6 worst home fixes for the money

By Dana Dratch • Bankrate.com

It's the magic phrase uttered by almost anyone who's ever considered the cost of home remodeling: "We'll get it back when we sell."

Unless you keep those projects practical, though, you might just be kidding yourself.

For example:

• Steel front door: Good.
• Master suite addition costing more than the average American home: Bad.

Every year, Remodeling magazine looks at the hottest home upgrades and renovations and calculates just how much owners get back with they sell.

Upkeep is more popular than upgrades these days, says Sal Alfano, editorial director for Remodeling. These are the projects that often recoup the biggest slice of expenses at resale. But prices and returns do vary regionally, he says.

Ever wonder what brings the lowest return when you plant that "for sale" sign? Think high-dollar, high-end and highly personalized add-ons that make you drool. Like a totally tricked-out garage built from the ground up. Or a super luxe master suite addition. Or the home office redo designed just for you.

Here are the six improvements that, in their 2010 report, ranked dead last nationally when it comes to getting those renovation dollars back at resale.

Home office remodel

Want to get an idea what today's office-away-from-the-office looks like? Walk into Starbucks.

These days, a home office consists of a multiple-choice combination of wireless laptops, smartphones, PDAs and touch-screen tablets. And that worker bee might be toiling anywhere from a home patio or a favorite restaurant to a park bench.

The standard home office renovation, meanwhile -- complete with plenty of built-in storage and high-tech wiring -- is this year's biggest loser in the resale value sweepstakes. Nationally, homeowners spent an average of $28,888 and can expect to recoup about 45.8 percent at resale, according to the report.

Return on investment doesn't reflect your enjoyment of the space, Alfano says.

He offers two tips for home-office remodelers when they sell. First, opt for something that can be easily converted back into a bedroom or den for (or by) the next buyer.

Second, when you're selling, call it a study, den or hobby room. "There's lots of call for multipurpose space. Don't lock yourself into that one use," Alfano says. Don't use words that invoke images of actual work. Or the office.

Backup power generator

You see a backup generator and imagine all of the comforts no matter what the weather.

But potential buyers hailing from outside your local area may not share that vision. (And a handful of those who do might have watched too many zombie movies.)

On average, when homeowners have a heavy-duty backup power generator installed, they spend about $14,718, according to the report. Going with a slightly less expensive model or having a less complicated installation could cut the costs significantly, Alfano says.

Average amount of the price recovered at resale time: 48.5 percent.

Sunroom addition

Real estate agents will tell you that potential buyers want square footage, pristine condition and lots of light. So a brand-new room that has the word "sun" in it, it has to be great for resale value, right?

Not necessarily.

Your first clue: The word "addition" -- which means expanding the footprint of your home -- indicates that this is not a renovation for the faint of heart (or wallet). "It's one of the more expensive projects," Alfano says.

While it seems simple enough, the national average for a sunroom addition is $75,224, according to the report. Homeowners can expect to recoup about 48.6 percent when they sell.

That doesn't mean that adding a sunroom is always a bad move.

If your home needs another common area, a sunroom could be the answer, says Katie Severance, co-author of "The Complete Idiot's Guide to Selling Your Home." An addition is best considered in the context of the whole home, she says. "The doctor has to treat the whole patient. You have to look at the house and say 'What's out of balance?'"

Upscale master suite addition

Who doesn't want to wake up in a five-star-hotel-quality suite with an attached spa bathroom and a kitchenette that affords you coffee and pastries before facing the world?

Once you see the price tag, it won't just be the coffee keeping you up at night.

For a super-deluxe master suite addition -- which adds square footage and uses only top-dollar materials -- the average cost is about $232,062, according to the report.

That's 460 nights at a posh resort with enough left over to raid the minibar.

In years past, this project was "sort of a trend in vacation homes" that migrated to primary dwellings, Alfano says. Sellers can expect to recover about 52.7 percent at resale.

Your buyer can purchase a newer house with the same features as part of the original floor plan that "probably lays out better anyway," says Loren Keim, author of "How to Sell Your Home in Any Market."

So while the next buyer may appreciate your luxury accommodations (which could even tip their decision in your home's favor), chances are they won't want to pay the full tab for your remodel.

Bathroom addition

Unless you're a hermit who never entertains, you've probably wished for an extra bathroom now and then.

But bathroom additions require serious coin. For a moderately outfitted addition with synthetic stone or plastic laminate surfaces, figure parting with about $21,695, according to the Remodeling report. Go upscale, with finishes like premium marble or fine tile, and you can easily spend in the neighborhood of $40,710.

Either way, you get about the same return: 53 cents on the dollar. "In the buyer's mind, the additional bathroom isn't worth that additional $20,000 to $40,000," Keim says.

Investigate a less-expensive way to get the same result without flushing quite as much cash. While additions usually cost more, pros might be able to reconfigure your existing space to add a bathroom for less, Alfano says.

Upscale garage addition

Instead of cleaning out the garage, how much would you pay to have a new one built from scratch?

This time, it would have all the organizational built-ins, and a durable, easy-to-clean floor to ensure it would never be messy again. And windows for natural light.

Oh yeah, and you could store a couple of cars in there, too.

The price tag for a top-of-the-line detached two-car with all the trimmings is about $90,053, according to the report. You can expect to recover about 53.6 percent of that when you sell.

"This one is completely decked out on the inside," says Alfano. "It's a dream garage."

And that's likely some of the problem with recovering the value at resale. Says Keim, "You've got a very small target audience out there that wants an upscale garage."

Tri-City home resales, prices on the upswing - Mid-Columbia News | Tri-City Herald : Mid-Columbia news

By the Herald staff and The Associated Press

Homes resales and the median home price in the Tri-Cities continue to increase at a time when median prices in the rest of the state are falling, according to a Washington State University report.

Home sales in Washington surged in the second quarter compared to a year ago, but statewide median prices continued to fall, though the decline was much smaller than seen in recent quarters, says the report by Washington Center for Real Estate Research.

The Tri-Cities registered an increase of 5.5 percent in the median resale price, together with a 33 percent increase in home resales.

It's perhaps the only community in the state to see significant growth, thanks largely to federal stimulus money, said Glenn Crellin, the center's director. The median home price in Benton and Franklin counties was $173,100 in the second quarter.

Stimulus money earmarked for Hanford cleanup has resulted in strong employment and housing markets in the Tri-Cities.

The pending end of federal tax credits for homebuyers clearly boosted sales in the April to June period, the research center said. Statewide, the number of homes sold rose 27.5 percent from the sales rate of the second quarter last year. Sales were up 3.5 percent from the first quarter of this year.

Crellin said nearly every county in the state saw increased sales activity compared with a year ago.
In the Tri-Cities, 1,150 homes were sold from April to June, according to the Tri-City Association of Realtors.

"Our market continues to be steady," said Jeff Thompson, co-owner of Windermere Real Estate Tri-Cities. "We haven't seen a lot of foreclosures," which could have lowered prices.

New homes are being constructed at a reasonable pace to add to the Tri-City housing inventory, Thompson said. At the end of June, 1,018 homes were available for sale.

The local economy continues to draw people into the Tri-Cities, he said. Homes in the $100,000 to $225,000 price range continue to appreciate up to 2.5 percent annually, he said.

In July, about 12 percent of the total homes sold in the Tri-Cities were in the $350,000 and above price range, according to Windermere data.

The inventory of high-end homes in the state is higher, and they tend to move slowly, Crellin said.
Sometimes high-end homebuyers -- who recently have moved into the area -- face a credit squeeze, Thompson said. They are unable to sell their old homes because the housing market in other parts of the country has slowed considerably.

"We need to educate people that the Tri-Cities is different. We are an appreciating market," Thompson said.
The five-county Central Puget Sound region had home sales of 49,980, more than half of the statewide total.
The median sale price during the second quarter was $246,800, which was 6.9 percent less than the median a year earlier, the center said.

The highest median price was $375,500 in King County, which replaced San Juan County as the price leader for the first time in several years. The lowest median price was $107,500 in Columbia County, the center said.

Among the urban areas, the biggest decline was 9 percent in Snohomish County.

Low prices and low interest rates made homes more affordable for households with good credit and reliable jobs, the center said. The housing affordability index showed a slight improvement to 136.4, meaning the median income family had 36.4 percent more income than the minimum required to buy a median price home with a 20 percent down payment and a 30-year mortgage.

The housing affordability index for Benton County was 177.7 and for Franklin County was 148.5.

Read more: http://www.tri-cityherald.com/2010/08/12/1127853/tri-city-home-resales-prices-on.html#storylink=mirelated#ixzz18OpR3n7W

Smartmoney ranks Tri-Cities No. 1 in nation for housing

By John Trumbo, Herald staff writer

A new report on Smartmoney.com lists the Tri-Cities as one of the nation's five brightest spots in an otherwise drab economic landscape.

The online publication's report says the region's four cities will be No. 1 among the five best communities in the nation that will see increases in 2010 fourth-quarter home prices.

The report lumps together Kennewick, Pasco, Richland and West Richland and predicts just under a 4 percent increase in home prices over the same period of 2009, according to Tuesday's website posting on the Wall Street Journal's digital page.

Nationally, average home prices for the fourth quarter of 2010 are expected to fall more than 8 percent, compared with a year earlier, Smartmoney.com noted.

Joining the Tri-Cities on the plus side are four other metropolitan areas with predicted economic promise: Fairbanks with 3.2 percent improvement; Charleston, S.C., with 3.1 percent gain; Corvallis, Ore., up 3 percent; and Anchorage, with 2.7 percent gain.

"This report is consistent with what we've been hearing about our continued growth in the Tri-Cities," said Jeff Kossow, Kennewick's economic development director.

Kossow noted that while other parts of the nation have had hard times and struggled to get through the economic downturn, the Tri-Cities seems to have missed the worst of it.

"We haven't seen the bubble burst and we didn't see the bottom. We are continuing to see people come in and do things here," he said.

As an example, Kossow points to booming construction permits in the city of Kennewick.

This year, 323 permits were issued in January and February, with a valuation of $23,636,609. The same months in 2009 had 213 permits at $9,552,590.

Single-family housing starts in Kennewick for the same months were 59 this year at $13,189,922 and 18 last year for $4,039,764, Kossow said.

"This report follows a CNN money.com article that describes Kennewick among a handful of metropolitan areas that have bucked the trend, by being either flat or posting slight gains," he said.

Kossow quoted CNN: "The biggest winner will be the Kennewick metro area where home prices ramped up 8.9 percent over the past three years and are expected to go up 3.4 percent by June 2010."

CNN also mentioned Fairbanks and Anchorage as strong spots for economic recovery.

-- John Trumbo: 582-1529; jtrumbo@tricityherald.com

Read more: http://www.tri-cityherald.com/2010/03/10/933220/smartmoney-ranks-tri-cities-no.html#ixzz0zjX3dDEo

Tri-City home building on the rebound

By Pratik Joshi, Herald staff writer

Home building in the Tri-Cities is on the rebound, local housing experts say.

In the first quarter, 500 building permits for single-family homes were issued, compared with 169 permits in the same period last year. Total value of the latest permits was more than $112 million, the best since 2005 when 528 single-family home building permits were issued with a combined value of about $100 million.

Last fall, from October through December, 295 permits were given out with a combined value of little over $68 million.

"We expected the first quarter to be good for the Tri-Cities. But the numbers exceeded our expectations," said Jeff Losey, executive officer of the Home Builders Association of Tri-Cities. He said lower interest rates and federal tax incentives are helping the local construction industry.

Nationally, builder confidence in the market for newly built, single-family homes also improved significantly in April as consumers rushed to take advantage of a federal home buyer tax credit set to expire at the end of the month, according to the National Association of Home Builders/Wells Fargo Housing Market Index, released Thursday.

Data released Friday by the U.S. Commerce Department also shows that nationwide housing starts rose for a third consecutive month in March to a seasonally adjusted annual rate of 626,000 units from an upwardly revised February number. The rate of permit issuance for new housing construction also rose by 7.5 percent in March.

Homes under $250,000 remain a hot commodity in the Tri-Cities, Losey said, adding that housing starts in are keeping pace with the growing community. Most of the new construction is in Pasco.

Losey said he doesn't know if the Tri-Cities' housing starts will keep pace in the latter half of the year but is optimistic. Talk of the national economy reviving will surely play out locally, he said, and eventually also may help sell higher-end homes.

As that happens, people who recently have moved here and are waiting for their old homes elsewhere to sell will be able to get out of rental homes and buy their dream house, said Don Pratt, president of Don Pratt Construction, which specializes in expensive homes.

It may take six months to a year before the inventory of homes priced $400,000 and up is cleared, said Pratt, who's building six custom homes for clients.

He said he believes the community will need more houses at varying price points to keep up with the demand once the recession is over.

Most communities in Washington have seen an increase in single-family housing starts, but the Tri-City market has the best performance, said Joel Hill, Pasco-based project manager for Aho Construction, which since its inception in 1987 has built and sold more than 8,000 homes in the state. "The Tri-Cities is a fabulous place to raise a family and to retire."

Aho Construction has had 50 housing starts -- mostly in Pasco -- in the first three months of the year, Hill said. "That's up 20 percent from the same period last year," he said. The average cost of Aho homes is about $180,000.

Hill said his company was the first to build homes near Road 68 about 15 years ago.  "We saw the great potential of the area," he said. A majority of Aho homes buyers are either first-time buyers or retirees looking to downsize, he said.

Losey said the area between roads 68 and 100 in Pasco is the primary building corridor in the Tri-Cities. It's inexpensive because it's fairly easy to level it in absence of any hills, Losey said. And the opening of a new high school in the area has made it more attractive, he said.

Olin Homes, which has been building homes in Southwest Washington since 1962, has so far built and sold 12 homes in the Tri-Cities this year, up from eight in the first quarter last year, said Ivan Olin, its Vancouver-based office manager.

"We have sold another 45 homes that are under construction mostly in the Tri-Cities." Olin also is building four spec homes in Battle Ground, north of Vancouver, and four custom homes for clients in other parts of Southwest Washington.

"Last year, we were nervous like everyone else, especially in the first quarter," Olin said. His company ended up building and selling 74 homes in the Tri-Cities last year, said Olin, whose father Ron founded the company. The company's homes cost from $137,000 to $220,000 in the Tri-Cities, and from $182,000 to $340,000 on the west side.

Olin said the local housing market starts look healthy because the Tri-City economy stayed strong and home prices remained stable. Prices never escalated the way they did elsewhere. "We're building to (fulfill the needs) of homeowners, not investors."

It's reassuring for builders that the Tri-City market will continue to prosper in the year ahead, said Olin and Hill.

-- Pratik Joshi: 582-1541; pjoshi@tricityherald.com; Business Beat blog at www.tricityherald.com