Berkley November sales report

There is good news all around for home sales in Berkley, Michigan.

The average sale price (median) for homes in Berkley grew from $151,000 in November of 2014 to $162,500 in November this year.  That is about a 7% growth over last year.  If growth goes much beyond that, 7%, the market may be over inflated.  But 7% is an easily sustainable growth but still keeps ahead of the economy over all.

As a reflection of the growth, the number of days (DOM) on the market dropped dramatically.  The average this year was only on the market 36 days.  Last year DOM was at 43 days.

Finally, more homeowners thought it was time for them to make a move.  Many were perhaps finally able to get enough for their investment to upgrade their living arrangements.  The number of homes sold in Berkley went from 27 in November of 2014 to 32 in November of 2015.

As you can see, good news for all.

Keep in mind, these are averages for the market overall.  Individual homes may sell for less or for more depending on the neighborhood and the condition of your home.  

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

It is important to know the value of your home

Many people when asked if they would like to know the current value of their home shrug.  They don’t see any reason why they should at least get an estimate of the market value of their home on an annual basis.

Truth is, there are many reason homeowners should get a real estate professional to provide an estimate on the market value of their home.  This is true, even if you aren't planning on moving in the near future. One example comes to mind of a man that left his house to one son and his investments to another.  When he made the will, things were about even.  But, when he died, the estate was split like his will required, but the house was worth so much more than the investments that it was a very uneven split.  If the man had monitored the value of his house throughout the years, he would have been able to make adjustments to his will to keep it up to date.

Think about it, it is considered smart for people to meet with their financial adviser annually to review their investments.  It is also smart to meet with your real estate agent to review the value of what is for most of us, the biggest investment we make.

Here are some reasons to review the value of your home annually but certainly not an all-inclusive list:  

• Make judgements about your own home by comparing it to the value of your neighbor’s home.  

• Make judgements about your community by comparing the value of your home to county, state and national home values.

• Knowing the equity in the home helps you plan for repairs that are needed.

• Your net worth can be more precisely known.

• You may want to make adjusts to your insurance policy to keep up with your home value.

• Some communities have rebuilding requirements that may affect your ability to rebuild if you are under insured.  

• Don’t pay property taxes beyond the value of your home.

• Better plan for retirement by keeping track of the equity in the home.

• If you are considering a reverse mortgage, knowing the value will help you make a better decision.

• Let’s hope you never need emergency cash, but knowing the value will help you plan for emergencies better and save money on insurance.

• Know if an improvement will be right for the house by not over investing in your home.  

• Be aware of the value of your estate.

• If you pay PMI (private mortgage insurance) when an equity level is reached, you may not have to continue to pay.

• If the equity in your home reaches a certain level you may not need to make monthly escrow payments for property taxes, allowing you to invest the money instead of letting someone else hold it.

• Pay off bills by taking some of the equity out of the home.

• If you plan on refinancing the mortgage you will need to know when you reach the equity level you may need.

A real estate agent that is looking out for your best interest will not charge you for a CMA (Comparable Market Analysis) for your home.  To get the best idea of the value of the home, the agent will need to visit to home, research recent history on comparable homes that have sold in the market and make adjustments in the value based on your home.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

Cost of home improvement projects and their return at sale

Cost of home improvement projects and their return at sale

A question that comes up often when a client is considering placing their home on the market is should something be replaced or renovated in the home to improve the selling price? The answer in the short run is yes; replace a broken or worn out item, certainly make the cosmetic improvements, but don’t renovate the kitchen or bath just to sell the home.

If the water heater is making noises, if the garage door is bent and off track or, if the faucet in the bathroom is leaking then repair or replace it.  If something is broken when buyers walk through the home during a showing, it will pull down the price of the home when an offer is made and provide a negotiating edge to the buyer.  Keep in mind, even if the buyer didn't notice it when they made the offer, the home inspector will pick it up - or at least should.  This will give the buyer a chance to submit a lower offer, or back out of the agreement altogether.  

But, when it comes to renovating, don’t.  As you can see from the graph linked here, (Cost of improved compared to return on sale - table) the only thing that returns 100% of the investment is replacing the front door.  

If you do make large improvements, make those renovations a few years before you are going to sell.  Living in the home for about five years after you complete the project, you can consider the difference between the cost of the renovation and the resulting effect on selling price as your enjoyment return.  Living with the improvement makes for a better living space for the time that you stay.  Then, when you sell the home, the additional value makes sense, or in this case, dollars. 

In the near future, "Ten things you can do to make your home appealing on the market".

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.

Cost of improved compared to return on sale - table

Below is a table comparing the job cost for home improvements with the return on the investment from the sale of the house.  

PROJECT	NATIONAL: JOB COST	RESALE VALUE	COST RECOUPED	REGIONAL: JOB COST	RESALE VALUE	COST RECOUPED
Attic Bedroom	$51,696	$39,908	77.20%	$52,433	$37,226	71.00%
Backup Power Generator	$12,135	$7,263	59.90%	$12,240	$6,215	50.80%
Basement Remodel	$65,442	$47,637	72.80%	$66,425	$39,601	59.60%
Bathroom Addition	$39,578	$22,875	57.80%	$40,392	$20,392	50.50%
Bathroom Remodel	$16,724	$11,707	70.00%	$17,120	$10,337	60.40%
Deck Addition (composite)	$15,912	$10,816	68.00%	$16,086	$9,646	60.00%
Deck Addition (wood)	$10,048	$8,085	80.50%	$10,275	$7,217	70.20%
Entry Door Replacement (fiberglass)	$2,926	$2,107	72.00%	$2,946	$2,044	69.40%
Entry Door Replacement (steel)	$1,230	$1,252	101.80%	$1,244	$1,073	86.30%
Family Room Addition	$84,201	$53,955	64.10%	$85,380	$50,207	58.80%
Garage Addition	$52,382	$33,938	64.80%	$52,758	$29,531	56.00%
Garage Door Replacement	$1,595	$1,410	88.40%	$1,610	$1,341	83.30%
Home Office Remodel	$29,066	$14,155	48.70%	$29,468	$11,792	40.00%
Major Kitchen Remodel	$56,768	$38,485	67.80%	$57,407	$35,127	61.20%
Manufactured Stone Veneer	$7,150	$6,594	92.20%	$7,189	$5,822	81.00%
Master Suite Addition	$111,245	$68,596	61.70%	$112,684	$60,291	53.50%
Minor Kitchen Remodel	$19,226	$15,255	79.30%	$19,503	$13,522	69.30%
Roofing Replacement	$19,528	$13,975	71.60%	$19,503	$12,507	64.10%
Siding Replacement (vinyl)	$12,013	$9,694	80.70%	$12,236	$8,944	73.10%
Sunroom Addition	$75,726	$36,704	48.50%	$76,677	$34,175	44.60%
Two-Story Addition	$161,925	$103,848	64.10%	$163,914	$95,741	58.40%
Window Replacement (vinyl)	$11,198	$8,163	72.90%	$10,448	$7,762	74.30%
Window Replacement (wood)	$11,341	$8,937	78.80%	$11,472	$8,196	71.40%
Bathroom Addition	$76,429	$44,750	58.60%	$77,538	$39,733	51.20%
Bathroom Remodel	$54,115	$32,385	59.80%	$54,622	$29,103	53.30%
Deck Addition (composite)	$36,385	$21,437	58.90%	$36,828	$19,729	53.60%
Garage Addition	$85,592	$46,791	54.70%	$86,319	$41,915	48.60%
Garage Door Replacement	$2,944	$2,429	82.50%	$2,966	$2,282	77.00%
Grand Entrance (fiberglass)	$7,548	$5,099	67.60%	$7,603	$4,575	60.20%
Major Kitchen Remodel	$113,097	$66,747	59.00%	$114,020	$60,906	53.40%
Master Suite Addition	$236,363	$126,860	53.70%	$239,034	$115,520	48.30%
Roofing Replacement	$36,329	$22,840	62.90%	$37,201	$20,363	54.70%
Siding Replacement (fiber-cement)	$14,014	$11,816	84.30%	$14,314	$11,358	79.40%
Siding Replacement (foam-backed vinyl)	$15,184	$11,790	77.60%	$15,449	$10,733	69.50%
Window Replacement (vinyl)	$13,837	$10,365	74.90%	$13,970	$9,969	71.40%
Window Replacement (wood)	$17,422	$12,533	71.90%	$17,576	$11,688	66.50%