It seems that many of the phone calls that we have been receiving are from people interested in selling their homes. The faces change, but the story seems to be the same. Owners remodeled their homes over the past several years, many during 2005-2006 and are looking to sell. Some have already tried to sell, but can't.
And since then, the market has dropped.
But the same message keeps coming through, 'I've put alot of money into the home in remodeling and I'd like to get some, if not all of it back out."
It makes perfect sense, right?
But, is it possible?
Today, probably not.
In 2004-2006 remodeling was all the craze. People were buying houses like hotcakes, remodeling them, and selling them, even before the paint was dry, because of the shortage of properties for sale. There was an overabundance of qualified, ready, able and willing buyers.
When the market went belly up, many owners, investors, and speculators were left holding those remodeled homes. We've all heard the story.
So, here they are today...with beautifully remodeled homes...that are sitting. They won't sell. Some won't rent. Unfortunately, these owners often believe they still have a gem on their hands.
Everyone wants a remodeled home, right? Everything is brand new.
Well, many people may not want the property.
WHY?
Price, price and price, again.
Today, we are in a completely different market than a couple of years ago. The economy has changed. Some have lost their jobs. Money is tighter than it used to be. The price of items has gone up.
There are an overabundance of properties on the market. Many are short sales and foreclosures. And in areas of Brevard County, especially in Palm Bay, many of these are brand new or barely lived in properties. Regular sellers are having a hard time competing with the bargain prices being offered on these properties. And, sellers with remodeled homes are having an even harder time competing with these properties.
Today, buyers are looking for a bargain. They are shopping price. They are shopping for the monthly payment they can afford, They will take the home for $200 less a month that needs a coat of paint before they opt for the higher priced remodeled home. Don't get me wrong, if they can find that $200 less a month priced home in something that is move in ready, or nearly new that's their first choice. But, if not, today they'll agree to a lower price on a home that needs a little elbow grease. Money is tight.
A couple of years back, buyers would jump on the remodeled house and pay top dollar. But, not today.
Our market has come full circle.
Sellers may be holding onto their remodeled homes for longer than they care to.
This article is authored by
Sandy Shores REALTOR®, Melbourne/Palm Bay FL Real Estate
Brevard County Real Estate & Investing
I also buy, sell, rent, own and manage Investment Property.
that for you
I am seeing more and more homes starting to go thru the remodel phase because the home owners can't sell or don't want to sell and take such a huge loss. They are remodeling and making the home exactly like they want and are going to keep it. The contractors are offering smoking hot deals for doing the work so it is very cost effective to do it now. The only issue to doing this is you will likely have to bring the remodel cost to the table in cash. The HELOC arena has all but dried up and lenders have cut peoples credit lines to almost nothing if they were carrying large available loans. It's a double edge sword.
Hi Jerry, We see it too, when people can't sell and have to stay, they remodel. They have to be cautious and be sure they are not getting in way over their heads, so when the market does come back around they can recoop some of those remodeling costs.
Sandy, You're so right, a few years ago I couldn't pass one block that didn't have homes on there that were being remodeled. Mostly I don't see it anymore. People that are purchasing want to spend less and some were overpriced for the area.
Well thought out and written, seems that is true in our market as well, but I have turned down a few listings because they could not come down to a sellable price, what else can you do?
Hi Sandy ~ This reminds me of how I dislike those annual issues that have "return on remodeling costs" for various jobs, rooms, etc. They never rung true to me since the return is almost entirely impacted by real estate appreciation or depreciation. You just can't expect to get your remodeling dollars back quickly in most cases.
Liz
Hi Sandy
It comes down to price. Now if the homes remodeled at the same price the remodeled home will sell first.
Good and luck and success.
Lou Ludwig
Sandy - During that 2005-2006 period here in Sacramento we saw the same kind of activity. There was much remodeling going on. And the activity was by those who had often purchased homes to fix them up, flip them in a short amount of time, and move on. Of course hindsight is 20-20, and we now see many folks that were involved in that enterprise became stuck with the properties, that quickly began to plummet in value. However, we are seeing some investors come into the market, and are able to pick up many fixer properties at very affordable prices. They appear to be trying to once again do what they did during the 2005-2006 era. I wish them well. Somehow, this time, I think they may prevail. There is a market for entry level homes that are affordable, in good repair, and ready to move in. . .At least here in Sacramento.
Hi Sandy-This post is so true about what is happening across the country. Those who survive this market will prosper when the market does turn around. Great post. :-)
Sandy, I always like the way you tell it like it is. In our recreational market, many second home owners did not remodel, but they are having a difficult time selling their cabins with the 1960s colored sinks and tubs and the 1970 shag carpeting -- it's just a difficult market for sellers even with a competitive price point.
Sandy,
We have a shortage of listings in our area at least of homes ready to be lived in... I have buyers looking frantically for a home and not finding one....
Ann