BEFORE YOU GET TOO EXTREME WITH YOUR HOME MAKEOVER, READ THIS!

I am often asked by homeowners what improvement projects provide the best return on investment.  This is especially true when one is about to put their home on the market for sale.  Since it is unlikely Ty Pennington will show up at your door with his design team and crew of 100 volunteers, you should be judicious in deciding what projects to undertake to attract buyers or simply improve the value of your home over the long term.

If you are going to be selling your home, I can make this real easy.  Follow the TCP Principle – THROW stuff out (do you really want to pay too move all those items you won’t use in your next house either?); CLEAN as if your life depends on it (I’m not sure anything impresses buyers more than a spotless house); and PAINT (it is amazing the return you can get on the cost of a gallon of paint in what a buyer will pay you for your castle).  And speaking of paint, for goodness sake be a little bolder than off-white, egg shell, or snow blizzard.  There is neutral and then there is sterile and boring!  Even surgical centers are adding color.  Go to a paint store and ask what colors are popular, but not too trendy.  Using colors with some depth provide a nice contrast between the walls and the trim and ceilings, and will result in photographs that will “pop” in the critical on-line marketing program used to promote your home.  This will get more buyers to your house, and they will be impressed with the warmth you have created for them in their next home!

For larger projects, an excellent resource to discover what improvements score big with buyers is the National Association of Realtors’ annual Remodeling Cost vs. Value Report.  This report, completed in conjunction with Remodeling magazine, compares construction costs with resale values for 35 midrange and upscale remodeling projects in 80 markets across the country, with data grouped in 9 US regions.  Interestingly enough, 9 of the top 10 most cost-effective projects in terms of value recouped are exterior replacement projects.  The number 1 project is a steel entry door replacement, with an estimated 102.1% of cost recouped on resale.  It is the only project that is expected to return more than the cost.  Other good ROI projects include garage door replacement (83.9%), fiber cement siding (80%), and deck addition (72.8%).  Top interior projects for resale value include a minor Kitchen remodel (72.8%), an attic bedroom addition (72.2%), and a basement remodel (70%).  If you plan to finish or remodel your basement, BE SURE to check with your local code enforcement officer in this regard!  I know of at least one instance where a seller had to remove their finished basement to be issued the Use & Occupancy Certificate from their municipality when they sold their home!

To access full project descriptions and national and regional project data, visit www.costvsvalue.com.  I would be happy to assist you in making decisions about the best improvements to undertake based on your circumstances.  Remember – it all starts with the TCP Principle!      

HELP! THE RELATIVES ARE COMING! WHAT CAN WE DO?

As if all the shopping, wrapping, decorating, baking, and all sorts of holiday mayhem are not enough…your house is about to be invaded by visiting relatives!  If you are having panic attacks about the potential for a Griswold Christmas, fear not.  I bring glad tidings of great outings that will keep your guests in motion and out of your house for at least part of their stay.  An agent in my office is about to welcome her grandchildren for a visit (and she really is thrilled to have them come!) and asked for our suggestions about seasonal activities.  Here are just a few that might come in handy for you as well.

Peddler’s Village in Bucks County got the most votes of all.  The lights, shopping, restaurants, gingerbread house display, carousel, “Giggleberry Farm” and more just about guarantee there is something for everyone.  My son actually went there last week and did a spontaneous juggling performance so you never know what you might find there.  Rts. 202 & 263  Lahaska, PA  http://peddlersvillage.com/

Longwood Gardens in Chester County was the second most recommended for “A Longwood Christmas”.  Spectacular lights and a miniature Christmas Railway add to beauty of “The World’s Premier Horticultural Showplace.”  1001 Longwood Road  Kennett Square, PA  www.longwoodgardens.com

A Trip to Philadelphia offers the standard in Christmas traditions at Macy’s – the organ and light show just never get old.  Check out the train display at Market East and the two-story movie at the Comcast Building.

Kozier’s Christmas Village in Berks County has a light display that is second to none, and was touted as the “Best Outdoor Christmas Display in the World” by Display World Magazine and is One of the Top 10 PA Attractions.  Family owned for 62 years and counting.  Worth the trip!  782 Christmas Village Road  Bernville, PA  http://www.koziarschristmasvillage.com/

Pennypacker Mills in Montgomery County decorates its historic estate house with a colonial flare.  Candy making, bell choir and tours.  Google Pennypacker Mills for more information.  5 Haldeman Road, Schwenksville, PA  610-287-9349

There – that should give you and your house some relief during this joyous time of the year.  Remember – you and I, and our relatives, are the same people during the holidays as we are the rest of the year.  Have realistic expectations…breathe…and enjoy.  Watch “Christmas Vacation” with your guests (still funny after all these years). It will make your family gatherings seem quite normal.  Happy Holidays and Realistic Expectations to all!          

ARE YOU READY FOR SOME GOOD NEWS?

This is the time of year we typically take stock of what we have accomplished over the last 12 months, and speculate on what the coming year will bring.  According to Dr. Austin Jaffee, the chair of the Department of Insurance and Real Estate at Penn State, the Pennsylvania real estate market in 2010 fared better than in 2009.  2010 was not, of course, a record-breaking year, but it would appear we are headed in the right direction. “House prices hit a bottom early in the year”, said Jaffee in an interview with the Pennsylvania Association of Realtors, “and began moderate increases in many regions due to the tax credit.”  With the tax credit incentive ending in April, there was a downward pressure on prices.  Dr. Jaffee further reported that sales activity was on a roller coaster, largely due to the tax credit, with sales decreasing in the beginning of the year, dramatically increasing in the spring, and dramatically decreasing in the second half of the year.

“Foreclosures continue to be an issue”, stated Jaffee.  While Pennsylvania has fewer foreclosures than other states, legal and technical issues “seem to be slowing the entire market.”  Rising delinquencies and defaults in Pennsylvania are the result of “rising and persistent unemployment.”  Dr. Jaffee explained that interest rates and affordability are quite favorable, but misleading in this downturn and not sufficient to stabilize the market.  For that we need “economic growth and a reduction in unemployment.”

Wait – I did say something about good news, right?  In 2010 Jaffee observed improvements in the housing market due to “better expectations about the market and prices.”  “There is less volatility in defaults and distressed properties in Pennsylvania.  2010 did show improvements with the stabilization of prices and beginnings of increased employment that will lead to an improving real estate market.”  Okay, we had to wade through some less than ideal details to get to it, but let’s concentrate on the “improving real estate market”.  We made it through 2010, and can at least have guarded optimism about a better 2011 for the local real estate market.       

A SON’S LOVE FOR HIS DOG AND FATHER’S LOVE FOR HIS SON

In the midst of holiday cheer and festivities, there is some sadness for my son and those who care about him.  A sophomore at Messiah College, he returned home on Tuesday for winter break to be greeted by his mother with the news that his beloved Belgium Sheepdog, Buddy, had died the week before.  We collectively decided not to burden him with this news during finals week, for which he has expressed his gratitude.

Seth is a Chemistry major, and not prone to expressing himself through poetry.  When I saw what he posted on Facebook Tuesday night, I was touched by his expression of love and devotion for Buddy.  If you have ever loved a pet, you will understand his words.

                                    The tears have blurred my vision

                                    But I’d know him anywhere

                                    He sits and waits so patiently

                                    He knows I’ll soon be there.

                                    I drop to my knees and call his name

                                    He responds with bounding glee

                                    He whines and cries

                                    The joy is in his eyes.

                                    I know it’s truly Heaven

                                    For that is plain to see

                                    My faithful friend and companion

                                    Is once again with me.

                                    To the best pet I have ever had.  Rest in peace, Buddy.

We would all like to shelter our children from such pain, but alas, we cannot.  With great love comes, ultimately, great pain.  The riches that come with that love are well worth the price we pay in separation and grief.  To the best son I could ever hope for, I love you Seth.  And that’s Dad’s take on it.

IN THE FLOOD MAP GAME – SOME WINNERS, SOME LOSERS

After years of speculation, it is about to happen.  The Federal Emergency Management Agency (FEMA) is updating the maps that determine the cost of flood insurance for property owners in flood plains.  While recent news releases have focused on changes coming to flood maps in portions of Montgomery County, I believe residents throughout the Delaware Valley would be wise to stay abreast of changes to flood maps that could impact properties they own.  Indeed, some 2,068 properties in Abington, Hatboro, Horsham, Upper Dublin, Lower Moreland, and Upper Moreland will be newcomers to the flood plain based on an analysis by the Montgomery County Planning Commission of FEMA’s preliminary map, which is expected to be adopted in final form next year.  Interestingly enough, another 2,345 properties in those municipalities will no longer be located in high-risk flood areas.

If you have a mortgage on your property, more than likely your lender will require you to obtain flood insurance if you are now deemed to be in a flood plain.  Whether you are required to take this action by your lender or not, if you are in a flood plain, having flood insurance protection may be as important as having fire insurance coverage for your home or business.  If you are fortunate enough to discover you are no longer in a flood plain, you may well be able to drop this coverage completely, although you will need to initiate this discussion with your lender, as it is not likely they will contact you in this regard.

The average premium for flood insurance purchased through the federally underwritten FEMA National Flood Insurance Program is $550.00 and $600.00 per year.  Since the new flood plain maps were created with more modern technology, Montgomery County Planning Commission’s Chief of Environmental Planning explains that someone new to the list has really always been in the flood plain.  While that makes sense, it would be counterintuitive to think that the development throughout the region had no impact on this situation.  Whatever the cause, be sure to stay on top of this situation as it relates to your properties, and contact me if you need help in determining which side of the line you are on.  

STUART VARNEY – THE ECONOMY – AND FERTILITY RATES

Our keynote speaker today at the Realtors Triple Play Conference in Atlantic City was Stuart Varney, veteran business journalist and commentator for FOX News.  I expected Mr. Varney to talk about the economy, but was less inclined to anticipate him expounding on fertility rates.  But in the end, as you will see, it makes perfect sense for him to include population analysis in his reports.

I was more than pleasantly surprised by his predictions for next year.  Based upon agreements that have been reached in Washington that include the extension of the Bush tax cuts for another two years, Varney predicted that the United States will experience a 3%, perhaps even a 4%, growth in our economy by the summer of 2011.  He believes that by maintaining the current tax structure the $1.5 trillion on the sidelines will come into play as consumer confidence grows.  Businesses that have been reluctant to utilize their substantial cash reserves will view a consistent tax structure as a sign that it time to invest in their businesses again.  From your lips to God’s ears, Mr. Varney!

While this is good news, it may be premature in the long run for dancing in the streets.  It seems that fertility rates around the world are dropping.  In fact, in all developed societies around the world birth rates are below population replacement levels.  “We have never seen anything like this before, ever” Varney said.  In the United States, and countries around the world, there are fewer working people who are having fewer children.  In 10 years, 55 out of every 100 people in the US will be retired and 65 years of age or older.  “That is not an economically viable society.  We can’t do it”.  While Varney foretells a day of reckoning that may be coming, I think we can be encouraged about the year ahead.  As to what will happen a decade from now and beyond, we may well have to make painful adjustments, but I am convinced the America I believe in will have the grit to face and defeat whatever challenges that confront us.  That’s my take on it, with some help from Stuart Varney.         

WHAT IS MID, AND WHY SHOULD I CARE?

I am currently attending the Realtors Triple Play Conference in Atlantic City, the annual, combined convention for the Pennsylvania, New Jersey, and New York Associations of REALTORS, and it is a full schedule for the thousands of real estate professionals in attendance.  No topic, however, is receiving more attention, than MID.  No, not mid-life crisis, Mortgage Interest Deduction.  The President’s Deficit Commission has announced its conclusions that include limiting or even eliminating the ability to deduct mortgage interest on your federal income tax return.

Mortgage interest has been deductible for nearly 100 years, and the proposed changes will affect all 75 million homeowners in the United States.  At a time when the American homeowner is strapped with rising real estate taxes and insurance premiums in an economy with fewer opportunities, do we really believe this is the time to abolish one of the primary benefits home ownership provides?

The last thing the struggling housing market needs right now (and in the foreseeable future) is another wet blanket tossed upon it in the midst of an overall weak economy.  Just hearing news reports about the possibility of changing the mortgage interest deduction has the effect of making already nervous buyers even more unsure about moving forward with a real estate transaction.  If you are concerned about losing a deduction we all actually understand and rely on, there is something you can do.  CALL your representative in Congress and speak in strong opposition to any changes to MID.  A stable real estate economy is vital to a strong national economy.  And as a current or future homeowner, the preservation of mortgage interest deduction is one more key to protect the value of your real estate investment.  Join the more than 1,000,000 members of the National Association of REALTORS in this call to action to support a key benefit part and parcel to the American Dream of home ownership.