Neighborhoods, price will be top factors for future homebuyers
Today it’s the house of your dreams. But what will it be worth to someone else down the road? That is a difficult determination to make, especially if you are rushing to decide which home to buy in time to cash in on the soon-to-expire homebuyer tax credits.
Considering the resale value of a home is not the sexiest part of the buying process but it is critically important. Purchasing a place with solid resale potential will help ensure your financial stability and could even put a few dollars in your pocket when you move.
“The things that are important to buyers are location and price,” said Jane Fairweather, a Realtor with Coldwell Banker Residential Brokerage. “Those are the fences around the search. Within that it’s a compromise.”
Resale values differ from neighborhood to neighborhood, but buyers can examine the history of a location to gain clues about its potential future value. Some important factors to consider are how long a particular neighborhood has been a top choice for buyers, the trends for new growth in the area, the demographics of the community and its proximity to essential services, such as shopping and schools.
“Every buyer comes with their own set of concerns and issues,” Fairweather said. “If they have young kids, they’re going to want all the bedrooms and bathrooms on one floor. If their kids are older, teenagers, one can be in the attic, one can be in the basement. Some people think it’s important that the kids walk to school. It depends on the family.”
Today buyers are keenly interested in the efficiency of a home, said Candace Watts, an appraiser and real estate agent in the Washington area.
“Are the windows well-insulated? How old is the house? What kind of heating unit does it have?” she said.
The old adage that you never want to have the most expensive house in the neighborhood generally still rings true, according to Watts. Selling the neighborhood’s most expensive house often can be difficult. Look for a home that fits your needs but is less expensive than the neighborhood’s most pricey property and more costly than its cheapest home.
It’s important not to judge a home too hastily just on its aesthetics, whether they appear sharp or shoddy.
“There are going to be different levels of renovation,” Watts said. “A contractor who’s flipping a house usually isn’t going to use top-level products.”
Conversely, don’t be turned off by paint colors you don’t like, old light fixtures or a yard that’s not kept to the nines. You can easily and inexpensively change those features yourself to make the home more your style and boost its resale value.
Buying a home is a long-term investment. Three to five years used to be the minimum amount of time before selling made economic sense, but since the housing market bubble burst and the economy went south, that period has increased, Fairweather said.
“Don’t ask me to sell this house [at a profit] in less than seven to 10 years, because that’s the market you’re in now,” she said. “Everything you read about this recession says that housing is going to come back in 10 years or more. I don’t make any promises. I tell [clients] that if you’ve got to move in three years, you should be looking at rentals.”
