Do you have a list of changes you’d like to make to your home this year? Completing cosmetic updates is easiest when the weather’s in your favor. In honor of May’s National Home Improvement Month, here are four upgrades ranging from curb appeal projects to large-scale expansions that often yield high returns.
- Replacing doors and windows: Homeowners are often encouraged to consider projects that boost overall curb appeal. Swapping out a wooden front door for a steel model or replacing front-facing windows can pack more of an ROI punch than renovations made inside the home.
- Constructing a deck: Create a beautiful transition from your back door to the outdoors by building a deck. The update turns into a major selling point that can recoup your initial investment when it’s time to move on.
- Adding insulation: Of all the projects listed in Remodeling magazine’s 2017 Cost vs. Value Report, adding loose-fill insulation to your attic is the only one with returns that exceed 100 percent of the cost. It can also help reduce year-round heating and cooling costs.
- Building a second-story addition: Even with a slight increase in construction costs, completing a significant two-story addition resulted in a substantial year-over-year increase in value from 2016 to 2017. Adding the extra space will likely catch the attention of buyers.
Home renovations and repairs are on the rise and expected to peak this year. Now’s the time to start planning your investment-savvy home improvements.
WATERFRONT TEXAS VILLA SIMILAR TO ITALIAN COAST
HIGH-INCOME MILLENNIALS ENTER LUXURY MARKET
Texas is a far cry from Italy, but you’d be hard-pressed to tell the difference wandering these acres. The opulent Villa La Isla features soaring ceilings, imported materials and a 6-foot fountain.
When you think millennial, you may not think millionaire. However, many around the country are now earning enough to afford seven-figure #luxury #homes without the help of their parents.
Lake Nona’s owner has a project in the works that will bring a new residential option to the growing southeast Orlando community.
#Tavistock Development Co. LLC is planning a new 216-unit active adult community called The Gatherings at Lake Nona. The community would be built on 9.7 acres about one mile east of the VA Medical Center in Lake Nona off Laureate Boulevard.
The community also will include a pool, a 4,400-square-foot clubhouse, shuffleboard, standalone garages and a 218-space surface parking lot. Tavistock Development filed for an environmental resource permit on Aug. 1, and has submitted specific parcel master plan documents to the city of Orlando.
Beazer #Homes USA appears to be the builder of the project, according to documents. Donald W. McIntosh Associates Inc. is the project engineer/surveyor; Aecom Inc. is handling ecological sciences work; Broad and Cassel is the legal counsel; and GAI Consultants is handling landscape, irrigation and hardscape.
This project is poised to create new construction and vendor opportunities for local firms, and will bring a new residential market to Lake Nona that already boasts more than 11,000 residents in its single-family homes and multifamily complexes.
Developer Tavistock Development Co. LLC on March 9 is expected to go before the city of Orlando’s Southeast town design review committee with a specific parcel master plan for what’s being called Phase 2A — a significant piece of the $780 million, 3.8 million-square-foot open-air lifestyle and entertainment center planned for Lake Nona.
#Tavistock has submitted plans that include:
- 1.2 million square feet of mixed-use development, including a brewery, bowling alley and medical fitness facility
- About 200 hotel rooms
- 3,200 parking spaces, including surface spaces and garage spaces
The Lake Nona Town Center’s $70 million first phase included two office buildings — one completed and one now in the works— plus restaurants, a dual-branded Marriott hotel and structured parking, as previously reported by Orlando Business Journal.
The request to expand the second office building to six stories also is on the March 9 review committee agenda, as OBJ previously reported .
Meanwhile, the Lake Nona Town Center is a long-awaited project meant to serve local residents, students and workers in the 11,000-acre southeast Orlando community, but likely also will attract some tourists, as previously reported by OBJ.
ORLANDO, Fla. – Florida’s housing market continued to report a tight supply of #homes #for sale and rising median prices in February, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide remained relatively flat last month, totaling 18,033, down only 0.5 percent compared to February 2016.
“Florida’s economy is growing, with more jobs being created,” said 2017 Top Awarded #agent Allyn Maycumber with Keller Williams Advantage in Lake Nona. “And a growing economy boosts the state’s housing sector as well. However, many local markets are reporting low inventory of for-sale homes at a time of increasing buyer demand. For sellers, it’s a good time to list their homes, as they continue to get more of their original asking price at the closing table. In February, sellers of existing single-family homes received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent.
“In these kinds of market conditions, serious home buyers must be prepared to act fast, and work closely with a local Realtor to find the right home for their needs and their budget.”
The statewide median sales price for single-family existing homes last month was $225,000, up 12.5 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in February was $167,500, up 11.7 percent over the year-ago figure. February marked the 63rd month in a row that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in January 2016 was $230,400, up 7.3 percent from the previous year; the national median existing condo price was $217,400. In California, the statewide median sales price for single-family existing homes in January was $489,580; in Massachusetts, it was $330,000; in Maryland, it was $261,868; and in New York, it was $250,000.
Looking at Florida’s townhouse-condo market, statewide closed sales totaled 7,949 last month, up 4.1 percent compared to February 2016. Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 39.6 percent while short sales for single-family homes also dropped 39.6 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
“Florida’s market for existing single-family homes in February continued to perform in line with what we’ve seen over the past year and a half,” said Florida Realtors® Chief Economist Dr. Brad O’Connor. “Due primarily to fewer distressed properties on the market, sales of single-family homes edged down. However, non-distressed sales of single-family homes were up almost 10 percent year-over-year, showing that the traditional market – as opposed to the niche distressed market – is healthy and continues to grow.
“Meanwhile, Florida’s condo and townhouse sales are off to very good start in 2017. Coming off a 6.2 percent year-over-year increase in January, condo and townhouse sales rose 4.1 percent year-over-year in February. For perspective, the last time statewide condo and townhouse sales rose on a year-over-year basis for two consecutive months was in August and September of 2015.”
For the second consecutive month, inventory remained at a tight 4.2-months’ supply in February for single-family homes, and was at a 6.4-months’ supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.17 percent in February 2016, up significantly from the 3.66 percent average recorded during the same month a year earlier.
Anyone who has bought a home will tell you: it can be a long, drawn-out process. Sometimes what seems like a done deal, even going into escrow, can backfire and you have to start shopping for a home all over again. For the sake of your finances and your loan, hold off any moving plans until all the closing documents are officially signed.
It seems like common sense, but there are so many “this is it” moments during the homebuying process that it’s easy to jump the gun. Credit.com explains:
Hiring a moving company when you have not signed your final loan documents is just plain unnecessary and it sets you up for failure. If you have a moving company come on a certain day and for whatever reason your house doesn’t close, things can become problematic. Hire a moving company after you’ve signed the final loan documents. Same goes for purchasing furniture, especially if those funds come in the form of credit or cash in the bank — close on the house first, then go shopping. Short-term gratification is not worth the risk.
Even can be problematic. I signed up for a travel rewards card after receiving the final loan documents, and the mortgage company called and emailed incessantly asking why I did that—and I hadn’t even received the card. Of course, there’s no harm in planning the move and figuring out what you’re going to do, but you want to postpone any large purchases until everything is official and final. Otherwise, you can throw a wrench in the mortgage process.
Purchasing a home is a major milestone that tops many people’s lifetime to-do lists—and maybe their list of financial fears too. But it certainly doesn’t have to be a scary or stressful experience. With time, care, and research, you can take control of the home-buying process.
Because while house hunting for the first time can be exciting, tales of regretful home-buying mistakes and the not-so-distant #housing market meltdown have also given it a bad rap for being a stressful and confusing process. It doesn’t have to be—that’s why we created this handy nine-step checklist, which helps explain how to prepare to buy a house—and help safeguard your finances in the process.
Lake Nona Medical City draws many International Buyers– January 2, 2017 – International home sales in the U.S. declined in the past year, but are at their second highest level in recent years and over six percent of total existing-home sales in value. According to the National Association of Realtors® 2017 Profile of International Home Buying Activity, interest in U.S. properties continues to grow, signaling that America continues to be regarded by international buyers as a great place to own property.
The survey, which asked Realtors to report their international #business activity within the U.S. for the 12 months ending March 2013, showed that total international sales were $68.2 billion, down approximately $14 billion from the previous year. The decline is attributed to a number of temporary factors, including economic slowdowns in a number of major foreign economies, tighter U.S. credit standards and unfavorable exchange rates.
Of total international transactions, $34.8 billion (51 percent) were attributed to foreign buyers with permanent residences outside the U.S. and $33.4 billion (49 percent) were attributed to buyers who are recent immigrants or temporary visa holders residing for more than six months in the U.S.
“Foreign buyers are experiencing hurdles not only abroad, but also here in the U.S. when it comes to purchasing property,” says NAR President Gary Thomas. “Difficult economic conditions, particularly in Europe, have impacted foreign buyers, but several factors in the U.S. have also affected their purchasing power here. Tight credit standards have made financing challenging for immigrants, and low housing inventories have made finding a house difficult. However, none of these factors appear to be permanent.”
Foreign buyers continue to have a substantial interest in U.S. properties. Over a five year timeframe more than 70 percent of Realtors reported a constant or increasing level in the number of international clients contacting them.
Twenty-seven percent of Realtors said they worked with international clients this year. The most important factors influencing their purchases were the U.S.’s desirable location and the investment potential of the real estate market.
Realtors reported purchases from 68 countries, but five have historically accounted for the bulk of purchases: Canada (23 percent), China (12 percent), Mexico (8 percent), India (5 percent) and the United Kingdom (5 percent). These five countries accounted for approximately 53 percent of transactions, with Canada and China the fastest growing sources over the years.
Canadian buyers were reported to purchase properties with a median price of $183,000, with the majority purchased in #Florida, Arizona and California. Chinese buyers tended to purchase property in the upper price ranges with a median price of $425,000 and typically in California. Sixty-two percent of Mexican buyers purchased property in California and Texas, with a median price of $156,250.
“Many factors influence foreign buyers’ decisions on where to purchase in the U.S., but the most important are proximity to home country, presence of relatives and friends, availability of job and education opportunities, and the climate,” says Thomas. “International buyers also differ on the type of desired property. Some are looking for trophy properties while others are interested in modest vacation #homes.”
Five states made up 61 percent of reported purchases: Florida (23 percent), California (17 percent), Arizona (9 percent), Texas (9 percent) and New York (3 percent).
About half of foreign buyers preferred to purchase in a suburban area, while a quarter preferred a more central city/urban area. A majority purchased a detached single-family home and 63 percent used all-cash.
Based on the reported international transactions, the mean and median prices of purchases were higher when compared to purchase prices of domestic buyers. For the 12 months ending March 2013 the median international home price was $275,862, and for domestic buyers it was $179,867.
The types of homes purchased by international buyers frequently tended to be different from the types of homes purchased by domestic U.S. buyers. International buyers are more likely to be substantially wealthier and looking for a property in a specialized niche.
Orlando home sales, median price increase along with mortgage rate in November
Orlando home sales experienced a 7 percent year-over-year jump in November, along with a 9 percent increase in median price. The average interest rate paid by an Orlando home buyer is November is 3.82 percent, up from 3.57 percent.
Allyn Maycumber from the Maycumber Team of Keller Williams, points out that buyer demand lifted year-over-year sales despite a dramatic drop in the number of #homes available for purchase that occurred in November.
“The substantial decrease in inventory — nearly 18 percent compared to November 2015 — can be attributed in part to the shifting of “Active With Contract” listings from the “Active Inventory” category to the “Pending” category within our local multiple listing system, a process that took place in November” explains Maycumber. “After adjusting for the elimination of “Active With Contract” homes, the November 2016 inventory is 12.40 percent lower than in November 2015 and more in line with the decreases we have seen this year.”
“The “Active With Contract” status was initiated by the multiple listing system in the spring of 2011 to accommodate the influx of short sales onto the Orlando area #housing market,” continues Lazenby. “Now that short sales account for so little of Orlando area’s inventory, in fact only four percent in November, the status has been removed.”
The transfer of “Active With Contract” homes into “Pending” status also resulted in an increase of 9 percent when comparing the number of pending homes in November to the number of pending homes last month, and an increase of 19 percent in the number of homes flagged as newly under contract.
The overall median price (all sales types and all home types combined) for the month of November 2016 is $200,000, a 8.70 percent jump compared to the $184,000 median price in November 2015. The median price is 2.44 percent below the October 2016 median of $205,000.
The Orlando median home price has now experienced year-over-year increases for the past 64 consecutive months; as of November the median price is 73.16 percent higher than it was in July 2011.
The year-to-year median price of normal sales increased 5.00 percent, while the median price for foreclosure sales increased 20.00 percent and short sales decreased 9.38 percent.
The median price of single-family homes rose 10.79 percent when compared to November of last year, and the median price of condos increased 16.00 percent.
Members of ORRA participated in the sale of 2,481 homes (all home types and all sale types combined) that closed in November 2016, an increase of 6.71 percent compared to November 2015. Sales decreased by 8.15 percent in November when compared to last month.
Sales of normal homes increased 22.94 percent in November 2016, while foreclosures decreased 52.61 percent and short sales decreased 25.00 percent. Sales of single-family homes increased 8.42 percent year over year; condo sales increased 0.36 percent.
Homes of all types spent an average of 66 days on the market before coming under contract in November 2016, and the average home sold for 96.93 percent of its listing price. In November 2015 those numbers were 68 days and 97.00 percent, respectively.
The average interest rate paid by Orlando homebuyers in November was 3.82 percent. Last month, the average interest rate was 3.57 percent, while in November of last year homebuyers paid an average interest rate of 4.01 percent.
Pending sales – those under contract and awaiting closing – are currently at 5,122. The number of pending sales in November 2016 is 1.18 percent lower than it was in November 2015 and 8.54 percent higher than it was in October 2016.
Normal properties made up 76.94 percent of pending sales in November 2016. Short sales accounted for 13.65 percent, while bank-owned properties accounted for 9.41 percent.
The number of existing homes (all types combined) that were available for purchase in November is 17.96 percent below that of November 2015 and now rests at 9,270. Note: When adjusted for the elimination of “Active With Contract” status homes from of the active listings category within the local multiple listing service — a process that began in November — the November 2016 inventory is 12.40 percent lower than in November 2015.
Inventory decreased by 7.53 percent (755 homes in number) compared to last month.
The inventory of normal homes decreased 8.85 percent, while foreclosures decreased 70.47 percent and short sales decreased 51.69 percent.
The inventory of single-family homes is down by 19.12 percent when compared to November of 2015, while condo inventory is down by 14.44 percent. The inventory of duplexes, townhomes, and villas is down by 13.45 percent.
Current inventory combined with the current pace of sales created a 3.74-month supply of homes in Orlando for November. There was a 4.86-month supply in November 2015 and a 3.71-month supply last month.
The November affordability index is 160.37, a tiny decrease from October’s 161.08 percent. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.)
Buyers who earn the reported median income of $57,494 can qualify to purchase one of 3,540 homes in Orange and Seminole counties currently listed in the local multiple listing service for $320,737 or less.
First-time homebuyer affordability in November decreased to 114.04 from last month’s 114.55 percent. First-time buyers who earn the reported median income of $39,096 can qualify to purchase one of the 1,593 homes in Orange and Seminole counties currently listed in the local multiple listing service for $193,868 or less.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area were up by 0.36, with 281 sales recorded in November 2016 compared to 280 in November 2015.
Orlando homebuyers purchased 229 duplexes, town homes, and villas in November 2016, which is 0.88 percent less than in November 2015.
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in November (3,037) were up by 5.23 percent when compared to November of 2015 (2,886). To date, sales in the MSA are down 0.27 percent.
Each individual county’s monthly sales comparisons are as follows:
• Lake: 18.89 percent above November 2015;
• Orange: 2.88 percent below November 2015;
• Osceola: 19.23 percent above November 2015; and
• Seminole: 5.77 percent above November 2015.
The commercial real estate industry has long been a major force in local and national politics, but that relationship has reached a new height on Tuesday, when a commercial real estate developer with little track record in public service won the election to be the 45th President of the United States. Aside from the choice of his economic advisors, that created him? Here are some predictions.
A Risk of Recession Has Just Gone Up
This may not be a phenomenon exclusive to Donald Trump, but data collected over the past 70-plus years shows that whenever a new president enters the Oval Office, a recession tends to follow within the first year of his administration, according to Victor Calanog, chief economist and senior vice president of research with New York City-based research firm Reis Inc. This is often due to the eagerness to implement fiscal policy changes in a hurried fashion, using “rather blunt instruments.” Given that the U.S. economic growth is currently far from robust and that Trump ran on promises of a number of economic changes—renegotiated trade deals, lower taxes and the like—the new administration will have to be extremely careful to avoid inadvertently bringing on a recession. “If the economic environment is fragile, which it is today, it may not take much to push our economy into a downturn,” Calanog said during a third quarter briefing on the state of the market. “President Trump has his work cut out from him.”
While a strong jobs market and generally positive economic indicators made it likely that the Federal Reserve would raise its key interest rate in December, the election’s unexpected results may postpone the decision to hike rates, notes John Kevill, principal and managing director of U.S. capital markets with real estate services firm Avison Young. While previously the chance of a December increase was estimated at 85 percent, “consensus by traders already… is down to 25 percent,” Kevill writes. The interest rate will “probably move upward only one out of the next three meetings as opposed to all three…”
Short-Term Volatility in the CMBS Markets
As was made clear earlier this year, the CMBS markets don’t respond well to any perception of uncertainty in the general economy. At this point, it’s anyone’s guess what Trump’s economic policies may look like, says Greg MacKinnon, director of research with the Pension Real Estate Association (PREA). And that means more volatility is likely to be expected. “It’s really going to take a while to see how things will actually unfold,” MacKinnon notes. “In the short term, of course, that leads to uncertainty in the capital markets and I would not be surprised to see periods of volatility over the next couple of months as people come to grips with the election results. In the short term, capital market volatility could lead to a drop off in CMBS issuance from what it otherwise would have been through the end of the year.”
A Likely Pullback on New Construction
If the capital markets do experience a shock to the system, the difficulty of obtaining construction financing coupled with a muddy economic outlook may push some developers to abandon plans for new projects, MacKinnon adds.
A New Foreign Money Rush
While some investors may take a wait-and-see approach to betting their money on U.S. commercial real estate assets in the short term given the uncertainty surrounding U.S. economic policy under the new President Elect, “capital formation globally continues to grow and increase allocations to real estate,” according to Byron Carlock, real estate practice leader with consulting firm PwC, who is currently in London for an investment conference. Overall, “we will continue to be viewed as a safe haven and a popular investment destination,” he says. In fact, some foreign investors may expedite deals stateside in the coming months to protect against the possibility of potential barriers to foreign investment in the future, given all the anti-globalization talk during Trump’s campaign, noted MacKinnon. The long-term impact on global capital flows into U.S. real estate won’t be apparent until next year, however, according to Raymond G. Torto, lecturer with the Harvard Graduate School of Design and retired chief economist with real estate services firm CBRE. Post-Brexit “everybody is cautions, moving slowly and not in a knee-jerk manner,” he writes. “Most 2016 strategies are being implemented now. The election will affect 2017 strategies.”
Cap Rates Might Start Rising
If Trump does start to enact some of the anti-trade policies that he has talked about during the campaign, that would likely lead to higher inflation and, by extension, to higher cap rates on commercial properties, notes MacKinnon. The higher inflation will “likely lead to a steepening of the yield curve as long-term rates incorporate higher inflation expectations. Further, expectations of higher budget deficits going forward will tend to increase real long-term U.S. bond yields. Combined, you would then see a further steepening of the yield curve, which could drive cap rates higher—without a concomitant increase in economic activity this could be a major negative for property values,” he says.
Primary Markets Might Come Back in Favor before Cap Rates Might Start Rising
Over the past year or two, real estate investors, including those from overseas, have shown a bigger appetite for risk by entering secondary and tertiary markets. Depending on whether the new administration will soften its stance on trade policies, immigration and other global issues once in office, there might be a pullback from those markets back to first tier, coastal cities like New York, according to Sam Chandan, Larry and Klara Silverstein chair in real estate and associate dean of the Shack Institute of Real Estate at New York University. If the anti-globalization stance doesn’t soften, it will result in much greater risk aversion on the part of investors and a subsequent desire to stay in markets perceived as safe and highly liquid, he notes.
Uncertainty Will be Certain
Ultimately, the immediate impact of Trump’s presidency on the market is uncertainty—about his policy decisions, about his impact on the economy and about how he might influence the Federal Reserve, industry sources say. There is not enough information currently available to drive changes in investment strategy, according to Torto. “The Trump victory was unexpected and will lead to two immediate reactions among financial securities. One, portfolios will be adjusted to meet reality today—Trump’s win,” he writes. “And two, the Trump presidency has a high level of uncertainty as policies under Trump are an unknown. These factors do not impact commercial real estate, but do impact economic growth therefore commercial real estate indirectly. At the moment, we do not know if the impact will be big or small. And whether it will be… worth watching.”
According to Chandan, “I think the markets understand that during the lead-up to the election the rhetoric and the policy proposals tend to be more extreme, but the Presidents Elect historically have historically moderated their position once they are not having to mobilize their base. Part of the challenge for us is the finer points of [Trump’s] policies are not entirely clear. Overall, I think investors will be looking for a shift in language to see if some of the policy proposals that were viewed as more extreme are softened in a way that would be supportive of trade and continued capital flows.”
With a much-anticipated speech by Federal Reserve Chair Janet Yellen looming on Friday morning and a possible Fed rate hike on the horizon in September, average fixed mortgage rates remained flat over the week but still hovered just above record lows, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) released Thursday.
For the week ending August 24, the average 30-year fixed-rate mortgage(FRM) was 3.43 percent, unchanged from a week earlier but still only 12 basis points higher than the record low of 3.31 percent set in late 2012. At this time last year, the average 30-year FRM was 3.84 percent.
The average 15-year FRM for the week ending August 24 was 2.74 percent, also unchanged from the previous week but down from 3.06 percent from a year earlier.
“Treasury yields were little changed from the prior week and the 30-year fixed-rate mortgage held steady at 3.43 percent this week,” said Sean Becketti, Chief Economist with Freddie Mac. “This marks the ninth consecutive week that mortgage rates have been below 3.5 percent. Markets are erring on the side of caution ahead of the second estimate for second-quarter GDP and Fed Chair Janet Yellen’s speech on Friday.”
The advance estimate for second quarter GDP growth, released in late July, came in at a disappointing 1.2 percent after an ever more disappointing 0.8 percent for the first quarter. The second estimate for Q2 GDP will be released on Friday morning by the Bureau of Economic Analysis.
Yellen’s speech on “Designing Resilient Monetary Policy Frameworks for the Future” is scheduled for 10 a.m. EST on Friday morning, August 26, as part of the Kansas City Fed’s monetary policy symposium in Jackson Hole, Wyoming.
There has been widespread speculation that a rate hike from the Fed will happen at the next policy meeting, which concludes on September 21. Until then. . .
“Mortgage rates remain in virtual stasis,” said Keith Gumbinger, vice president of HSH.com. “Quiet financial markets, no imminent threat of a move by the Federal Reserve as of yet and continuing moderate economic data have seemingly lulled markets to sleep for now, but that probably won’t last forever.”
HSH.com reported a slight uptick in the 30-year FRM for the week, from 3.50 to 3.51.
“Despite some increased probability of a rate hike by the Fed, interest rates remain closer to bottoms than not,” Gumbinger said. “We may get some additional indication of the Fed’s intentions from Fed Chair Janet Yellen when she speaks at a global central banking conference in Wyoming on Wednesday, but probably not much in terms of a clean, clear signal that the Fed is poised to act. More likely is that mortgage and other rates keep drifting along in a soft pattern until we get a lot closer to the next Fed meeting.”
Housing data firm’s research shows homes near good elementary schools are valued 77 percent higher
- homes-near-good-schools-worth-more The average estimated home value across 1,661 ZIPs with at least one good school was $427,402
- The average home value in ZIPs that lack high-performing elementary schools is of $241,096.
- Median home prices in ZIP codes with good schools are up 4.5 percent compared to the same period in 2006.
- The overwhelming majority (83 percent) of metros showed stronger home values near highly-ranked elementary schools.
- Real estate agents can agree that high-performing school districts make for good home investment locations.Many homebuyers figure good schools make for stronger demand at resale, and Attom Data Solutions’ Schools and Housing Report shows that ZIP codes with at least one good elementary school truly do hold higher home values.
The average estimated home value across 1,661 ZIPs with at least one good school was $427,402 — or 77 percent higher than the average home value of $241,096 in the remaining ZIPs that lack high-performing elementary schools.
- Intuitively, buyers already know that schools are important when buying a home, even if they don’t have school-aged children. It’s a nice amenity to have for quality of life,” said Daren Blomquist, senior vice president at Attom.“But this data proves that there is a tangible financial impact that good schools have on home values and home price appreciation over time.”
In order to school rankings and nearby home values, Attom considered good schools to hold test scores 33 percent higher than the statewide average.
Compared to 2006, year-to-date median home price in ZIP codes without good schools is 1 percent less. But, median home prices in ZIP codes with good schools are up 4.5 percent compared to the same period in 2006.
ROI typically stronger near good schools
Since purchase, homeowners near good schools have gained an average of $74,716, or a 32 percent return on investment (ROI). The average ROI for homes farther from highly rated schools is 27.5 percent, or $23,311.
Homeowner ROI in ZIP codes with at least one good school was 3.1 percent higher in San Francisco and 6 percent stronger in New York. In Miami and Chicago, good school ZIP code ROI was 6.7 and 5.9 percent higher, respectively.
In the Houston metro area, the difference in ROI was a staggering 773.9 percent — favoring the good school ZIPs.
On the other hand, Los Angeles and Washington, D.C., showed stronger ROI in ZIP codes without at least one highly-rated school. In both metros, ROI was 4.2 percent higher in ZIPs outside of the good school district.
Blomquist says in these metros specifically, home prices may be lower in ZIP codes without a good school, but those areas are in higher demand right now. Affordability has somewhat outweighed the school affect in certain metros.