Should I remodel, or sell my property?

Personal circumstances generally will lead you to the decision between remodeling the home you’re in or buying a different, more suitable home. Perhaps a career or familial change is creating the need for more space.  You may be in a larger home already, and you don’t need the space, or taking care of it has become a burden. You may be on the track of accumulating properties as part of a retirement portfolio.

To help you move you forward with the decision between staying or selling, you should first obtain an understanding of the cost, time, and discomfort involved in the remodel; the second is learning how much you can afford in a new home, taking into consideration your current equity, and how your financial picture may have changed since you last purchased a property.

Here are some reasons you may want to stay in your location and remodel:

Remodeling may be easier than moving to another property.

You may love the location of your property and may not be able to find a better replacement.

You have an established property tax rate you want to keep.  There are options to keep you tax rate if you want to scale down and are over 55 years old.

You may be preparing your home for sale.

Before beginning, consider what you are doing to the property:

  • Are you creating value; i.e. adding a bedroom, bathroom, or updating the kitchen?
  • Are you building for yourself; i.e. are you doing improvements that are specific to your needs, not taking into consideration future resale?
  • Are you overbuilding; i.e. spending too much money that you will not get out of the property when you finally do sell it?
  • The bottom line is to do the things that are right for you; just do it with your future goals in mind.  Remodeling always costs more than you think, so make sure you have a good, reliable contractor who lives up to their promises.  You may have to pay more for a good contractor, but it will pay off in less stress and problems for you.
  • Get an outside opinion from an architect, home designer or design build contractor on things you can do to your home.  You may be surprised at options you may not ever have considered.   You may spend some money for this opinion, but the result could be a better project and money saved in the long run.
  • At the end of the information-gathering phase, you may find remodeling is not the answer, and a move up property may be a better option.

West Portal Property Values

Eric Castongia - West Portal Avenue West Portal Property Values continue their upward movement in the Second Quarter of 2013

Homes in West Portal and Inner Parkside continue to get snapped up. The lack of inventory in the neighborhood keep buyers interested and waiting to pounce on that right property the moment it comes on. Generally speaking, a property comes on the market and sells within a week; there is a steady demand and not enough homes coming on the market to fill the demand. Even a water main break and sink hole didn’t slow it down! Interest rates are just started to creep up, so we should know by next quarter whether there is any measurable change to property values and the number of buyers out there.

* At the close of the second quarter of this year, we had one active home (it just came on the market and hasn’t taken offers yet), eight pending (not yet closed) and 14 sold (closed) properties. Interestingly, that is what happened at the end of the first quarter; the only difference-we had 13 closed sales.

* Of the 14 sold, 13 received multiple offers (93%) and 13 sold over their asking price. The amount of over bids ranged from as little as $5,000 to as much as $273,000. Overbids in the $200,000 range are not uncommon; the lower the list price, the higher the overbid. The closer you price to your expected sales price, the more likelihood that you will sell at or below asking.

* For a little perspective on the state of the market and how it has accelerated, at the close of the second quarter of 2012, we had 10 sold (closed) properties. Of the 10, seven received multiple offers (70%) and five of them sold over their asking price. Of the 10, three of them (30%) sold under their asking price; in the current quarter we had one of the 14 sell under asking.

* We did not have any short sales and foreclosures this quarter; it was also down citywide.

* In the last few weeks, we saw interest rates go up approximately a percentage point higher. Relatively, that is still low-below five percent, but it does affect buyer’s purchasing power, so I expect that to affect prices.

* Large down payments and all cash buyers are dominating the marketplace, making respectable 20 percent down buyers either lose out, or take larger risks by not having appraisal or financing contingencies and/or paying significantly more than the all cash buyers.

* The number of offers on a listing seems to be dropping; perhaps from buyer fatigue, or the start of the summer doldrums.

* North of Ulloa typically has the most sales in the neighborhood and that is true in this quarter.

* For West Portal and Inner Parkside up to Ulloa, prices are up approximately 20 percent since the second quarter of last year. North of Ulloa has seen an appreciation of approximately 10 percent. This area got hit the hardest when the economy went down and it has regained much of what it lost. Relatively speaking, it is still affordable for the area, so demand is high.

* Another datapoint; a home in West Portal that sold in 2006 recently sold for 12 percent over it’s 2006 price. This is important to note, since property values went down 15 to 20 percent between 2007 and 2011. We have recovered and then some.

* This is a great time to sell; do consider these things when you list your home: 1) buyers still take a hard calculating look at what is available, if there is more than one fatal flaw in the property, they may pass you by, and 2) Iist price is still critical; it must seem like it is a good value in order for buyers to be motivated to act. Pricing a little under neighborhood expectation is still the best way to net you the most on your sale.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700. DRE Lic. No. 01188380

 

Proposed new homes on Alamo Square

Finally, a rendering of the proposed ‘Painted Gentlemen’ that are to be built on Alamo Square, in the next block to the Painted Ladies.

Rendering via Socketsite

The white building to the right is 940 Grove; part of which will be torn down to accommodate the new homes.  It’s the non-historic part, so nothing lost there.

Seems the developer is getting the green light from the Planning Department, now it’s up the San Francisco Historic Preservation Commission.

I’m assuming the rendering shows massing only and does not give an indication of detail giving the homes scale and substance.  The proposed homes should really help clean up that block of Steiner.  Kudos to the developers.

The West Portal/Inner Parkside Second Quarter 2013 Real Estate Market Update

By Eric Castongia, Zephyr Real Estate

Homes in West Portal and Inner Parkside continue to get snapped up.  The lack of inventory in the neighborhood keep buyers interested and waiting to pounce on that right property the moment it comes on.  Generally speaking, a property comes on the market and sells within a week; there is a steady demand and not enough homes coming on the market to fill the demand.  Even a water main break and sink hole didn’t slow it down!  Interest rates are just started to creep up, so we should know by next quarter whether there is any measurable change to property values and the number of buyers out there.

  • At the close of the second quarter of this year, we had one active home (it just came on the market and hasn’t taken offers yet), eight pending (not yet closed) and 14 sold (closed) properties.  Interestingly, that is what happened at the end of the first quarter; the only difference-we had 13 closed sales.
  • Of the 14 sold, 13 received multiple offers (93%) and 13 sold over their asking price.  The amount of over bids ranged from as little as $5,000 to as much as $273,000.  Overbids in the $200,000 range are not uncommon; the lower the list price, the higher the overbid.  The closer you price to your expected sales price, the more likelihood that you will sell at or below asking.
  • For a little perspective on the state of the market and how it has accelerated, at the close of the second quarter of 2012, we had 10 sold (closed) properties.  Of the 10, seven received multiple offers (70%) and five of them sold over their asking price.  Of the 10, three of them (30%) sold under their asking price; in the current quarter we had one of the 14 sell under asking.
  • We did not have any short sales and foreclosures this quarter; it was also down citywide.
  • In the last few weeks, we saw interest rates go up approximately a percentage point higher.  Relatively, that is still low-below five percent, but it does affect buyer’s purchasing power, so I expect that to affect prices.
  • Large down payments and all cash buyers are dominating the marketplace, making respectable 20 percent down buyers either lose out, or take larger risks by not having appraisal or financing contingencies and/or paying significantly more than the all cash buyers.
  • The number of offers on a listing seems to be dropping; perhaps from buyer fatigue, or the start of the summer doldrums.
  • North of Ulloa typically has the most sales in the neighborhood and that is true in this quarter.
  • For West Portal and Inner Parkside up to Ulloa, prices are up approximately 20 percent since the second quarter of last year. North of Ulloa has seen an appreciation of approximately 10 percent. This area got hit the hardest when the economy went down and it has regained much of what it lost. Relatively speaking, it is still affordable for the area, so demand is high.
  • Another datapoint; a home in West Portal that sold in 2006 recently sold for 12 percent over it’s 2006 price.  This is important to note, since property values went down 15 to 20 percent between 2007 and 2011. We have recovered and then some.
  • This is a great time to sell; do consider these things when you list your home: 1) buyers still take a hard calculating look at what is available, if there is more than one fatal flaw in the property, they may pass you by, and 2)  Iist price is still critical; it must seem like it is a good value in order for buyers to be motivated to act.  Pricing a little under neighborhood expectation is still the best way to net you the most on your sale.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace.  Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700. DRE Lic. No. 01188380