Kitchen remodels offer big paybacks at resale

CHICAGO – Sept. 29, 2017 – Homeowners looking for a remodeling project may be smart to tackle a kitchen renovation if they’re looking for projects with the strongest buyer appeal and higher returns on their investment at resale.
Kitchen renovations and upgrades are among the top remodeling projects most likely to add value to a home at resale and most likely to appeal to home shoppers, according to the 2017 Remodeling Impact Report, conducted by the National Association of Realtors® (NAR). The report takes a look at the cost of the most common exterior and interior remodeling and replacement projects and gauges how much appeal they have to buyers at resale.
Fifty-four percent of Realtors surveyed reported suggesting to sellers that they complete a kitchen upgrade before attempting to sell; 23 percent of real estate pros also said a kitchen renovation helped to close a sale.
The Remodeling Impact Report estimates that homeowners stand to recover 57 percent – or $20,000 – of the $35,000 or so of the cost to take on a kitchen upgrade. The kitchen upgrade might include adding new energy-efficient appliances, sink, faucet and vinyl flooring; repainting the walls and ceiling; and refacing cabinets with cherry veneer and new hardware.
Kitchen upgrades don’t just offer the potential for some bang for your buck at resale but also have been found to make homeowners happier. Eighty-one percent of remodeling consumers surveyed said they had a greater desire to be at home since completing their kitchen upgrade project, and 81 percent felt a major sense of accomplishment after the renovation.
The following interior projects Realtors ranked highest to lowest as remodeling projects that would appeal to home buyers (listed along with project estimate costs and the potential return on investment at resale):
1. Complete kitchen renovation
Cost estimate: $65,000
Realtors estimated cost recovered: $40,000
Percent of value recovered from the project: 62%
2. Kitchen upgrade
Cost estimate: $35,000
Realtors estimated cost recovered: $20,000
Percent of value recovered from the project: 57%
3. Bathroom renovation
Cost estimate: $30,000
Realtors estimated cost recovered: $15,000
Percent of value recovered from the project: 50%
4. New wood flooring
Estimated cost: $5,500
Realtors estimated cost recovered: $5,000
Percent of value recovered from the project: 91%
5. Add new bathroom
Cost estimate of project: $59,000
Realtors estimated cost recovered: $29,750
Percent of value recovered from the project: 50%
6. Hardwood flooring refinish
Estimated cost: $3,000
Realtors estimated cost recovered: $3,000
Percent of value recovered from the project: 100%
7. New master suite/owners’ suite
Cost estimate: $125,000
Realtors estimated cost recovered: $65,000
Percent of value recovered from the project: 52%
8. HVAC replacement
Estimated cost: $7,475
Realtors estimated cost recovered: $5,000
Percent of value recovered from the project: 67%
9. Basement conversion to living area
Cost estimate: $40,000
Realtors estimated cost recovered: $25,000
Percent of value recovered from the project: 63%
10. Closet renovation
Estimated cost: $3,750
Realtors estimated cost recovered: $2,000
Percent of value recovered from the project: 53%
11. Insulation upgrade
Estimated cost: $2,100
Realtors estimated cost recovered: $1,600
Percent of value recovered from the project: 76%
12. Attic conversion to living area
Estimated cost: $75,000
Realtors estimated cost recovered: $40,000
Percent of value recovered from the project: 53%
© Copyright 2017 INFORMATION INC., Bethesda, MD (301) 215-4688

Puerto Rico Realtor: ‘Worse than anything you’ve seen on TV’

SAN JUAN, Puerto Rico – Sept. 27, 2017 – “It’s literally like the whole island was bombed,” says Puerto Rico Association of Realtors® Executive Director Marcos Vilar on the widespread devastation left behind by Hurricane Maria.
The real estate community in Puerto Rico is working frantically to help deliver emergency supplies to the island’s 3 million residents, most of whom are in total darkness – without electricity, clean water, or adequate shelter – a week after Hurricane Maria left the entire nation in catastrophic ruin.
“Devastation is everywhere,” says Vilar, who along with other association executives got temporary cellular coverage in order to speak by phone.
The Puerto Rican government is trying to restore electricity by delivering diesel fuel and generators to residents, but service is inconsistent and only available sporadically during the day. Full restoration of electricity may take a year, according to reports.
“Homes that were reinforced with concrete were snapped in two like toothpicks,” Vilar says. “Trees are down. There’s no electricity. It’s heart-breaking.”
Vilar, Puerto Rico Association of Realtors President Eduardo Santos and President-elect Eddie Lopez were assessing damage to the association’s headquarters on Monday. They said the building suffered extensive water damage after Maria – which hit the island as a Category 4 storm, packing sustained winds of 155 mph – ripped off its roof and mangled its air conditioning system. Real estate professionals in Puerto Rico were cleaning up the association building Monday morning, even as their own homes suffered similar damage.
“We came to our building to try to start cleaning up the headquarters,” Lopez says. “Then we can help our membership and their families.”
Mike Ford, broker-owner of Coldwell Banker Heritage Homes in West Memphis, Ark., and a 2015 NAR vice president, has maintained close contact with Puerto Rico association executives. Ford is working to identify their most immediate needs and has been coordinating the delivery of a generator to the association building. Once power is restored there, the office will serve as the main point of contact for Realtor relief efforts, Ford said.
“Some of our members lost everything – their car and home,” Santos says. The full extent of the damage from the hurricane remains unknown, and the association thus far has been unable to communicate with its members.
“Everyone in Puerto Rico has been affected in some way,” Ford says. “Everybody had damage to their homes.” He shared a text message he received from one Puerto Rican Realtor who returned to the island after Maria: “I wasn’t prepared for this. This is worse than anything you’ve seen on TV.”
The Guajataca Dam in the northwestern part of the island still threatens to wreak even more calamity. The dam suffered wall cracks during the hurricane and threatens to flood the homes of about 70,000 people living nearby, all of whom have been evacuated. Rebuilding efforts for Puerto Rico will be extensive. AIR Worldwide, a catastrophe-risk-modeling firm, estimates that Hurricane Maria caused between $40 billion and $85 billion in insured losses on islands across the Caribbean.
The storm is only the latest major hardship for Puerto Rico, which has been in economic recession for the last 11 years. Its housing market posted a record number of foreclosures last year and was on par to top that this year. However, the real estate market had been rebounding in recent months, with more buyers from the American mainland purchasing second homes or investment properties on the island. But only about 50 percent of houses in Puerto Rico, which is a U.S. territory, are covered by insurance policies that protect against wind damage, according to AIR Worldwide.
Hurricane Maria “is going to be a huge setback to the island,” Ford says. “It will be a long time after this tragedy until normal life is restored to this beautiful island.”
Hurricane Maria was the latest of three massive hurricanes – including Hurricanes Harvey and Irma – to strike in the Caribbean and U.S. in the past month.
“We’ve never had three catastrophic events happen back-to-back in less than a month,” says Patty Garcia, managing director of the Realtors Relief Foundation. “There’s a need for donations. We are currently working with the Puerto Rico, Florida and Virgin Islands Realtor associations. We are in touch with the leaders in those areas. We’re going to try to help the most we can. We know a lot of help is needed.”
Source: Melissa Dittmann Tracey, Realtor Magazine
 

Homes built to stricter standards fared better during Irma

MIAMI – Sept. 19, 2017 – As homeowners in Florida begin to take stock of the damage from Hurricane Irma, industry observers note that homes built to the state’s stricter building codes seem to have fared better.
The feedback we’re hearing is positive,” says Rusty Payton, chief executive of the Florida Home Builders Association. “We’re all interested and there will be a deep dive. It appears that it did its job.”
Bill Wheat, executive vice president and chief financial officer at home builder D.R. Horton Inc., says his company’s early assessments “indicate that the more recent building standards post-Andrew over the last 20 years have held up relatively well.”
The evidence so far is preliminary, however. Insurance companies, home builders, city and county officials and local resiliency experts say they are still conducting assessments of how homes and commercial buildings built to different standards held up during Irma.
Florida has one of the strongest building codes in the country. Passed statewide in 2002 after Miami-Dade County beefed up regulations in the wake of Hurricane Andrew in 1992, the new rules required newly built homes to have stronger fasteners that prevent their roofs from blowing off, nails instead of staples, and impact-resistant windows in certain areas.
Florida passed a bill this spring that gives the Florida Building Commission flexibility to evaluate whether or not to make code changes to keep up with technological advancement and removed a requirement that it adopt International Code Council standards every three years.
Topics: Wall Street Journal (09/18/17) Kusisto, Laura; Campo-Flores, Arian

Study: Homeowners will pay most Irma damage out of pocket

MIAMI – Sept. 22, 2017 – It will be years before the true cost of Hurricane Irma is clear, but a team of Florida International University (FIU) researchers estimates that the storm’s winds alone will set the Sunshine State back $19.4 billion.
Of that total, FIU’s researchers said, $6.3 billion of the bill goes to insurance companies, leaving homeowners to shoulder the other two-thirds of the losses. The worst hit areas are in Lee and Collier counties, where Irma came ashore.
“This is not surprising given the high level of hurricane deductibles and the less intense tropical storm in most of Florida,” Shahid Hamid, the FIU business professor who heads the research team, said in a statement.
Hamid’s team used the Florida Public Hurricane Loss Model – Florida’s benchmark for assessing insurers’ financial risks and setting premiums insurance customers will pay – to calculate the cost to homeowners. The estimate is based on preliminary wind data from NOAA and will change as better information is available.
Flood loss will add another couple billion to the total damage amount, researchers said.
FEMA’s National Flood Insurance Program estimates insured residential flood loss under the program will be around $5 billion to $8 billion. Insured commercial flood loss, most of which is covered by private insurers, could cost around $4 billion to $8 billion.
A study by information company CoreLogic showed the storm’s damage to the U.S. is estimated to be between $42.5 billion and $65 billion.
Copyright © 2017 Miami Herald, Alex Harris. Distributed by Tribune Content Agency, LLC.

An unusual rental agreement in exchange for a downpayment

SEATTLE – Sept. 21, 2017 – Entrepreneurs in Seattle have come up with an idea to help aspiring home buyers overcome the downpayment obstacle: They’re offering downpayments to people who are willing to be an Airbnb host for up to three years by renting out a room in their new home.
The company, Loftium, provides prospective home buyers with up to $50,000 for a downpayment, but the buyer must be willing to continuously list an extra bedroom on Airbnb for one to three years. Homeowners also have to share most of the income they generate from that rental with Loftium during that time.
“It’s for the people who don’t have the parents to help, or the high income to save while paying rent,” cofounder Yifan Zhang told The New York Times. “They are just stuck trying to save for a decade or more before they give up.” Zhang says there are about 40 cities other than Seattle where they believe their service could help prospective buyers. She says they hope to expand to Chicago, Denver, or Raleigh, N.C., within a year.
Although the approach is different, other companies are looking to help fill the downpayment gap. With many would-be buyers burdened with high student loan debt, mortgage financing giant Fannie Mae said this year it would be more forgiving of prospective home buyers whose employers or parents were helping pay down their student loans.
“Many renters struggle to generate savings in the current environment of high rental rates and student debts,” says Jonathan Lawless, vice president of customer solutions at Fannie Mae. “As opposed to what happened in previous generations, there is almost a fear associated with it because they have this really big debt.”
Fannie Mae told The New York Times that it has an interest in working with Loftium as it expands to more cities on its downpayment program, but it wants to first ensure there is strong enough demand for the service. Currently, buyers who use the program will be able to apply downpayments only to mortgages financed by Umpqua Bank, but Loftium says it plans to offer a broader range of lenders soon.
By using Loftium, buyers must list their extra room year-round for up to three years, with eight “freebie” days reserved for their own use. Loftium determines the size of the downpayment they’ll grant using an algorithm that predicts how much income a room can generate.
Homeowners then pay back Loftium through a revenue-sharing agreement. The company will collect about two-thirds of the monthly income generated. The company will not penalize homeowners if the room isn’t booked enough to generate the expected income.
“We are trying to put as little risk on the homeowner as possible,” Zhang says. “That money up front is yours as long as you abide by the contract.”
Homeowners who want to stop renting the room before the contract ends will be required to pay their share of the nights remaining as well as an extra 15 percent premium on that amount within a week, according to the contract. Loftium can put a second lien against the property if a homeowner fails to pay what is owed.
Source: “A Down Payment with a Catch: You Must be an Airbnb Host,” The New York Times (Sept. 18, 2017

Hurricane Irma damage could be as high as $65 billion

MIAMI – Sept. 20, 2017 – Hurricane Irma’s monstrous 185 mph winds seemed to be the biggest menace as the storm inexorably made its way toward Florida earlier this month. But according to a study by the information company CoreLogic, flooding wreaked the costliest damage to homes and businesses in the storm’s path.
According to the analysis, the total insured and uninsured loss for both residential and commercial properties is estimated to be between $42.5 billion and $65 billion.
CoreLogic estimates total flood loss for residential properties in Florida, Alabama, Georgia, North Carolina and South Carolina to range between $25 billion and $38 billion.
Of this flood total, insured residential flood loss covered by FEMA’s National Flood Insurance Program is estimated at $5 billion to $8 billion. Uninsured residential flood loss – 80 percent of the total flood damage – is estimated at $20 billion to $30 billion.
Insured commercial flood loss is estimated at $4 billion to $8 billion, most of which is covered by private insurers.
Wind damage, which is typically covered by insurers, was estimated to be between $13.5 billion to $19 billion. Residential losses ($11 billion to $15 billion) accounted for the bulk of that amount.
Copyright © 2017 Miami Herald, Rene Rodriguez. Distributed by Tribune Content Agency, LLC.

Scott declares emergency as hurricane threatens

TALLAHASSEE, Fla. – Sept. 5, 2017 – Gov. Rick Scott on Monday placed all of Florida under a state of emergency as the projected path of Hurricane Irma could take the powerful storm toward the southern part of the state by the end of the week.
The declaration is intended to give local governments in all 67 counties time to prepare, the governor’s office said.
“Hurricane Irma is a major and life-threatening storm and Florida must be prepared,” Scott said in a statement.
“Today, given these forecasts and the intensity of this storm, I have declared a state of emergency for every county in Florida to make certain that state, federal and local governments are able to work together and make sure resources are dispersed to local communities as we get prepared for this storm,” he added.
Scott has been advising people the past couple of days – through Twitter – to prepare for the storm by visiting the Florida Department of Emergency Management’s disaster page, which focuses on individuals, businesses and special needs Floridians.
“Families should take time today to make sure you have a disaster plan and fully-stocked disaster supply kit,” Scott tweeted on Monday. “I am continuing to coordinate with emergency management officials as we monitor Hurricane Irma.”
Hurricane Irma continues to fluctuate, but it’s a Category 5 storm that may diminish only slightly if it passes over Caribbean Islands. The storm was moving towards the west at 13 mph, but most experts predict it will start to turn – but no one knows yet when that will happen. The National Hurricane Center said Monday that while it’s too early to determine where the storm will go, “There is an increasing chance of seeing some impacts from Irma in the Florida peninsula and the Florida Keys later this week and this weekend.”
Price gouging
Attorney General Pam Bondi also activated Florida’s price gouging hotline for all consumers in Florida law prohibits extreme increases in the price of essential commodities, such as food, water, hotels, ice, gasoline, lumber and equipment needed as a direct result of an officially declared emergency. Anyone who suspects price gouging during this declared state of emergency should report it to the Attorney General’s Office by calling 1-866-9-NO-SCAM.
Association and business preparations
Businesses should also be prepared for a storm to make sure operations can continue afterword. Following the series of storms in 2004, Florida Realtors created a preparation plan for local associations, though the recommendations generally apply to brokers too. For more info on other Florida Realtors efforts, including its tax-deductible Disaster Relief Fund, visit the website.
“In Florida, we always prepare for the worst and hope for the best, and while the exact path of Irma is not absolutely known at this time, we cannot afford to not be prepared,” Scott said in Monday’s statement. “This state of emergency allows our emergency management officials to act swiftly in the best interest of Floridians without the burden of bureaucracy or red tape.”
Source: News Service of Florida, Jim Turner

4 ways to cut kitchen remodeling costs

NEW YORK – Sept. 1, 2017 – Kitchen remodels don’t come cheap. The average cost to update a 200-square-foot kitchen – including installing new flooring, semicustom wood cabinets, and standard appliances – is a whopping $62,000, according to Remodeling Magazine. Homeowners who want more luxurious touches, such as stone countertops, a commercial-grade cooktop, designer faucets and top-of-the-line custom cabinets, may pay as much as $123,000.
Before clients gut their kitchen, however, advise them to consider more affordable options that can still make a big impact at resale. The New York Times spoke with designers to get some of their best budget-friendly tips for kitchen remodels.

  • Try painting or resurfacing cabinets instead of replacing them
    “A bold color and modern hardware can breathe new life into old, ordinary cabinetry,” interior designer CeCe Barfield Thompson says. She gave her own 1990s-era kitchen a makeover by painting the cherry wood cabinets a smokestack gray. She also covered pea-green tile floors with a parquet charcoal laminate surface. She says the renovations cost her $7,050, which included the labor, laminate flooring, paint and new cabinet handles and drawer pulls.
  • Reface or resurface dated cabinets
    This technique keeps the existing cabinet framework and replaces the doors, drawer fronts and side panels. New York-based designer Carolyn DiCarlo, who used this approach when working on a Manhattan loft, says new cabinets would have cost about $22,000 – but the price to reface was just $2,500.
  • Consider alternative materials for countertops
    Instead of choosing high-end items such as quartz or stone, go for less expensive options such as butcher block. This material can be purchased for as low as $99 in standard sizes. “It’s kind of like having a built-in cutting board throughout your kitchen,” says Kimberly Winthrop, an interior designer in Santa Monica, Calif. She says she paid $500 for a 20-foot butcher block to use in a recent kitchen makeover. But it requires some maintenance: Butcher block typically needs to be sanded and oiled twice a year.
  • Keep the layout intact
    “Moving walls, electrical and plumbing is where installation costs spike,” says Dana Hudson, divisional merchandising manager for kitchens at Home Depot. Mina Fies, a Reston, Va.-based designer and creator of RenovationRoadmap.com, recalls a client who wanted to reconfigure the kitchen walls to allow for more natural light. The layout changes would have required moving plumbing. Fies says she was able to show the client a design that met her needs but did not open up the walls, instead installing recessed lighting, pendant lights and under-cabinet lighting that saved the client $8,000.

Source: “Seven Ways to Save on Your Kitchen Renovation,” The New York Times (Aug. 11, 2017)

Reminder: It takes 30 days to get flood insurance

WASHINGTON – Aug. 30, 2017 – As massive floods from Tropical Storm Harvey sweep Texas, you might be wondering how fast you can buy flood insurance. Home insurance doesn’t pay to repair damage caused by flooding. You’ll need to buy separate flood insurance to cover tropical storms, torrential rain and overflowing rivers.
It’s smart to buy flood insurance before flooding becomes imminent, as there’s usually a waiting period between the time you buy your policy and the time it takes effect. However, there are a few situations in which coverage can kick in without a delay.

Waiting period for flood insurance

If you buy your policy through the National Flood Insurance Program (NFIP), coverage will kick in 30 days from the purchase date.
The waiting period might be shorter – around 10 to 14 days – if you buy private flood insurance. But not all states and communities have private sellers, so ask your home insurer or agent about options in your area.
If flooding occurs during the blackout period, your policy won’t pay to fix damage to your home or belongings.

When the waiting period doesn’t apply

The following scenarios are exceptions to the NFIP waiting period, according to the Federal Emergency Management Agency (FEMA):

  • You already have flood insurance and increase your coverage at renewal time. The new limits will take effect once your old policy expires.
  • You buy flood insurance within 13 months after your home is added to a Special Flood Hazard Area. The waiting period is one day in these cases. Visit FEMA’s Flood Map Service Center to find out if your home is in such a hazard zone.
  • Your home sits on burned federal land and post-wildfire conditions put your property at an increased risk of flooding. There may be no waiting period if you buy your policy within 60 days of the date the fire is contained.
  • You buy flood insurance in relation to getting, increasing, extending or renewing your mortgage. There’s no waiting period in these cases.

There might also be exceptions to the waiting periods for private policies, including if you’re switching from an NFIP policy to a private one. Ask your insurer for more details.

Last-minute coverage for your car

Flood insurance doesn’t extend to your vehicle. If your car suffers flood damage, comprehensive car insurance pays for repairs.
Car insurers generally won’t sell new coverage if your area is under a storm watch. If that hasn’t happened yet, ask your insurer about adding comprehensive coverage to your policy. Provided you’re able to buy a policy, there won’t be a waiting period.
© Copyright 2017 The Steuben Courier Advocate, Alex Glenn. All Rights Reserved. Alex Glenn is a staff writer for NerdWallet, a personal finance website.