Friday, November 12, 2010
Wednesday, November 10, 2010
Obama administration sings new tune on foreclosures
Obama administration sings new tune on foreclosures
By Tami Luhby, senior writerNovember 2, 2010: 9:21 AM ET \
NEW YORK (CNNMoney) -- The Obama administration is singing a different tune about foreclosures.
A year ago, officials focused on stemming the foreclosure tide. Now they are touting the need for foreclosures to rebuild the housing market.
Foreclosure Fiasco
What the election means for foreclosures and robo-signing
American dream fades for more as homeownership falls
Obama administration sings new tune on foreclosures
Home prices expected to slide another 8%
Facing foreclosure? Don't worry. You can still vote
Quiz
Befuddled by foreclosures?
1. What are "robo-signers?"
A) Computers that auto-approve loans.
B) Bank employees who sign loan documents without first reviewing their content.
C) Powerful cyborgs that pressure bank employees to sign off on financial documents that are known to be inaccurate.
Last week Phyllis Caldwell, head of the Treasury Department's Homeownership Preservation Office, told a congressional panel that "an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them."
And White House Press Secretary Robert Gibbs last month told reporters that without sales of homes in distressed areas the "recovery in the housing market stops. It's frozen."
"That obviously can have -- we believe and others believe -- a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit," Gibbs said.
But when Obama unveiled his signature foreclosure prevention program in February 2009, he said loan modifications were a key way to prevent the housing crisis from deepening. His initiative called for reducing distressed borrowers' monthly payments to 31% of their pre-tax income.
"We're not just helping homeowners at risk of falling over the edge; we're preventing their neighbors from being pulled over that edge too -- as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs," the president said.
The shift in rhetoric signals the Obama administration is recognizing that its loan modification program is foundering, experts said. Also, it is acknowledging that banks must address their swelling ranks of delinquent loans.
To be sure, the administration is still concerned with helping homeowners avoid foreclosure. Officials have rolled out a series of initiatives in 2010 aimed at assisting the unemployed and the underwater who owe more than their houses are worth.
And, they have called for reviews into the institutions' foreclosure policies and procedures, stressing that servicers must comply with the law.
But they also now acknowledge more vocally that foreclosures must continue for a normal housing market to return. And that, in part, is why the administration is not supporting a nationwide foreclosure freeze despite the paperwork scandal that is roiling the mortgage industry.
The administration says there has been no change in either policy or rhetoric surrounding foreclosures and the housing market. The loan modification program was never meant to save every homeowner and officials always acknowledged the role of foreclosures in the market's recovery, according to a Treasury spokeswoman.
"We have always thought some foreclosures needed to happen for there to be a full housing recovery," said the spokeswoman, Andrea Risotto.
But, experts say, the new tone eminating from the White House also recognizes that the modification program is not living up to its initial goals of helping up to 4 million people avoid foreclosure. Some 496,000 distressed borrowers have received long-term modifications through September.
"What they have now realized is there are a lot of borrowers who can't be saved and have to be moved through the foreclosure process," said Laurie Goodman, senior managing director with Amherst Securities.
And they must break this news to Americans.
Officials are "trying to soften everybody up" to the fact that foreclosures are necessary, said Guy Cecela, publisher of Inside Mortgage Finance, an industry newsletter.
The new talking points, however, won't likely result in a change in policy, said Anthony Sanders, a real estate finance professor at George Mason University. Administration officials will continue to support foreclosure alternatives because they are more palatable.
"As long as politics are involved, they'll keep doing it," said Sanders.
By Tami Luhby, senior writerNovember 2, 2010: 9:21 AM ET \
NEW YORK (CNNMoney) -- The Obama administration is singing a different tune about foreclosures.
A year ago, officials focused on stemming the foreclosure tide. Now they are touting the need for foreclosures to rebuild the housing market.
Foreclosure Fiasco
What the election means for foreclosures and robo-signing
American dream fades for more as homeownership falls
Obama administration sings new tune on foreclosures
Home prices expected to slide another 8%
Facing foreclosure? Don't worry. You can still vote
Quiz
Befuddled by foreclosures?
1. What are "robo-signers?"
A) Computers that auto-approve loans.
B) Bank employees who sign loan documents without first reviewing their content.
C) Powerful cyborgs that pressure bank employees to sign off on financial documents that are known to be inaccurate.
Last week Phyllis Caldwell, head of the Treasury Department's Homeownership Preservation Office, told a congressional panel that "an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them."
And White House Press Secretary Robert Gibbs last month told reporters that without sales of homes in distressed areas the "recovery in the housing market stops. It's frozen."
"That obviously can have -- we believe and others believe -- a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit," Gibbs said.
But when Obama unveiled his signature foreclosure prevention program in February 2009, he said loan modifications were a key way to prevent the housing crisis from deepening. His initiative called for reducing distressed borrowers' monthly payments to 31% of their pre-tax income.
"We're not just helping homeowners at risk of falling over the edge; we're preventing their neighbors from being pulled over that edge too -- as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs," the president said.
The shift in rhetoric signals the Obama administration is recognizing that its loan modification program is foundering, experts said. Also, it is acknowledging that banks must address their swelling ranks of delinquent loans.
To be sure, the administration is still concerned with helping homeowners avoid foreclosure. Officials have rolled out a series of initiatives in 2010 aimed at assisting the unemployed and the underwater who owe more than their houses are worth.
And, they have called for reviews into the institutions' foreclosure policies and procedures, stressing that servicers must comply with the law.
But they also now acknowledge more vocally that foreclosures must continue for a normal housing market to return. And that, in part, is why the administration is not supporting a nationwide foreclosure freeze despite the paperwork scandal that is roiling the mortgage industry.
The administration says there has been no change in either policy or rhetoric surrounding foreclosures and the housing market. The loan modification program was never meant to save every homeowner and officials always acknowledged the role of foreclosures in the market's recovery, according to a Treasury spokeswoman.
"We have always thought some foreclosures needed to happen for there to be a full housing recovery," said the spokeswoman, Andrea Risotto.
But, experts say, the new tone eminating from the White House also recognizes that the modification program is not living up to its initial goals of helping up to 4 million people avoid foreclosure. Some 496,000 distressed borrowers have received long-term modifications through September.
"What they have now realized is there are a lot of borrowers who can't be saved and have to be moved through the foreclosure process," said Laurie Goodman, senior managing director with Amherst Securities.
And they must break this news to Americans.
Officials are "trying to soften everybody up" to the fact that foreclosures are necessary, said Guy Cecela, publisher of Inside Mortgage Finance, an industry newsletter.
The new talking points, however, won't likely result in a change in policy, said Anthony Sanders, a real estate finance professor at George Mason University. Administration officials will continue to support foreclosure alternatives because they are more palatable.
"As long as politics are involved, they'll keep doing it," said Sanders.
Tuesday, October 12, 2010
Frisco Plano Lock-Up 2010: Henry Ramirez
Frisco Plano Lock-Up 2010: Henry Ramirez
I NEED YOUR HELP!
I'm going behind bars for "GOOD" PLEASE HELP BAIL ME OUT! Your donation is my key to freedom! Be proud of the fact that together we're providing help and hope to kids and adults served by MDA in our community. Thanks for making a difference!
I NEED YOUR HELP!
I'm going behind bars for "GOOD" PLEASE HELP BAIL ME OUT! Your donation is my key to freedom! Be proud of the fact that together we're providing help and hope to kids and adults served by MDA in our community. Thanks for making a difference!
Tuesday, October 5, 2010
Friday, March 26, 2010
Bucking trend, Texas cities keep growing, with Dallas-Fort Worth in the lead | Nation | ...
Bucking trend, Texas cities keep growing, with Dallas-Fort Worth in the lead Nation ...
By STEVE CAMPBELL
sfcampbell@star-telegram.com
Even as the recession put the brakes on mobility across America, Dallas-Fort Worth led the nation in population growth for the 12 months that ended July 1, according to new census estimates released Tuesday.
The Metroplex added 146,530 people. The Houston area wasn't far behind, adding 140,784, the second-highest increase. Los Angeles (106,402), New York City (101,295) and Washington, D.C. (98,305) rounded out the top five.
Austin (50,975) was 12th and San Antonio (41,437) was 16th.
The Texas metropolitan areas stand out, demographers say.
"Texas is the bright light in this very dim decade," said William Frey, a demographer at Brookings Institution who analyzed the data.
"In this economy, any growth is good," he said, noting that Texas has faired considerably better as the housing meltdown, financial crisis and skyrocketing unemployment blanketed the country, dropping migration to the lowest level since World War II.
"There is something magical happening down there," echoed Mark Mather, associate vice president of the Population Reference Bureau, who also crunched the new numbers.
"It's a combination of things happening in Texas," Mather said. "You've got a diverse economy with lots of jobs in high tech and industry. I think the fact that the bottom dropped out of the housing markets in formerly hot areas like Florida and California made Texas look more attractive. I would guess Texas' low unemployment rate also played a part.
"And you've still got fairly high levels of immigration driving growth."
The recession intensified in Texas in the second half of last year, with the state's jobless rate reaching 8.2 percent by December, still lower than the nation, which hit 10 percent. And even in Fort Worth, city leaders are grappling with a decline in tax revenue, leaving a huge budget shortfall.
Fort Worth Mayor Mike Moncrief said the Metroplex's affordability, job opportunities and status as "the best place to ride out the recession" are the keys to the continued growth.
"We have been affected, but I think we'll recover first," Moncrief said. "It intensifies our challenge to be able to provide the infrastructure. It's not sexy, it's not glitzy, and it's all very expensive.
"It's also very difficult to address. We've got to plan carefully about how we grow," Moncrief said. "It must be sustainable, and we must have transportation options. We can't just build our city around cars and trucks."
The housing meltdown was a big factor in limiting mobility across the country and slowing growth in places like Las Vegas, Atlanta and Phoenix, Frey and Mather said.
In Las Vegas, for the first time in decades, more people moved out than moved in. The casino capital is suffering a double whammy from the housing bubble and the slowdown in tourism.
"In places like Nevada, growth was linked to the housing market and all the demand for infrastructure and services that went along with that bubble and then it just collapsed," Mather said.
Nationally, people are being more cautious as they try to just hold onto their jobs, Mather said.
Baby boomers, who just a few years ago might have been considering moves to retirement towns, are hunkering down in big cities where jobs are more plentiful.
"There's a lot of people who might want to retire who are unable to do so now because they lost money in home prices and stock prices," Mather said. "So a lot of people are continuing to work and staying put.
"A growing number of baby boomers want to continue working after age 65, and many are choosing to live closer to cities to keep their options open.
"Baby boomers helped fuel housing and population growth in retirement areas earlier in the decade, and now they are playing an important role in the decline."
Steve Campbell, 817-390-7981 Read more: http://www.star-telegram.com/2010/03/23/2062556/bucking-trend-texas-cities-keep.html#ixzz0jJmxapne
By STEVE CAMPBELL
sfcampbell@star-telegram.com
Even as the recession put the brakes on mobility across America, Dallas-Fort Worth led the nation in population growth for the 12 months that ended July 1, according to new census estimates released Tuesday.
The Metroplex added 146,530 people. The Houston area wasn't far behind, adding 140,784, the second-highest increase. Los Angeles (106,402), New York City (101,295) and Washington, D.C. (98,305) rounded out the top five.
Austin (50,975) was 12th and San Antonio (41,437) was 16th.
The Texas metropolitan areas stand out, demographers say.
"Texas is the bright light in this very dim decade," said William Frey, a demographer at Brookings Institution who analyzed the data.
"In this economy, any growth is good," he said, noting that Texas has faired considerably better as the housing meltdown, financial crisis and skyrocketing unemployment blanketed the country, dropping migration to the lowest level since World War II.
"There is something magical happening down there," echoed Mark Mather, associate vice president of the Population Reference Bureau, who also crunched the new numbers.
"It's a combination of things happening in Texas," Mather said. "You've got a diverse economy with lots of jobs in high tech and industry. I think the fact that the bottom dropped out of the housing markets in formerly hot areas like Florida and California made Texas look more attractive. I would guess Texas' low unemployment rate also played a part.
"And you've still got fairly high levels of immigration driving growth."
The recession intensified in Texas in the second half of last year, with the state's jobless rate reaching 8.2 percent by December, still lower than the nation, which hit 10 percent. And even in Fort Worth, city leaders are grappling with a decline in tax revenue, leaving a huge budget shortfall.
Fort Worth Mayor Mike Moncrief said the Metroplex's affordability, job opportunities and status as "the best place to ride out the recession" are the keys to the continued growth.
"We have been affected, but I think we'll recover first," Moncrief said. "It intensifies our challenge to be able to provide the infrastructure. It's not sexy, it's not glitzy, and it's all very expensive.
"It's also very difficult to address. We've got to plan carefully about how we grow," Moncrief said. "It must be sustainable, and we must have transportation options. We can't just build our city around cars and trucks."
The housing meltdown was a big factor in limiting mobility across the country and slowing growth in places like Las Vegas, Atlanta and Phoenix, Frey and Mather said.
In Las Vegas, for the first time in decades, more people moved out than moved in. The casino capital is suffering a double whammy from the housing bubble and the slowdown in tourism.
"In places like Nevada, growth was linked to the housing market and all the demand for infrastructure and services that went along with that bubble and then it just collapsed," Mather said.
Nationally, people are being more cautious as they try to just hold onto their jobs, Mather said.
Baby boomers, who just a few years ago might have been considering moves to retirement towns, are hunkering down in big cities where jobs are more plentiful.
"There's a lot of people who might want to retire who are unable to do so now because they lost money in home prices and stock prices," Mather said. "So a lot of people are continuing to work and staying put.
"A growing number of baby boomers want to continue working after age 65, and many are choosing to live closer to cities to keep their options open.
"Baby boomers helped fuel housing and population growth in retirement areas earlier in the decade, and now they are playing an important role in the decline."
Steve Campbell, 817-390-7981 Read more: http://www.star-telegram.com/2010/03/23/2062556/bucking-trend-texas-cities-keep.html#ixzz0jJmxapne
Thursday, March 25, 2010
HUDNo.10-056/U.S. Department of Housing and Urban Development (HUD)
HUDNo.10-056/U.S. Department of Housing and Urban Development (HUD)
HUD No. 10-056Andrea Mead(202) 708-0685
FOR RELEASEWednesdayMarch 24, 2010
3,100 PUBLIC HOUSING AUTHORITIES MEET CRITICAL RECOVERY ACT DEADLINE, CREATE NEARLY 9,000 JOBS AND REHAB 150,000 HOMES FOR LOW-INCOME FAMILIESJust over one year after Recovery Act is signed, funds already putting Americans to work, making homes healthier for thousands of families across the U.S.
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced that over 3,100 public housing authorities across the U.S. successfully met a critical funding deadline outlined in the American Reinvestment and Recovery Act of 2009 (Recovery Act). As a result, the nearly $3 billion in Public Housing Capital Fund grants awarded through the Recovery Act one year ago are being used to make significant improvements to tens of thousands of public housing units nationwide; creating jobs and growing the economy.
"Strict deadlines, such as this one, were written into the Recovery Act to ensure that funds would be used to meet the top goal of putting Americans back to work as quickly as possible," said Donovan. "I am proud of the work HUD and public housing authorities across the country did to meet this critical deadline. It speaks to the commitment they have to improve affordable housing and grow local economies. Families and communities are already seeing new windows, roofs, cost-saving energy-efficient appliances, and much-needed jobs."
To date, as a result of this critical Recovery Act funding, public housing authorities reported creating or retaining nearly 9,000 jobs and developing or rehabilitating 150,000 public housing units in hard-hit neighborhoods throughout the country. Just one year after being awarded, Recovery Act public housing funds, which were intended to help jumpstart the economy during the worst recession in a generation, are also allowing housing agencies to address the long-standing capital needs of public housing, create jobs, and increase energy efficiency.
On March 17, 2009, less than 30 days after the Recovery Act was signed into law, HUD provided nearly $3 billion in Public Housing Capital funds to over 3,100 public housing authorities nationwide. The funds were allocated through an established formula, effectively more than doubling the Department's annual support of local housing authorities. Specific guidelines in the law required that all funding awarded to public housing authorities through the Recovery Act be "obligated," or committed to specific projects or activities, one year after it was awarded, or the funding must be recaptured by HUD and redistributed to other agencies in compliance with the requirements.
All public housing authorities were able to meet that deadline by either obligating 100 percent of their funds or voluntarily returning all or a portion of their funds by the deadline. Of the $2.985 billion that was awarded to 3,134 public housing authorities, $2.981 billion has been obligated and $3.246 million was voluntarily returned. HUD is currently determining the redistribution process for the funding returned. The 172 ‘troubled' housing authorities that received funding all met the deadline as well, with only two troubled agencies returning all or a portion of their funds by March 17th.
HUD's Capital Fund Program provides annual funding to public housing authorities to develop, finance, and/or modernize the public housing in their communities. This funding can be used to make large-scale improvements such as new roofs and for the replacement of plumbing and electrical systems to increase energy efficiency.
The Recovery Act included $13.61 billion for projects and programs administered by HUD, nearly 75 percent of which was allocated to state and local recipients only eight days after President Obama signed the Act into law, including public housing capital funding. The remaining 25 percent is being awarded through competitive grant programs. To date, 98 percent of HUD's Recovery Act funds are in the hands of local communities, being used to improve housing and neighborhoods, while creating jobs. HUD is committed to implementing Recovery Act investments swiftly and effectively as they generate tens of thousands of jobs, modernize homes to make them energy efficient, and help the families and communities hardest hit by the economic crisis.
In addition, Secretary Donovan and the Department are committed to providing the highest level of transparency possible as Recovery Act funds are administered. It is vitally important that the American people are fully aware of how their tax dollars are being spent and can hold their federal leaders accountable. Every dollar of Recovery Act funds HUD spends can be reviewed and tracked at HUD's Recovery Act website. The full text of HUD's funding notices and tracking of future performance of these grants is also available at HUD's Recovery Act website.
###
HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
HUD No. 10-056Andrea Mead(202) 708-0685
FOR RELEASEWednesdayMarch 24, 2010
3,100 PUBLIC HOUSING AUTHORITIES MEET CRITICAL RECOVERY ACT DEADLINE, CREATE NEARLY 9,000 JOBS AND REHAB 150,000 HOMES FOR LOW-INCOME FAMILIESJust over one year after Recovery Act is signed, funds already putting Americans to work, making homes healthier for thousands of families across the U.S.
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced that over 3,100 public housing authorities across the U.S. successfully met a critical funding deadline outlined in the American Reinvestment and Recovery Act of 2009 (Recovery Act). As a result, the nearly $3 billion in Public Housing Capital Fund grants awarded through the Recovery Act one year ago are being used to make significant improvements to tens of thousands of public housing units nationwide; creating jobs and growing the economy.
"Strict deadlines, such as this one, were written into the Recovery Act to ensure that funds would be used to meet the top goal of putting Americans back to work as quickly as possible," said Donovan. "I am proud of the work HUD and public housing authorities across the country did to meet this critical deadline. It speaks to the commitment they have to improve affordable housing and grow local economies. Families and communities are already seeing new windows, roofs, cost-saving energy-efficient appliances, and much-needed jobs."
To date, as a result of this critical Recovery Act funding, public housing authorities reported creating or retaining nearly 9,000 jobs and developing or rehabilitating 150,000 public housing units in hard-hit neighborhoods throughout the country. Just one year after being awarded, Recovery Act public housing funds, which were intended to help jumpstart the economy during the worst recession in a generation, are also allowing housing agencies to address the long-standing capital needs of public housing, create jobs, and increase energy efficiency.
On March 17, 2009, less than 30 days after the Recovery Act was signed into law, HUD provided nearly $3 billion in Public Housing Capital funds to over 3,100 public housing authorities nationwide. The funds were allocated through an established formula, effectively more than doubling the Department's annual support of local housing authorities. Specific guidelines in the law required that all funding awarded to public housing authorities through the Recovery Act be "obligated," or committed to specific projects or activities, one year after it was awarded, or the funding must be recaptured by HUD and redistributed to other agencies in compliance with the requirements.
All public housing authorities were able to meet that deadline by either obligating 100 percent of their funds or voluntarily returning all or a portion of their funds by the deadline. Of the $2.985 billion that was awarded to 3,134 public housing authorities, $2.981 billion has been obligated and $3.246 million was voluntarily returned. HUD is currently determining the redistribution process for the funding returned. The 172 ‘troubled' housing authorities that received funding all met the deadline as well, with only two troubled agencies returning all or a portion of their funds by March 17th.
HUD's Capital Fund Program provides annual funding to public housing authorities to develop, finance, and/or modernize the public housing in their communities. This funding can be used to make large-scale improvements such as new roofs and for the replacement of plumbing and electrical systems to increase energy efficiency.
The Recovery Act included $13.61 billion for projects and programs administered by HUD, nearly 75 percent of which was allocated to state and local recipients only eight days after President Obama signed the Act into law, including public housing capital funding. The remaining 25 percent is being awarded through competitive grant programs. To date, 98 percent of HUD's Recovery Act funds are in the hands of local communities, being used to improve housing and neighborhoods, while creating jobs. HUD is committed to implementing Recovery Act investments swiftly and effectively as they generate tens of thousands of jobs, modernize homes to make them energy efficient, and help the families and communities hardest hit by the economic crisis.
In addition, Secretary Donovan and the Department are committed to providing the highest level of transparency possible as Recovery Act funds are administered. It is vitally important that the American people are fully aware of how their tax dollars are being spent and can hold their federal leaders accountable. Every dollar of Recovery Act funds HUD spends can be reviewed and tracked at HUD's Recovery Act website. The full text of HUD's funding notices and tracking of future performance of these grants is also available at HUD's Recovery Act website.
###
HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
Thursday, January 21, 2010
2009 Cost vs. Value Report: REALTOR® Magazine
2009 Cost vs. Value Report: REALTOR® Magazine
2009 Cost vs. Value Report: Small Projects, Big Bang
Judicious home remodeling is still worth the investment, according to Remodeling magazine's annual "Cost vs. Value Report."
By G.M. Filisko
Uncertainty and restraint are the order of the day in this economy, and that sense of caution is reflected in home owners’ return on their investment in remodeling projects, according to REALTORS® in 80 metropolitan markets surveyed by Remodeling magazine for this year’s Cost vs. Value Report.
The majority of the 10 remodeling projects with the best return on investment nationally are a testament to pragmatism. Six of the 10 projects—siding and window replacement using a variety of materials—involve home maintenance that costs less than $14,000.
Two more—adding an attic bedroom or a wood deck—reinforce the notion that boosting the amount of livable space in and around your home will attract buyers who are increasingly looking for more room for their buck. In past years, converting an attic into a bedroom was a project that landed squarely in the middle of the rankings, but this year it leapfrogged over other categories into third place. It’s an admittedly pricey project, with an average national cost of nearly $50,000, but it generates an average national return of 83.1 percent and a better-than-100 percent return on investment, according to REALTORS® in 14 of the 80 cities surveyed. Adding a wood deck is much more economical, with an average national cost of slightly more than $10,000. Its average national return is 80.6 percent, but in six cities, its return is estimated at 100 percent or greater.
The six siding and window home maintenance projects in the top 10, combined with the project with the biggest return on investment—a mid-range entry door replacement—prove something that every sales associate tells sellers throughout the country: First impressions count. A mid-range entry door replacement, a project new to the survey this year, is the only home remodeling project that REALTORS® expect to generate a full return for the money nationally. It’s the least expensive of the 33 projects included in the analysis, yet it brings a whopping average national return on investment of 128.9 percent. It generates a better-than-100 percent return in 48 of the 80 cities, according to REALTORS® surveyed, and in several cities, its return is estimated at more than double its cost.
Additional data prove the value of restraint. Upgrading kitchens and baths is still a smart bet. However, home owners will recoup the greatest share of their costs by foregoing super-deluxe projects in favor of mid-range kitchen and bath remodels. A mid-range kitchen remodel brings an average 72.1 percent return on investment, while an upscale kitchen re-do returns only an average of 63.2 percent of the money invested. A mid-range bathroom project has an average 71 percent cost recovery, but the average recovery on an upscale bathroom project is nearly 10 points lower, at 61.6 percent.
The only upscale projects that cracked the top 10 were the home maintenance projects of fiber-cement siding replacement and vinyl window replacement. The average cost of fiber-cement siding is more than $13,000, but its return on investment reached 83.6 percent, placing it squarely in second place in the survey. The average cost of vinyl window replacement is nearly $14,000, and it generates an average return of 76.5 percent, or tenth place in the survey. Of the 12 upscale projects, nine landed in the bottom half.
Overall, home owners recouped an average of 63.8 percent of their investment in 33 different home improvement projects, according to REALTORS® who responded to the survey. The expected cost recoup was generally down from previous years in line with the drop in home prices nationally (see page 23). The return on home owners’ investment in remodeling projects has declined an average of 3.5 percentage points between 2008 and 2009. That’s down from the 2.7 point drop between 2007 and 2008 and much less than the 5.5 point drop between 2006 and 2007 and the 10.5 point drop from 2005 to 2006.
Zooming in from the national to the city level, Honolulu sits atop the rankings for having the most projects—18—that generate at least a full return on investment. In Honolulu, adding a wood deck, completing a minor kitchen remodel, adding fiber-cement siding, and replacing an entry door bring the highest returns, ranging from 121.1 to 195.3 percent return on investment. San Francisco is closest behind with 10 projects generating at least a full return on investment. Adding a master suite, doing a minor kitchen remodel, and replacing an entry door have the biggest returns, producing between 112.2 and 119.1 percent return on investment.
One surprise: Despite the common perception that contractors are hungry for work and therefore willing to wheel and deal, the average national cost of every project surveyed has gone up, though at a slower rate than in the previous year.
View 2009-10 Cost Vs. Value Report. Data courtesy of Remodeling Magazine
10 Big-Impact, Low-Cost Remodeling Projects
Working with sellers who have some—but not unlimited—cash for upgrades? Here are budget-minded enhancements you can suggest to make their home stand out.
1. Tidy up kitchen cabinets.
"Potential buyers do open kitchen cabinets and look inside," says Morrissey. "Home owners can add rollout organizing trays so when buyers peek in, they feel like there’s lots of room for their stuff."
2. Add or replace tile.
"By retiling very inexpensively, you make a room look way cleaner that it was," says Javier Zuluaga, owner of Home Repairs and Remodeling LLC in Tempe, Ariz. "Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash or add a new one. We also use inexpensive tile to upgrade bathrooms."
3. Add a breakfast bar.
When a wall separates a kitchen from a family room, suggest cutting out an opening to create a breakfast bar. "In one home, there was a cutout in the wall between the kitchen and living room," explains Matthew Quinn, a sales associate at Quinn’s Realty & Estate Services in Falls Church, Va., who handles estate and real estate sales for family members whose loved ones have passed away. "We left the structure of the cutout, added an oversized granite breakfast bar, and put chairs in front of it. That cost about $600."
4. Install granite tile instead of a slab.
"Everybody is hot for granite kitchen countertops, but that can be a $5,000 upgrade," says John Wilder, a general contractor and owner of Fence and Deck Doctor in New Castle, Ind. "Instead, home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money."
5. Freshen up a bathroom without retiling.
"With a dated bathroom, I recommend putting in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300," says Wilder. "And instead of replacing the tile, the existing grout can be lightly scraped and regrouted, which leaves a haze that can be buffed out and will make the tile look brand new. Also install glass shower doors. A French door adds a lot of panache and elegance for $250, and people will notice the door, not the tile. With all that, you’ve done a bathroom remodel for $1,000 to $2,000."
6. Freshen up the basement.
"If home owners have cement block or poured concrete walls in the basement, suggest they have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint," recommends Wilder. "They can then add a top coat to add color. They can also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon."
7. Add a room.
Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall. "One time, we closed off a half-wall to an office and added a door to the other side of the room, thus creating another bedroom," says Quinn. "That $400 procedure, which took a contractor one day, netted about $40,000 in the sales price." Zuluaga has also added bedrooms inexpensively. "In a two-bedroom house, there was an archway that led to a third room that was used as a den," he explains. "It had a dry bar where there would have been a closet, so we took out the dry bar and created a closet so the owners had a third bedroom."
8. Spruce up cabinet fronts.
Suggest home owners update tired-looking kitchen cabinets. Reconditioning is the least expensive move for under $1,000. "If the wood is starting to look shabby from use or contaminants in the air, we take out the nicks and scratches, recondition it with oil, and put new hardware on," explains Heidi Morrissey, vice president of marketing and sales at Kitchen Tune-Up in Aberdeen, S.D. For $1,500 to $4,000, owners can replace the cabinet doors and drawer fronts, and for $4,000 to $12,000, they can have all the cabinets refaced. "With refacing, owners can change the color of the cabinets by replacing the door and having a new skin put on the boxes," says Morrissey. "If they have oak cabinets today, they can have cherry the next day."
9. Replace light fixtures.
"In a foyer and in bathrooms and kitchens," says Wilder, "replacing overhead light fixtures provides a lot of pop for a little money." If the kitchen has track lighting, Zuluaga suggests the home owner spend $450 to $600 to have an electrician replace it with recessed canned lights on a dimmer switch to add ambience. For about $700, Zuluaga also suggests installing pendant lights over a kitchen island or peninsula.
10. Tech-up the garage.
"Sometimes we replace the garage door opener with a remote touchpad entry system," says Zuluaga. "That costs about $425 and makes it look like a high-end system."
Download a PDF version of these 10 big-impact, low-cost ideas.
G.M. Filisko is a freelance writer for REALTOR® magazine. You can contact magazine staff at narpubs@realtors.org.
2009 Cost vs. Value Report: Small Projects, Big Bang
Judicious home remodeling is still worth the investment, according to Remodeling magazine's annual "Cost vs. Value Report."
By G.M. Filisko
Uncertainty and restraint are the order of the day in this economy, and that sense of caution is reflected in home owners’ return on their investment in remodeling projects, according to REALTORS® in 80 metropolitan markets surveyed by Remodeling magazine for this year’s Cost vs. Value Report.
The majority of the 10 remodeling projects with the best return on investment nationally are a testament to pragmatism. Six of the 10 projects—siding and window replacement using a variety of materials—involve home maintenance that costs less than $14,000.
Two more—adding an attic bedroom or a wood deck—reinforce the notion that boosting the amount of livable space in and around your home will attract buyers who are increasingly looking for more room for their buck. In past years, converting an attic into a bedroom was a project that landed squarely in the middle of the rankings, but this year it leapfrogged over other categories into third place. It’s an admittedly pricey project, with an average national cost of nearly $50,000, but it generates an average national return of 83.1 percent and a better-than-100 percent return on investment, according to REALTORS® in 14 of the 80 cities surveyed. Adding a wood deck is much more economical, with an average national cost of slightly more than $10,000. Its average national return is 80.6 percent, but in six cities, its return is estimated at 100 percent or greater.
The six siding and window home maintenance projects in the top 10, combined with the project with the biggest return on investment—a mid-range entry door replacement—prove something that every sales associate tells sellers throughout the country: First impressions count. A mid-range entry door replacement, a project new to the survey this year, is the only home remodeling project that REALTORS® expect to generate a full return for the money nationally. It’s the least expensive of the 33 projects included in the analysis, yet it brings a whopping average national return on investment of 128.9 percent. It generates a better-than-100 percent return in 48 of the 80 cities, according to REALTORS® surveyed, and in several cities, its return is estimated at more than double its cost.
Additional data prove the value of restraint. Upgrading kitchens and baths is still a smart bet. However, home owners will recoup the greatest share of their costs by foregoing super-deluxe projects in favor of mid-range kitchen and bath remodels. A mid-range kitchen remodel brings an average 72.1 percent return on investment, while an upscale kitchen re-do returns only an average of 63.2 percent of the money invested. A mid-range bathroom project has an average 71 percent cost recovery, but the average recovery on an upscale bathroom project is nearly 10 points lower, at 61.6 percent.
The only upscale projects that cracked the top 10 were the home maintenance projects of fiber-cement siding replacement and vinyl window replacement. The average cost of fiber-cement siding is more than $13,000, but its return on investment reached 83.6 percent, placing it squarely in second place in the survey. The average cost of vinyl window replacement is nearly $14,000, and it generates an average return of 76.5 percent, or tenth place in the survey. Of the 12 upscale projects, nine landed in the bottom half.
Overall, home owners recouped an average of 63.8 percent of their investment in 33 different home improvement projects, according to REALTORS® who responded to the survey. The expected cost recoup was generally down from previous years in line with the drop in home prices nationally (see page 23). The return on home owners’ investment in remodeling projects has declined an average of 3.5 percentage points between 2008 and 2009. That’s down from the 2.7 point drop between 2007 and 2008 and much less than the 5.5 point drop between 2006 and 2007 and the 10.5 point drop from 2005 to 2006.
Zooming in from the national to the city level, Honolulu sits atop the rankings for having the most projects—18—that generate at least a full return on investment. In Honolulu, adding a wood deck, completing a minor kitchen remodel, adding fiber-cement siding, and replacing an entry door bring the highest returns, ranging from 121.1 to 195.3 percent return on investment. San Francisco is closest behind with 10 projects generating at least a full return on investment. Adding a master suite, doing a minor kitchen remodel, and replacing an entry door have the biggest returns, producing between 112.2 and 119.1 percent return on investment.
One surprise: Despite the common perception that contractors are hungry for work and therefore willing to wheel and deal, the average national cost of every project surveyed has gone up, though at a slower rate than in the previous year.
View 2009-10 Cost Vs. Value Report. Data courtesy of Remodeling Magazine
10 Big-Impact, Low-Cost Remodeling Projects
Working with sellers who have some—but not unlimited—cash for upgrades? Here are budget-minded enhancements you can suggest to make their home stand out.
1. Tidy up kitchen cabinets.
"Potential buyers do open kitchen cabinets and look inside," says Morrissey. "Home owners can add rollout organizing trays so when buyers peek in, they feel like there’s lots of room for their stuff."
2. Add or replace tile.
"By retiling very inexpensively, you make a room look way cleaner that it was," says Javier Zuluaga, owner of Home Repairs and Remodeling LLC in Tempe, Ariz. "Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash or add a new one. We also use inexpensive tile to upgrade bathrooms."
3. Add a breakfast bar.
When a wall separates a kitchen from a family room, suggest cutting out an opening to create a breakfast bar. "In one home, there was a cutout in the wall between the kitchen and living room," explains Matthew Quinn, a sales associate at Quinn’s Realty & Estate Services in Falls Church, Va., who handles estate and real estate sales for family members whose loved ones have passed away. "We left the structure of the cutout, added an oversized granite breakfast bar, and put chairs in front of it. That cost about $600."
4. Install granite tile instead of a slab.
"Everybody is hot for granite kitchen countertops, but that can be a $5,000 upgrade," says John Wilder, a general contractor and owner of Fence and Deck Doctor in New Castle, Ind. "Instead, home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money."
5. Freshen up a bathroom without retiling.
"With a dated bathroom, I recommend putting in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300," says Wilder. "And instead of replacing the tile, the existing grout can be lightly scraped and regrouted, which leaves a haze that can be buffed out and will make the tile look brand new. Also install glass shower doors. A French door adds a lot of panache and elegance for $250, and people will notice the door, not the tile. With all that, you’ve done a bathroom remodel for $1,000 to $2,000."
6. Freshen up the basement.
"If home owners have cement block or poured concrete walls in the basement, suggest they have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint," recommends Wilder. "They can then add a top coat to add color. They can also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon."
7. Add a room.
Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall. "One time, we closed off a half-wall to an office and added a door to the other side of the room, thus creating another bedroom," says Quinn. "That $400 procedure, which took a contractor one day, netted about $40,000 in the sales price." Zuluaga has also added bedrooms inexpensively. "In a two-bedroom house, there was an archway that led to a third room that was used as a den," he explains. "It had a dry bar where there would have been a closet, so we took out the dry bar and created a closet so the owners had a third bedroom."
8. Spruce up cabinet fronts.
Suggest home owners update tired-looking kitchen cabinets. Reconditioning is the least expensive move for under $1,000. "If the wood is starting to look shabby from use or contaminants in the air, we take out the nicks and scratches, recondition it with oil, and put new hardware on," explains Heidi Morrissey, vice president of marketing and sales at Kitchen Tune-Up in Aberdeen, S.D. For $1,500 to $4,000, owners can replace the cabinet doors and drawer fronts, and for $4,000 to $12,000, they can have all the cabinets refaced. "With refacing, owners can change the color of the cabinets by replacing the door and having a new skin put on the boxes," says Morrissey. "If they have oak cabinets today, they can have cherry the next day."
9. Replace light fixtures.
"In a foyer and in bathrooms and kitchens," says Wilder, "replacing overhead light fixtures provides a lot of pop for a little money." If the kitchen has track lighting, Zuluaga suggests the home owner spend $450 to $600 to have an electrician replace it with recessed canned lights on a dimmer switch to add ambience. For about $700, Zuluaga also suggests installing pendant lights over a kitchen island or peninsula.
10. Tech-up the garage.
"Sometimes we replace the garage door opener with a remote touchpad entry system," says Zuluaga. "That costs about $425 and makes it look like a high-end system."
Download a PDF version of these 10 big-impact, low-cost ideas.
G.M. Filisko is a freelance writer for REALTOR® magazine. You can contact magazine staff at narpubs@realtors.org.
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