Friday, March 24, 2017

Buying for profit; 10 ways to make sure your home keeps going up in value

There’s an old adage that you don’t make money when you sell your home, but when you first buy it. While that may seem nonsensical considering the big, fat closing check you get once it sells, but in reality, the ceiling (and floor) on your profit is first decided when you buy the home. Far from guesswork, there are a host of proven characteristics that will then determine if your freshly bought house appreciates in value over the years, and to what degree.

So when buying, it’s important to consider these factors to ensure that you make your money by buying correctly, delivering the most profit on your house long-term.

Proximity to parks, schools, and other daily conveniences.
Neighborhoods with parks, jogging trails, sports fields and other recreation areas are always attractive to future homebuyers. Likewise, look around for neighborhood grocery stores, gyms, doctor’s offices and hospitals, hair salons, banks, and gas stations in the vicinity when you’re considering buying a home. Drive around in a one-mile radius from your potential new home and check out the restaurants, pubs, cafes, coffee shops, boutiques, art galleries, and other establishments that add character to the community.

But there is no factor more important for predicting future home values that the quality of schools in the area. In fact, high-rated public schools help stabilize future values since young families, so concerned parents will always want to move there and that high-demand will help bolster home values.

Location, location…and you know the rest!
It’s been repeated so often it’s a cliché, but it also happens to be just as true as ever; location is maybe THE most important factor when buying a home. In fact, where your home is can help increase its future value a lot more than what it is. So look for a quality neighborhood above all else since homes in pleasant, safe, quiet, family- neighborhoods always do well when it comes time to sell. Just walk around and you’ll be able to spot signs of pride of ownership, like well-maintained lawns, freshly painted homes, decorated front porches, and other custom homeowner improvements. If you’re able to buy a house in a mature, high-end, or luxury community, you’re almost certain to make money as the values steadily rise over the years. On the other hand, being too close to a prison, halfway house, railroad tracks, or a waste facility may bring down your values no matter how nice your home is.

The higher the ceilings, the higher the home values?
Ceilings that are taller than average always make a home look and feel airy, open, and bigger, no matter how big or small the home really is. However, making your ceilings higher isn’t something you can practically undertake once you already own the home since hiring contractors to raise your ceilings can be incredibly expensive – or impossible. Instead, look for a home with high ceilings when you’re buying, at least 6 inches or even one foot taller than standard building code in the area. You’d also be wise to avoid homes with low ceilings, giving rooms a cramped or smaller look and limiting your potential future home value.

Outdoor living spaces pay big returns
Over the last few years, outdoor living and entertainment areas have been hot commodities, and that trend is expected to continue as people look for usable spaces that allow them to have shared experiences, not just vast and empty lawns. So if you can find a house with nice sitting areas, old-fashioned wrap-around porches, gazebos, outdoor kitchens, or any number of areas to entertain and spend time with family and friends, you’re future values are in good hands.

The caveat to that is that if you’re considering buying a home with a swimming pool, built-in hot tub, or sports courts (like tennis or basketball courts), data shows that they won’t increase the value of the home. In fact, they actually may turn off a certain portion of buyers who don’t want to deal with the maintenance, liability, or expense – or just plain won’t use them.

Natural light brightens up your future home value
When you’re out looking at homes, pay attention to the amount of natural light each one receives in the main living spaces. Natural light always makes your home look bigger, more airy and open, and is flatting to any artwork or décor inside. Of course, you can just switch on light bulbs if a room is dark, but that's never the same. With good natural light, your home's worth will be easy to see when it's time for future buyers to walk through and form a first impression.

Plenty of square footage (but not the largest home in the neighborhood)
Spacious and roomy homes with plenty of square footage are always in demand, but just how much square footage is considered big depends on the neighborhood. But no matter what, it’s never a good idea to buy one of the smallest homes on the block, as the values won't rise like it should. You can easily remodel and upgrade the condition of a house, but adding square footage is so costly and time-consuming that it's usually not worth it.

Flowing, open floor plans
Having a cavernous mansion is one thing, but it’s perhaps more important that it’s planned and laid out correctly. Call it Feng Shui or just good design sense, but single story homes with open, flowing floor plans and great room concepts always do well when it comes to resale value. You also should try to buy a home with at least 3 bedrooms and at least 2 full baths, because any smaller than that and it won’t be attractive to families and young couples that are buying and looking to grow into it. The exception to this is buying in older neighborhoods where most of the homes only have two bedrooms and one bath, for example.

An abundance of comparable homes in the area
It may seem like a good idea to buy a home that really stands out from others in your area (especially since the price tag is probably lower than others in the neighborhood), but in reality, its uniqueness will probably only hamper your future value. Maybe it’s too small, too big, has a classic Roman fountain in the front yard, or has a homemade addition, but whatever the trait that makes it different, it will have little or no comparable properties to boost its value over the years. You never want the biggest or the smallest home in the neighborhood, and this is also true for funky or unique construction, so instead look for a home that has plenty of comparables when an appraiser does their valuation.

Hardwood floors add value and never go out of style
Some things never go out of fashion, and hardwood floors are one of them. While carpet wears out and gets dingy, tile in the whole house looks cold and antiseptic, and linoleum is just, well…linoleum. But as hardwood floors age, they only get more richness and character. Even when hardwoods do start to dull and get scratched up, they’re super easy to refinish and recolor before you move in – or sell – your home.

Focus on the kitchens and bathrooms

No matter which design trends come and go, homeowners will always want big, functional and nice kitchens. These days, kitchens are perhaps the most popular room in the house, a center point for all family happenings. Therefore, well-designed and open kitchens are always a positive when it comes to resale value. The same can be said for bathrooms, with the one exception that bathrooms are must subject to the whims of current popularity that dictate what's in and what's not. But sinks, fixtures, lighting, flooring, and even tile are relatively easy to upgrade in a home, but the space and layout of a bathroom (and having enough of them!) are always fundamental for ensuring your value down the road.

Thursday, March 23, 2017

Taking off with 25 facts about our own Sacramento International Airport


1. The gleaming and modern international airport we now know first opened on October 21 1967, as the one-runway Sacramento Metropolitan Airport.

2. Before that, Sacramento travelers had to drive to San Francisco or the Bay Area for most flights or travel through the limited flights available at the small Sacramento Municipal Airport (now called Sacramento Executive Airport), which still exists in the Rancho Cordova area.

3. Faced with an encroaching population of homes and communities around the old airport in Rancho, city planners commissioned a study in the 1950s to move the airport to a less congested area. 

4. When they proposed the purchase of 6,000 acres of land and breaking ground in present-day Natomas, they were faced with criticism that the new site was too remote and that there never would be enough passengers to justify an airport there. 

5. Nevertheless, Sacramento International Airport is now located only 10 miles northwest of the city’s downtown and covers an area of 6,000 square acres.

6. Its airport code is SMF, or KSMF with the ICAO coding system.

7. When the new Sacramento Metropolitan Airport first opened at its present SMF location, it was estimated that 750,000 passengers would fly in and out of the airport in the first year. However, it quickly surpassed that number, reaching more than one million passengers in the first ear alone.

8. In 2011, SMF flew 9 million passengers with an average of 323 flights per day, but by 2016, the airport grew to accommodates upwards of 10 million passengers.

9. About half of them travel on Southwest Airlines flights.

10. SMF first became an international airport in 2002, when the carrier Mexicana started nonstop flights to Guadalajara, Mexico

11. The airport now serves three international destinations - Guadalajara, Cabo San Lucas and Mexico City with non-stop flights, although some of them are seasonal. 

12. Thanks to their new B.A.R.C. program (Boarding Area Relaxation Corps), there are about 20 therapy dogs and their handlers strolling through the airport, helping travelers cope with their stress or just putting a smile on their faces.

13. In fact, according to the SMF official website, passengers are allowed to bring their dogs into the airport “as long as they are on a leash and under the control of their owner,” although each airline has specific rules for traveling with pets and service animals.

14. SMF features two runways, one concrete and spanning 8,605 x 150 ft., and the other asphalt and measuring 8,598 x 150 ft.

15. The airport also has two terminals, A and B, with 32 boarding gates between them.

16. Due to its close proximity to an avian migratory route, Sacramento International Airport had a real problem from 1990 until 2007 as their planes kept hitting birds. 

17. Despite its challenges with bird strikes, SMF has a sterling safety record, with only three incidents on record throughout its history:

On November 25, 2015, United Airlines Flight 2005 going from SMF to Denver had to turn around after a bird struck the aircraft in flight and caused an explosion in the engine. Luckily, the plane landed safely, and no one was hurt.

That wasn't the case on August 26, 2010, when a JetBlue flight coming from Long Beach blew out four tires upon landing, causing a fire around the plane. Passengers and crew were evacuated, but 15 did sustain injuries, with five hospitalized – although none too serious.

A little more than a year later on December 27, 2011, an aircraft heading to Seattle had to abort its takeoff after it blew out two tires, causing it to make a hard landing, although no injuries were reported.

18. While the tragic events of September 11, 2001, did restrict and reshuffle many airports across the country, it didn't slow the growth of Sacramento's airport. In fact, four airlines were added to SMF's routes shortly after 2001, Frontier (2002), Mexicana (2002), Hawaiian (2002) and Aloha Airlines (2003).

19. However, the real estate crash and Great Recession from 2008 on did provide a significant blow to SMF, with many routes closed as airlines around the US scrambled to stay in business when faced with much lower demand.

20.  In 2006, our little hometown airport became one of the first in the entire US to offer free WiFi to all passengers throughout their terminals.

21. SMF was also the first airport in the US to offer all rental car carriers under one consolidated terminal, making it convenient for patrons and also increasing shuttle efficiency and reducing traffic.

22. There are big plans in the works for expanding SMF airport in the next 20 years, with nonstop flights to international tourist destinations like Beijing, Shanghai, Tokyo, London, and Frankfurt a possibility within the next three years or so. 

23. If you’ve traveled in or out of SMF you’ve probably noticed some unique artwork by local artists, but there are two iconic works that are most recognizable:

24. In the baggage claim area of Terminal A you’ll find two giant columns of suitcases and luggage reaching 23’ high, which is a work by artist Brian Goggin called Samson.


25. But Sacramento’s airport may be best known for its colossal red rabbit in mid jump suspended from the ceiling of Terminal B. Made of aluminum, steel, granite and bronze and painted a uniform cherry red, Leap by artist Lawrence Argent is meant to incite a whole lot of questions from passing air travelers – with few answers why he chose a rabbit! 

Saturday, March 18, 2017

City and neighborhood profile: Loomis, California

Nestled between the Sierra Mountains to the east, The Tahoe and El Dorado National Forests, and Folsom Lake only six miles to the south, the town of Loomis is an oft-forgotten treasure in Placer County. With a colorful history amid its quiet small-town charm, Loomis is also a great place to live, work, and play.

Loomis demographics and location:
Loomis was incorporated as a town in 1984, sitting in Placer County, California, less than 25 miles from the state capital of Sacramento. Per official 2015 estimates, Loomis has a population of only 6,733 residents with a low population density of only 910 people per square mile. 24.7% of Loomis' population is under 18 years of age, and 13% are over 65.

The town of Loomis covers 7.27 square miles and claims the zip code 95650.

The colorful history of Loomis:
Throughout its history, Loomis has also been called Pine, Pino, Smithville, and Placer, but the origins of Loomis can be traced back to one man, James Loomis, a pioneer and founder in the mid 19th century. As the Gold Rush boomed in the foothills around Loomis, the man became the saloonkeeper, railroad agent, and postmaster for the blossoming area. Sitting in present-day Loomis, the Placer post office opened in 1861 to serve the ever-growing needs of settlers. The post office underwent a name change to Smithville only a year later in 1862, in honor of honor of town leader L.G. Smith. The name changed again in 1869 to Pino, but after plenty of mail was lost due to the confusion with Reno, it was finally given the name "Loomis."

In 1890, the Southern Pacific Railroad established a stop in Loomis, which helped the settlement grow and prosper. In fact, by the early 20th century, Loomis was one of the largest fruit-shipping stations in all of northern California. Still to this day, historic landmarks of the High Hand and Blue Goose fruit packing sheds stand in Loomis, as do the Union Pacific railroad tracks, the predecessor of the Southern Pacific.

Loomis was almost annexed into this neighboring town…
Even as recently as the 1980s, there was a growing movement to annex the area of present-day Loomis into the neighboring city of Rocklin. However, Loomis residents voted to maintain their autonomy so their home could retain its small town character and historic charm. Therefore, the town of Loomis was officially incorporated on December 17 of 1984, staying true to its adopted motto, “A small city is like a big family.”

Real estate and housing in Loomis:
There are approximately 2,465 households and housing units in Loomis, with 77.2% of them owner-occupied and 22.8% filled by renters.

Currently, the estimated median value for homes in Loomis is $498,000, about triple the $168,300 value from 2000. Real estate values in Loomis have gone up 3% over the last year and 8.4% the year before, with analysts predicting healthy real estate value appreciation continuing.
New listings sell after an average 89 Days On Market in Loomis with a price per square foot of $253. Loomis also has a median rent of $1,450 per month.

Loomis attracts many buyers from all over Northern California who want to live in a safe, tight-knit community that still has small town charm, but modern amenities and close enough to commute to bigger cities. Therefore, properly priced homes for sale in Loomis move quickly, with more demand than supply in some markets.

Income and the economy of Loomis:
As of 2015, the median household income in Loomis was $89,706, up significantly from the household income of $75,494 in 2012. However, the cost of living in Loomis is around 53% higher than the national average, though not considered high compared to the rest of California.

The industries that provide the most jobs to Loomis residents include construction (20%), manufacturing (17%), retail (10%), professional services (6%), and financial and insurance jobs (5%), among others.

Education in Loomis:
The town's residents tend to be well-educated, with 96.4% of the population over 25 having graduated high school or higher, and 34.7% having achieved bachelor's degrees or higher.

Loomis has a solid foundation of quality public, private, and charter schools serving residents, including the recently opened Loomis Basin Charter School, Compass Rose, Sierra Foothills Academy, and Del Oro High School. In fact, the Valley View Elementary School, Del Oro High School, and nearby Rocklin High all rate10’s in independent school rankings.

Sports teams are very competitive in women's basketball and swimming, but especially the Golden Eagles football program, which has won a section-record 7 CIF championships.

Things to do and see in Loomis:
Loomis sits in close proximity to Folsom Lake, Lake Tahoe, the Sierra Mountains, and the El Dorado National Forests. But residents who want to stay closer to home can enjoy two of Loomis’ great parks, the Loomis Basin Community Park and Sterling Pointe Park, with ball fields, horseshoe pits, bike trails, playgrounds and even an equestrian arena.

Wine lovers can stop by and enjoy a tasting at the local Le Casque Winery Tasting Room or Rock Hill Winery.

Alexander's Horseshoe Bar and Grill is a popular eatery for residents to enjoy a great meal or even take cooking classes.

Golfers enjoy teeing off in Loomis at the 9-holes at Indian Creek Golf Club.

Families gather for summer night fun every Thursday from May through August at the Downtown Loomis Thursday Night Family Fest, and the Loomis Eggplant Festival every October is a popular tradition.

You can check out all of the great festivals, events and activities in Loomis at


According to historical market cycles, when will the next real estate crash occur? (Hint: not for a long time!)

Imagine if you had sold all of your real estate in 2007, right before the historic crash? Understanding the predictable phases of every real estate cycle can empower the average person to make incredibly prescient decisions about their real estate far ahead of the curve, cashing in when others are losing money.

In part one of this blog, we outlined the first two phases of every real estate cycle, Recovery, or Phase I, and Expansion, or Phase II.

We’ll now explain Phases III and IV, and answer the trillion dollar question: When will the next real estate crash happen?

Read on to find out!

Hyper supply
Phase III of the real estate cycle
In Phase III of the real estate cycle, we see a pronounced rise in rents, as the demand for affordable housing to rent outnumbers supply, driving up costs.


Rising rents makes the building of new units more attractive and financially feasible again, so more builders break ground on new projects.

As long as this upward pressure on rent is exerted, the demand for new construction is hot, with builders scrambling to meet that demand for financial gain.

This expansion of new units and rental housing is characteristic of both the expansion and hyper-supply phases of the real estate cycle, as building projects take a long time to initiate and finish.

The first sign of trouble in the real estate cycle
At a certain critical point, the amount of new inventory for both rental and owner-occupied real estate units will start to saturate the market.

Prices on rentals and homes have also been driven up by demand, but now supply has finally caught up with demand thanks to two cycles of consistent building and expansions, reaching a point called hyper supply.

That brings the first leak in the boat or indicator of a downturn in the real estate market: increases in unsold housing inventory and higher vacancy rates for rentals.

As all of these builders finish the new home and new rental unit projects they started back in the expansion phase, the number of available units bypasses the need, so we see the occupancy rate climb above the long-term average.

However, rental process and home prices are still rising, although their rate of growth begins to slow, as the saturated market no longer can justify these prices.

At this point, the market is at a crossroads. What happens next will determine the severity and timing of the inevitable recession, or Phase IV of every real estate cycle

If builders and developers pay attention to the declining growth in rental rates and demand and choose to stop building, the market correction begins. The same can be said for home sellers pricing their houses for sale, although the home buying market finds its true value and corrects itself much faster as there needs to be a willing buyer (and appraisal) for every single transaction.

However, if builders ignore the warning signs and keep churning out more apartments, condos, townhomes, and new home subdivisions, they further flood the market at the worst possible time.

Unfortunately, few builders or developers hit the OFF switch themselves, as they’re motivated by squeezing out every drop of financial incentive possible and not wanting to be the first one to leave the party.

Recession
Phase IV of the real estate cycle

With that critical sign of trouble, we’ve now moved into Phase IV of the real estate cycle, or recession.

As the market shifts from hyper supply to recessionary conditions, we face the second warning sign of trouble as occupancy rates fall below the long-term average.

Builders and developers are forced to stop new construction, but the multitude of projects they began during the hyper supply phase are still reaching completion.

This additional unneeded inventory leads to lower occupancy rates but also lower rents (and home prices), as buyers and renters have more and more to choose from, which start devaluing real estate.

The third warning sign is upon us, an increase in interest rates, which acts like a match thrown on a pile of dry timber to ignite a full-on housing recession.

Sooner or later, the Federal Reserve is driven to increase interest rates to fight inflation brought by the rapid expansion of prices we saw through the expansion and hyper-supply phase.

As interest rates climb, developers and builders slam on the brakes and stop building any new projects, as an increase in borrowing costs doesn’t make new development feasible or attractive.

However, the market is suffering through dropping occupancy rates, lower rents (and housing prices) because of oversupply, and higher interest rates for home buyers.

In combination, this quickly creates a negative ripple effect across the real estate market and affiliated industries, from builders and developers to home sellers desperate to cash in on the (missed) high point of their equity, landlords, income for realtors, loan officers, bankers, appraisers, title company reps, inspectors, attorneys, construction companies, laborers, etc. all the way down the line.

When vacancy rates start plaguing landowners, sellers, and builders, values plunge, with foreclosures soon following. The real estate cycle has come full circle.

How long do these real estate cycles last, and how often do they come around?
While it may seem like prices drop and the market changes overnight, the real estate cycle is as predictable as clockwork. By carefully studying the real estate market and every pattern of ups and downs throughout our history, respected economist Homer Hoyt discovered that the real estate cycle gone through this course of the four phases once every 18 years, all the way back to 1800.

The only two exceptions to this rhythm were in for World War II (he earlier noted that wars and world events could disrupt the cycle) and when the Fed inexplicably double the interest rates in 1979.

So according to Hoyt’s research, when will we see the next real estate crash?
The housing crash of 2008 and subsequent Great Recession definitely triggered our movement into Phase IV of the real estate cycle.

The market moved from the recovery phase to the expansion phase around 2014 or so. In fact, some major metro markets like Boston, New York, Denver, and San Francisco, etc. are already seeing a hyper-inflated rental market, accompanied by builders scrambling to meet demand and cash in as quickly as possible

So according to those projections and the typical pattern of this cycle, real estate values will peak in 2024, after which the recession phase begins anew.


Saturday, March 11, 2017

Home staging helps home sellers cash in with higher profits and quicker sales.

Last year, 5,250,000 existing homes sold in the U.S according to the National Association of Realtors. There were 510,000 newly constructed homes sold as well, which means that every single day an average of 15,780 home sales closed in the U.S.

If you're trying to sell your home, that means you have some SERIOUS competition, all wanting to sell their listing quickly and for top dollar. So how can you stand out?

Of course, it’s important to have a great Realtor on your team that specializes in home sales like Anthony Alfano and the Alfano Group team. But homeowners also have a secret weapon that will help them separate their listing from the competition, attract more qualified buyers, sell faster, and for higher prices: home staging.

In this blog we’ll cover some of the hard facts, statistics and data on just how effect home staging is for selling homes quickly and netting sellers higher profits.

What’s the average cost to stage a home for sale?
Last year, home staging cost a median of $675 for home sellers.

Of course, it will cost more to properly stage a high-end or luxury home, but it’s important to remember that the ROI will be the same or even better, netting far more for the seller.

How much extra money are buyers willing to offer for a staged home?

According to national surveys:
4% Of staged homes see an increase of 16-20% of the home’s value
8% See an increase of 11-15% of the home’s value
22% See an increase of 6-10% of the home’s value
37% See an increase of 1-5% of the home’s value
10% Of the time, home staging has no impact on the dollar value
0% Of the time, staging a home has a negative impact on price
19% Of the time, the effect of home staging on prices in not determined

Data reveals that homes that are staged also sell for an average of 6% above the asking price!

What’s the effect of home staging on Days on Market?
An independent survey showed that staged homes spend only half as many days on market as non-staged homes.

Time is money when it comes to selling a home – and staging saves time:
A National Association of Realtors (NAR) study seconded that when it found that the longer a home stays on market, the further the price drops and the less it will ultimately sell for.

Since 90% of homebuyers first start their search online these days, your listing photos will really stand out and attract more buyers when your home is staged.

The same NAR survey found that the average staged home has an ROI of about 8-10%.

A comprehensive study found that homes that were staged AFTER they were already listed sold in an average of 198 days.

However, when homeowners had their homes staged BEFORE they listed them for sale, these properties sold in only 42 days!

That means homes staged pre-listing sold 79% percent faster than those staged post-listing.

What do Realtors think about home staging?
32% of real estate agents report that staging a home increases the dollar value that buyers are willing to offer by a substantial 1-5%, particularly on medium to high priced listings.

To put that dollar increase due to staging in perspective, that means the sellers would see $3,500 to $17,500 more on a $350,000 home sale!

That’s just a start to the financial benefits of staging, as 16% of real estate agents believe staging actually will increase the price their buyers offer by 6-10% which would be up to $35,000 on that same $350,000 home.

How do home buyers feel about staged homes?
Of course, realtors have a great perspective on home staging, but what if we asked those same buyers we're trying to attract?

In fact, 81% of buyers say it’s easier to visualize themselves living in the home when it’s staged, and 28% overlook the home’s faults when it’s staged.

46% of buyers are more willing to go view and walk through a listing they saw online when it’s staged.

What do buyer’s agents think about the effects of home staging? 49% of agents representing the buyer feel that home staging helps influence most buyers, while 47% feel at least some buyers are affected by staging.

How many sellers’ agents recommend staging?
34% of listing agents stage all of their homes for sale
13% Only stage homes that are difficult to sell
4% Stage only high priced listings
44% De-clutter and fix the property only without staging.

Which rooms are most likely to be staged?
            1          Living room
            2          Kitchen
            3          Master Bedroom
            4          Dining Room
            5          Bathroom
            6          Children’s Room
            7          Guest Bedroom

Who pays for home staging?
62% Of seller’s agent offer home staging services to sellers as part of a full-price commission package.
39% Of homeowners pay to have their home staged before the home is listed.
10% Of homeowners pay the stager after the home is sold.
3% of the time, the real estate agent’s firm pays for home staging services.

***

Contact us for more information about staging your home or selling for top dollar!