To move or to remodel?
I've just spent the last two months getting paint out from under my expensive manicure and trying to keep my mouth shut every time my husband asks, "Are we done yet?" But that's the price you pay for doing a home renovation. Is it worth it or is moving easier? In today's market you may not have a lot of options.
There's a lot of buzz about the lack of inventory in the real estate market nationally which keeps pushing prices up around the country. Again in July, the National Association of Realtors reported that the pace of existing home sales decreased 3.2 percent from June, and compared to a year earlier July sales were down 1.6 percent.
Everyone loves when sale prices go up and according to the Case Shiller 20-city home price index prices have grown at about a 5 percent pace since early 2015. However, a lot of potential buyers are being pushed out of their affordability range every month creating the proverbial logjam of first time buyers who can't afford to buy and trade up buyers who can't sell and, therefore, can't buy their next home.
According to the Realtor Association of Sarasota and Manatee counties, Manatee County in July closed 0.7 percent more single family homes and 11.5 percent more condos from July of last year. The median sale price for single family homes in July this year compared to July last year was up 11.7 percent to $279,250, and the average for single-family homes was up 19.9 percent to $355,374. As stated condo sales closed 11.5 percent more properties from July of last year, with the media price higher by 21.9 percent to $185,250 and the average sale price up 8.8 percent to $230,839.
As far as inventory in Manatee County is concerned, comparing July of last year to July of this year, single-family homes had 19.5 percent more properties available and condos had 12.2 percent more properties available. Even though Manatee County's inventory is slightly higher, don't be fooled. It's still summer, and the buyers haven't arrived yet. The number of months of available inventory for both single family and condos remained similar to what we've been experiencing all year at just over a 4 month's supply. Nationally the number of month's supply of properties as reported by the National Association of Realtors at the end of July was 4.7 months, a number that has fallen for 14 straight months. Anything below a six-month supply of available properties is considered abnormally low.
This was a long way to get back to home remodeling, but with the real estate market forcing homeowners to stay put, many of them are opting to renovate rather than move. Economists are forecasting that investment in residential remodeling and repairs this year will surpass records set during the housing boom in 2007 and are expected to continue rising over the next three years.
In addition, our homes are getting older, even in Florida, which always had a large percentage of new construction. Homes built more than 30 years ago now make up 65 percent of the nation's housing supply according to census data. In spite of the mess and inconvenience of remodeling, buying a new house, moving and obtaining a new mortgage is even more massive. Interest rates are low and because of increased property values, equity is high – the perfect storm for a home equity loan for the remodel.
So take it from me. Cancel your next few manicures and get out the paint brush, the hammers and nails and the telephone number of a qualified contractor. As bad as it seems, the project will eventually end without the need for a moving truck.