With Terry Story, 26-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Although home sales are doing well these days, the home renovation business is thriving. Terry says there are two kinds of renovators out there— first-time buyers fixing up older homes and long-time homeowners choosing to stay and fix up the place.
The largest group is the new home buyers who purchase older homes because of location or price and take on ambitious projects such as remodeling kitchens and bathrooms, adding on rooms, or major landscaping. Generally, they’re spending an average of $66,000 on such improvements.
The other group, those who have lived in the home for perhaps 25 years or so, spend about $36,000 making upgrades and enhancements as the alternative to moving.
Terry says this is an excellent time for anyone selling products or services for remodeling—contractors, carpet and flooring specialists, stores such as Lowe’s and Home Depot.
As a busy real estate agent, Terry often encounters problems that can derail a closing date on a home sale. Since few people can pay cash for a new home, for the most part, these delays or cancellations are related to issues with the buyer’s financing. Quite often, the buyer of a new home is faced with having to first or simultaneously sell their present home before being able to take on the costs for the new one. For some, bridge loans are an option as is tapping into a home equity line of credit. Terry’s advice to her clients is to have a plan in place should the timing not be so well coordinated.
In closing, Terry comments on the flipping phenomenon that was so prevalent back before the housing crash. Instead of buying and trying to flip a house, as in the past, Terry says investors are buying, fixing, and then renting. Since rents are on the rise, this practice usually brings a good rate of return.
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Steve Pomeranz: It's time for Real Estate Round-up. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 27-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: I know that home sales are doing rather well, but I think a lot of people these days are deciding to stay in their home and renovate. What's going on in the renovation market? Is there more than one type?
Terry Story: Absolutely, Steve. There are actually two kinds of renovators. What we're seeing, the largest group of people renovating are the new homeowners. They're taking on the larger projects, so somebody who just purchased a home and they want to redo it. They didn’t want to buy an old house. They wanted to buy something that is more centrally located, so they're buying that older home, turning into bigger projects. For example, they're remodeling the kitchens, that’s the most popular. Then they're tackling the bathrooms and then maybe doing curb-appeal projects such as painting the house, roof, et cetera. They're spending on average about $66,000 on homes.
Your next kind of home owner/renovator, they're spending about $36,000. That’s the person who's been in their house 25 years. They don’t really want to move, and they tend to tackle the projects on their own. They might not hire that general contractor, therefore, they tend to spend less.
Steve Pomeranz: Yeah.
Terry Story: The new home-buyer coming in spends a lot more than the current person currently living in the house.
Steve Pomeranz: Yeah, so this is a good time for anyone really in the local remodeling construction business, I guess, for people who sell flooring and those kinds of services as well.
Terry Story: Absolutely.