll be saving them a lot of wasted effort. It demonstrates your consideration for others.

And what’s up with those agents who can’t tell the prospective client the simple truth about the market or the state of their home or address unrealistic expectations?

Tact and diplomacy, sensitivity and consideration when presenting one’s view and opinion are always needed, but sacrificing the truth for a more convenient moment, for expediency, to get a client, or to avoid a moment of discomfort most often leads to the messy side of things.

I’m off to 24 Hour Fitness in San Ramon. It’s been raining all day, I’ve been at this computer for over 6 hours – it’s time to burn some fat and sit in the steam room. If you see me there – clue me in.

If you follow real estate news, you read a lot about national trends and forecasts, but what really matters is what is happening in your neighborhood or the neighborhood you are looking to call home. In addition, perspective counts a great deal.

We had a good year of “the bubble is bursting, the bubble is bursting” followed by general doom and gloom. Reading the 70 blogs and news sources we follow is enough to… well, it can be a real bummer at times if perspective isn’t kept.

A 1%  isn’t much in the normal fluctuation of the housing market. Your average homeowner looking for appreciation will moan about a 1% increase over a year. That same homeowner might breathe a sigh of relief if their property got through the last year with only a 1% decrease in valuation. One percent sounds like - one, not a very big number.

Looking at percentages is one thing, but what if you’re looking at dollars? Losing $2000 on the value of a $200,000 home may not rock our boat because most of us can think of terms of earning back $2K in a short amount of time. But losing $10,000 on a million dollar property might be another story especially in an area that has seen housing values rise 50% or more in a few years while income earning did not.

Local market data matters. Even though we have seen some value erosion in the East Bay, the Bay Area in general, Including the East Bay, is faring better than the national averages. National trends can affect local markets, but not necessarily. One of the major influences is how news affects the mood or mindset of a person. With the media bombardment we all receive these days, it’s more important than ever to come up for air.

Get a reality check on your local market. You can look at the graphs we provide weekly and see that there are fluctuations between communities. You can break those communities down by areas or housing price points and find more variation.

This is one of the key values in having a real estate professional that knows their local markets and follows the trends.

This post has moved here

I have been pretty busy the last 48 hours. The real estate blogs and news we follow have had some great stories – too many to condense into a short post which would certainly be a disservice to the authors who have created this great content for you. These posts have something to offer to all persons thinking of buying or selling real estate. We encourage all of our readers in Danville, San Ramon, Dublin and Pleasanton, CA to read these posts.

Borrowers Seldom Score by Paying Points - Pay discount points on a mortgage, and you take a gamble. Plenty of borrowers lost that wager in recent years, according to a pair of economists.

Where Realtors Really Make Their Money  Being in the real estate industry for over a decade I’m aware that the general image of real estate agents could be much better. Especially now, with all the people who have jumped into the business in recent years, with its low barrier to entry and all the “self-made millionaires” on the television and radio infomercials. Historically the real estate professional has ranked in polls somewhere in the middle of the pack when it comes to professional trust and integrity from the public

Real Estate Commissions Around the World

The State of Real Estate in California  Affordability concerns continued to impact the residential real estate market in California, with the share of first-time buyers declining to their second lowest level from 30.5 percent in 2005 to 27.1 percent in 2006, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Based largely on C.A.R.’s 26th Annual Housing Market Survey, “The State of the California Housing Market” examined trends in buyer and seller behavior during 2006, a transition year in which statewide sales of existing single-family homes decreased 23 percent, while price appreciation slowed dramatically as the year progressed.

Freddie Mac sees mortgage rates steady all year  "Throughout the year we expect rates on 30-year mortgages to average between 6.3 and 6.5 percent," said Freddie Mac (NYSE: FRE) chief economist Frank Nothaft. "The flat or increasing rate environment will likely cause the refinance share to contract gradually. In addition, the dollar volume of home equity cashed-out will also retreat from the record level of $314 billion set in 2006 to around $230 billion this year."

What's your house really worth?  How Zillow is turning online voyeurism into a real estate revolution. Fortune's Jeffrey M. O'Brien reports.

I had to take some exception to Mr O'Brien's last comments in the article. Here is the email Isent him:

I enjoyed the Zillow article right up to the last line which I found to be a smartass remark.I wouldn't be surprised if a writer could find one item in your life to fixate on as ostentatious. The last line trashes the whole article which I found to be a decent report on the current state of affairs in the industry.

 

It's unfortunate as I can already see it's influence on whether I would approach anything else you write with the openness I had gong into this article. It can be hard to resist that last little cutsy zing.

Housing "recovery" — Freddie Mac's version Do you hear "experts predict a housing recovery in 2007" and think "oh goody, my home's 15 percent annual appreciation is coming back this year!" ?? You are forgiven for thinking so. But that's not what "experts" mean when they say "recovery" in 2007, at least not the experts at Freddie Mac, in an economic forecast paper they released today.

Report details housing trends  State real estate group finds that more residents are buying single-family homes, zero-down loans have gained in popularity