Bet on These Home Improvements in 2015

If you're considering giving your home an upgrade this year, it can be overwhelming to choose what home features need an overhaul. Trends seem to change all the time, and the last thing you want is to spend money on costly improvements that will soon be out of date.

What's Hot In Design?

21 Hot Housing Trends for 2015

Designers, Builders Reveal Hot Trends for 2015

The Next Big Home Feature Buyers Want?

Real estate brokerage Redfin recently analyzed home features that are most desirable to potential home buyers. First, they asked local real estate agents to take note to what features were cropping up the most on home tours. Then they searched for those design keywords and took note of what trends experienced the most growth in popularity in the last five years.

So what seven home improvements made their list of the safest bets?  

1. Quartz Countertops: For years it was all about the granite counters, but it appears that quartz is all the rage these days for buyers. According to Redfin, quartz has experienced a huge increase since 2012, due to its durability and overall buyer granite fatigue.
2. Smart Homes: While Smart Home design is overall still a niche with buyers, it's a phrase that has experienced an explosion in listing mentions since 2012. Redfin agents caution that buyers really need to choose a smart home system with the most up-to-date software since smart home technology is rapidly evolving.
3. Stainless Steel Appliances: This trend is here to stay, and it has only increased in popularity since 2011. According to a Redfin agent, stainless steel is "the gold standard for kitchens these days" and it appears to be a very safe home improvement bet.
4. Fire Pits: Buyers are still interested in turning their backyards into relaxing areas with multiple focal points that encourages interaction and socializing, and adding a fire pit remains a popular upgrade.
5. Tasting Rooms: In the high-end and luxury market, the term "tasting" has slowly increased in listings over the last five years. In the past, buyers hid their wine cellars away from the main focal point of the house, but these days they're requesting tasting rooms that are adjacent to the main socializing rooms of the house, such as the kitchen and living rooms.
6. Outdoor Kitchens: Along with fire pits, outdoor kitchens and multi-use backyard areas have only gained in popularity, especially for high-end buyers who mention socializing in the home as a priority. According to Redfin, "Backyards are becoming places to lounge during the summer, with full kitchens, fireplaces and televisions."
7. Freestanding Tubs: The days of the space-saving combined shower and tub are over, at least for luxury buyers. Redfin reports that the term "freestanding tub" has increased dramatically since 2011, as buyers want a bathroom that's more reminiscent of a spa.

And lastly, one trend that is seemingly on its way out? Exposed brick. According to Redfin, mentions of exposed brick in listings peaked back in 2013, and they caution that other than loft homes, buyers' interest in exposed brick is waning.

Source: "7 Home Improvement Projects That Are a Safe Bet for 2015," Redfin (Feb. 4, 2015)

Survey: Investors Prefer Flipping Over Renting

A nationwide survey conducted by Auction.com, a leading online real estate marketplace, showed a continuation in January of a trend seen in the fourth quarter of 2014 – that of investors' preference to flip houses rather than rent them out.

Even as the demand for rental housing has increased in most markets, investors continue to prefer to flip houses due to a recent combination of price appreciation and decreased inventory, according to Auction.com. About 50.2 percent of investors surveyed in January said they preferred to flip the homes they purchased, while 47.5 percent said they prefer a hold-to-rent strategy (2.2 percent surveyed said they were undecided). These percentages were little changed from Q4.

"Considering recent reports that have suggested a shortage of rental units in some metropolitan areas, we'd expect to see more investors starting to move toward a buy-and-hold strategy to address this market opportunity," Auction.com EVP Rick Sharga said. "We know anecdotally that some flippers purchase homes specifically to sell them to other investors who repurpose the properties as rental units. But, it will be interesting to see if more investors move away from flipping and towards rental strategies over the next few months if demand for rental housing continues to rise."

Though the survey found that more investors preferred flipping over renting overall in January, the results varied according to the investor profile and the type of auction (live versus online). Among investors making a one-time purchase, 67.5 of them preferred a hold-to-rent strategy compared to 29.1 percent who said they preferred to flip. The majority of real estate investors preferred flipping over renting (51.7 percent to 46.3 percent), while investors working on behalf of another investor also showed a propensity toward flipping over renting out the properties they purchased (60.2 percent compared to 37.6 percent).

Investors who purchased their properties through live auctions appeared to show a preference toward flipping in January. Flipping was the preferred strategy over renting in all but two of the 10 states where Auction.com conducted live events during the month: Georgia and Missouri. The state with the highest percentage of investors who purchased properties at live auctions and preferred flipping was California, with 74.3 percent compared to 20 percent who said they would rent. Overall, 56.2 percent of investors who purchased properties at live auctions in January said they preferred to flip, compared to 41 percent who said they intended to rent the properties out.

Meanwhile, 54.9 percent of investors surveyed in January who purchased properties through online auctions said they intended to rent, compared to 43.4 percent who said they preferred flipping.

Author: Brian Honea February 12, 2015 http://dsnews.com/news/02-12-2015/survey-investors-prefer-flipping-renting

Adding Health and Wellness to Office Space

Building owners and property managers can leverage technology, amenities, and infrastructure to help tenants create a best-in-class health and wellness experience for their employees.

FEBRUARY 2015 | BY MIKE MCKEOWN

Today’s workforce is more health conscious and tech savvy than ever before. As more attention is paid to these topics, building design and performance will play a critical role in creating a competitive advantage for those offering healthier office environments.

Programs like the Delos Well Building Standard are laying the groundwork for more formal ways to measure and certify the well-being aspects of buildings. But outside of certification, there are more basic changes that building owners and property managers can consider to evolve their real estate offerings. Three areas to focus on are infrastructure, technology, and amenities.

Infrastructure

A building is only as strong as its foundation. Are you leveraging your current infrastructure? Do you have the proper data on mechanical, engineering, plumbing, and HVAC performance to understand the return on investment of reduced energy consumption? Sometimes simply sharing that data with tenants can yield results: A recent study conducted by Washington State University found that effective training on the features in high-performance buildings led to higher satisfaction in the work environment. Aspects of well-being that can be directly impacted by proper infrastructure include regulated temperature control, appropriate lighting levels, and indoor air quality.

Many building owners are also retrofitting spaces to accommodate raised floor systems — which provide healthier, more energy-efficient air distribution — and individual occupant temperature control. In my experience surveying thousands of building occupants, complaints about poor air quality and lack of personalized temperature control rank among the most common. Investing in these upgrades can give you a leg up on the competition.

Technology

As tenants continue to look for ways to customize how they interact with their surroundings, they will expect technology to pave the way. The personalization of lighting and temperature control is becoming ubiquitous, but what else might we see in the future? Organizations may begin to use gamification techniques on a broader scale to help measure health and well-being metrics. For instance,many companies already help their employees to track metrics such as steps they take each day, then create healthy competition to measure and increase performance. But there is also potential for an entire building to measure occupants’ overall steps (or a reduction in elevator usage) and compare that to other comparable properties. As a building owner, it could be a powerful message to say that your building helps encourage people to walk more, and be able to back it up with hard data. One company I’ve worked with added digital displays in the stairwells to track real-time data on how many total steps were taken on a daily basis. Imagine scaling up that concept for an entire building.

Digital displays can also provide educational content, such as nutritional information in the cafeteria, exercises that can be done in the office, reminders to drink more water, and notices of how many calories one can burn by walking around the building. Studies show that having more access to health data on a regular basis can motivate people to change their behaviors.

Amenities

Amenities can be a huge selling point to potential tenants in an existing building, and should be fully explored when developing a new property. As a starting point, do your homework. For instance, if your building doesn’t have a fitness center, are there other facilities nearby that can provide discounts to your tenants? This can often be a more cost-effective compromise if it is too difficult to add space in an existing building. Also, while some buildings restrict access to stairwells for security reasons, opening these areas up can provide a healthy alternative to taking the elevator. The majority of building occupants I have surveyed note that having access to walk the stairs as a form of exercise (on their lunch break, for instance) would be a highly desirable amenity. Consider upgrading the finishes and lighting in the stairwells to give them an even more inviting feel. Newer construction is implementing more stairwells positioned near the exterior, with views to the outside.

While many people think of amenities as traditional add-ons, such as cafeterias and fitness centers, it’s important to look for other ways to improve the overall quality and convenience of life for your tenants. Examples include ample and safe bicycle storage, access to and integration with the outdoors, day care and pet care services, car maintenance, and dry cleaning. While these amenities may not make your tenants physically healthier, they can help alleviate some of the stress in their lives. Anything you can do to improve the overall quality of life for your building occupants is a step in the right direction. And if you can’t make these adjustments directly in the building, reach out to the business community to look for strategic partnerships and creative solutions to provide more valuable amenities. 

Of course, such changes do little to bring in new tenants if they’re not shared with the community, so you need to get the word out on the street about all these great steps you are taking. Look for ways for your building to be more integrated with the community and leverage this for PR purposes. Can you open a common area in your building for community yoga classes, sponsor a “climb the stairs” charity event in your building, or put your energy savings toward other local health initiatives? These types of investments can create an engaging story in the real estate community and beyond.  

What to Look for in a Property Manager

Property management companies make it easy for professional landlords and investors alike to own and manage rental properties. But it’s important to choose the right one.

FEBRUARY 2015 | BY BRENTON HAYDEN

It’s not enough to hire just any property management company. It’s important to find one that’s professional, reputable, and well established. We’ve all heard horror stories—such as this one about a property manager in Niagara Falls who dropped the ball on one of the rentals that he was supposed to be managing, allowing his buddy to crash in one of the units rent-free. Not only did this cause the landlord to miss out on valuable rental income each month, the freeloading friend attracted a number of unsavory types to the premises, and soon a steady stream of would-be criminals were frequenting the complex.

Despite the frightening stories, the reality is that many property management companies are solid and reputable. A good company will manage your properties efficiently, with a high level of care. But a great property management company will be able to help you to get the most out of your investment.

The good news is that finding a reliable property management company isn’t a matter of luck; it’s about knowing what to look for. Here are a few defining characteristics that all professional property management companies have in common.

A Solid Reputation

First and foremost, a professional property management company should have a solid reputation. These days, it’s easier than ever to conduct research on a company, so head online to do your homework before hiring anyone. Look up the company on the Better Business Bureau website and make sure they have a good rating. Research the state or local governing agencies for the industry in your area. Check out online review sites, and read what people are saying. Run a quick Google search to see if there are any negative blog posts or threads in forums. People talk, and they are especially inclined to share bad experiences online. Chances are, if the business is less than reputable, you will find evidence of that in your research.

Formal Tenant Screening Procedures

One bad tenant can cause a great deal of chaos for any landlord. A reputable company should have a solid tenant screening procedure in place to help prevent that situation. Find one that conducts background checks, reference checks, and credit checks. It’s also worth ensuring that it has airtight antidiscrimination policies in place to protect you in case a tenant alleges unfair treatment.

Extensive Experience

The average lifespan for property managers is only nine months in the business. Someone who’s new to the game could easily make mistakes that could end up costing you money. For example, an inexperienced property manager could end up calling in a professional electrician for minor maintenance issues that could have been better left for a handyman. These seemingly insignificant errors can quickly add up. Your best bet is to find a property management company that’s well established and that employs experienced professionals who are able to make smart decisions on your behalf.

A Track Record of Short Vacancy Periods

Watch out for property management companies with long vacancy times in between tenants. Ask them how fast are they able to get properties on the market. A property management company with an excellent vacancy rate will be happy to share this information with you, and they may even advertise it on their website.

A Large Client Base

Beware of the property manager with no clients. This could be a sign of someone who has trouble managing rentals and keeping tenants in units. It could also show laziness or disorganization. When vetting property management companies, don’t be afraid to ask for references, and look for one that has an extensive client base. Not only will this verify their capabilities, there’s also a good chance that this company will be well connected with local contractors and better able to find the best deals on maintenance and repairs.

Strong Policies

Policies can tell you a lot about a company. Any legitimate company will have processes in place and will be happy to share many of them with you. Ask about their systems, and make sure they look solid. It’s also a good idea to find out if they offer any routine maintenance service for rentals because that can help to prevent minor issues from escalating into the need for major repairs. Ask about their system for collecting past-due rent, and what their protocol is for after-hours emergencies. Make sure their solutions are in line with your needs.

The Ability to Provide Written Contracts

An unwillingness to provide a written contract could be a sign of trouble or at least an indication that the company doesn’t have its act together. A reputable property management company will be more than happy to provide you with a contract outlining its terms and conditions as well as pricing and fees. This will help to keep both parties on the same page, and will outline clear expectations, so nobody is left in the dark.

It’s worth the time and effort to fully vet potential property management companies. After all, it’s not just about keeping yourself out of trouble. It’s about finding a company that can help you to get the most out of your rental property.

Have you had experience with property managers, good or bad alike? Share your experiences in the comments.

January 2015 National Housing Trends Newsletter

Angela Yglesias

Levesque Realty 

Cell: 805-490-4944   
Phone: 805-490-4944 

Housing Trends January 2015 View archives

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Existing-Home Sales Rebound in December, 2014 Total Sales Finish 3 Percent Below 2013

WASHINGTON (January 23, 2015) – Despite low inventory conditions, existing-home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of Realtors®. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1 percent from 2013.

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Ready for a Jolt to the Housing Market?

The strengthening of the economy will drive the housing market forward this year and make up for last year’s "unspectacular” housing activity, according to Fannie Mae’s Economic & Strategic Research Group’s report, released Thursday. Stronger wages for many Americans likely will lead to a higher rate of household formation in 2015, Fannie researchers note.

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Existing home sales (January)

5.04 millions units*

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$209,500

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1.089 millions units*

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4.38 millions units*

*Seasonally adjusted annual rate. Source: NATIONAL ASSOCIATION OF REALTORS®.

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3rd Qtr 2014

+64.4%

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The homeownership rate in the third quarter 2014 was 64.4 percent, down 0.9 (+/- 0.4) percentage points from the third quarter 2013 rate of 65.3 percent. The homeownership rates in the Northeast, Midwest and South were lower than the rates in the third quarter 2013, while the rate in the West was not statistically different from the rate a year ago.

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