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Kitchen Remodeling Projects That Pay Off

Kitchen redos can be pricey. That means home owners on a budget must be choosy when trying to decide what kitchen projects to spend money on and what improvements can wait.

Realtor.com® recently launched a new series “Renovations That Really Pay Off,” and their first article focuses on kitchen projects that have the best return on investment and won’t be too much of a financial burden for your clients.

Here are a few of the kitchen projects highlighted:

“Amped Up” Appliances

New appliances like a refrigerator, stainless-steel dishwasher, and stove can have a strong pull with home buyers, says real estate pro Al Cannistra. For example, Cannistra says he had a listing that lingered on the market with outdated appliances but as soon as the owners updated the appliances, the home received two offers in the first week and the home ended up selling above asking price. Just be sure to “keep the appliances and plumbing where they are because the rule of thumb is to add $5,000 each time you relocate either,” suggests Justin Riordan, founder of Spade and Archer Design Agency

Spruce up the cabinets

New cabinets can range from $3,900 and $12,000. That’s why home owners may be better off trying to give a face-lift to what they already have, such as replacing the cabinet hardware or painting the cabinets. “If you have existing wood cabinets that are still in decent shape, instead of completely refacing them, give them a fresh coat of paint,” says Tracy Kay Griffin, designer for HGTV’s “Get It Sold.” For example, Rust-Oleum offers a Cabinet Transformation kit.

Add a charging station

Everyone is looking for a plug to charge for their smartphones, tablets, and electronics. Nearly two-thirds of remodelers say they’ve added a charging station in the kitchen for the gadgets, according to the National Kitchen and Bath Association’s annual trend report. Cabinets and drawers can be modified to add hidden power strips, for example.

New countertops

A new countertop can have a big impact on the look of the kitchen. And don’t assume granite. NKBA says quartz countertops are gaining popularity. A new countertop “provides an opportunity to install a new glass or subway backsplash for additional punch,” says designer Erin Davis, co-owner of Mosaik Design & Remodeling in Portland, Ore. “A budget-friendly option is to install a 4-inch-high splash out of the same countertop material.”

Wood floors

NKBA’s latest report shows that wood floors are the most popular kitchen flooring. Plus, averaging $9 to $12 a square foot, wood flooring tends to be cheaper than tile too.

Source: “6 Kitchen Renovations That Really Pay Off,” realtor.com® (March 2, 2016)

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Purple Line Construction to Start Later This Year

Rendering courtesy Maryland Transit Administration

Rendering courtesy Maryland Transit Administration

 

Construction on the long-planned Purple Line rail system connecting Montgomery and Prince George’s counties is expected to begin later this year following Maryland Governor Larry Hogan‘s announcement Wednesday that the state has selected a contractor for the project. Purple Line Transit Partners—a consortium led by construction company Fluor Enterprises—was awarded the $3.3 billion contract to build the 16.2-mile line and operate it for 36 years.

While Hogan’s announcement today is a relief to transit proponents—who feared the Republican’s 2014 election would mean certain doom for the Purple Line—the governor also announced even more cuts to the railway’s overall funding. The state government will pay the contractor $159.8 million for up-front construction costs instead of the $168 million Hogan’s administration pledged last year. Once the line is running, Hogan’s office says Maryland will pay $149 million annually for its operations over 30 years, down from the $167 million yearly payments suggested in 2015.

The contract approved today brings down the Purple Line’s overall cost an additional $550 million, Hogan’s office says. The administration’s cost-shaving has forced Montgomery and Prince George’s counties to beef up their contributions to a combined $330 million, while the federal government plans to contribute $900 million over several years. Hogan’s transportation priorities have been more attuned toward cars—last June, he announced nearly $2 billion in funding for road and bridge projects, including the widening of many highways across the state.

When complete, the Purple Line will run from Bethesda to New Carrollton, carrying as many as 70,000 riders per day through 21 stations, according to transportation planners. The line is expected to enter service in 2022.

Source : Washingtonian.com

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Solid gains in 2015 portend a strong D.C. housing market in 2016

Dean Cottrill is president of the Coldwell Banker Residential Brokerage Mid-Atlantic region.

The Washington area’s residential real estate market was healthy and relatively stable in 2015. Sales and prices were up and demand was solid, though perhaps not as much as many agents expected.

Though we’re still fighting the low inventory levels that are driving this seller’s market, we saw a more normalized rate of price increases and a slight uptick in days on the market, both of which can help move the market into a more balanced position. Overall, things were nice and steady, and in real estate, steady is good.

There were several bright spots in the market worth mentioning. First, the metro area remains strong and in demand. After years of population declines, D.C. is growing again. Buyers really crave the walkability and convenience of living within the District, which keeps already-hot areas like Georgetown, DuPont and Logan Circle highly sought-after and is driving revitalization efforts in other spots like the Southwest Waterfront and Southeast Washington. It’s exciting to see new life in the region – including both new residents and new developments.

Looking at the larger metro area, we also saw surging interest in Reston and outer Fairfax County. The extension of the Silver Line and proximity to Dulles International Airport provides highly desirable accessibility, and builders there are meeting the demand for expansive square footage and minimal yard maintenance. It’s the right combination of what buyers want, where they want it. Prices rose 6.8 percent in Prince George’s County, good news for a jurisdiction that has experienced a high number of foreclosures and short sales.

Additionally, despite ongoing low inventory, investors were still able to find properties within the District in need of rehab to repair, renovate and put back on the market. Theirs is a welcome presence in the market, as today’s buyers are mostly uninterested in taking on any projects. They want finished, upgraded and move-in ready properties that they can start enjoying from day one.

On the other hand, we also noticed a few weak spots in the market. First, there seemed to be an overall lack of motivation among potential buyers. With mortgage interest rates holding steady all year, they just didn’t feel an urgent need to get off the fence and commit.

Sellers were likewise largely unmotivated, with lackluster wage growth and lingering concerns from the recession and sequestration making them hesitant to put their houses up for sale and move up to bigger or more expensive places.

There have been some recent changes that could influence both buyer and seller motivation as we move into 2016, though. In December, the Fed raised key interest rates for the first time in more than a decade. Typically when mortgage rates fluctuate, potential buyers and sellers are spurred into action, so it will be interesting to see if that happens in the months ahead.

Continued improvements to the economy, job market and consumer confidence are additional factors that might impel existing homeowners to list their properties. In fact, a December article by Realtor.com’s chief economist predicted that 2016 will be the best year in recent memory to sell. Low inventory is helping properties move quickly, while moderate price gains means it doesn’t necessarily make sense to hold off on selling with the hope of increasing profits.

Of course, no one can predict exactly what the future holds, especially in the ever-changing world of residential real estate. When I talk to local agents, though, about the year that was and the new one ahead of us, there’s a genuine sense of anticipation. They’re looking forward to 2016, whatever it brings.

Source : Washingtonpost.com

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Why DC’s Housing Inventory Growth Will Turn Negative in 2016

 

january_active_listings

It is not what homebuyers in the region want to hear, but real estate watchers in the DC area believe that the growth of housing inventory in the region will turn negative at some point in 2016.

The prediction is largely based on the cyclical nature of the market, Elliott Eisenberg of RealEstate Business Intelligence explains, and the market is reaching a point where inventory has virtually stopped increasing.

“Inventories declined steadily from March 2011 through September 2013,” Eisenberg told UrbanTurf. “Then in October 2013, inventories reversed course and began to increase. At first the year-over-year increases were small, but then they got bigger and bigger until peaking in August 2014 with a year-over-year rise of 34.6 percent. Since then they have been steadily declining for almost every single month since October 2014, a period of almost 1.5 years.”

Eisenberg says that due to these historical cycles and sustained buyer demand, he believes inventory growth will turn negative again in the coming months.

“I do not know if it will be in April or May or June, but I bet it will happen by mid-year,” Eisenberg said, anticipating that the cycle of negative inventory could last for 18 months.

So, what will that mean for the regional housing market? More of the same, essentially, specifically homes spending less time on the market and prices increasing based on low supply and high demand.

Source : DC.Urbanturf.com

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The 1,101 Units Coming to Connecticut Avenue

UrbanTurf has started the year off by looking at the residential developments in the planning or construction phase for neighborhoods across DC. This week, we focus on the residential developments on tap for one of DC’s main arteries: Connecticut Avenue.

We cover those projects, from north to south, below, and include a couple that are not on Connecticut Avenue but were worth mentioning because of proximity.

5333

Fifty Three Thirty Three

Calvin Cafritz Enterprises is in the final stages of constructing a 263-unit apartment building at 5333 Connecticut Avenue NW (map). The Chevy Chase building will offer residents a community room, business center, gym, courtyard, and rooftop infinity pool, as well as a yoga room and rooftop dog walking area. The apartments feature Cambria Torquay counter-tops, hickory wood floors and Bosch stainless steel appliances. The building aims to start delivering in winter 2016.

PARK_VAN

Park Van Ness

B.F. Saul is replacing their Van Ness Square retail complex with a LEED-certified mixed-use development that will have 10,000 square feet of commercial and retail space sandwiched between 271 apartments. The site at 4455 Connecticut Avenue NW (map) abuts Rock Creek Park and is two blocks from the Metro station. Retail will include a Soapstone Market and a new restaurant from the team behind Fiola, Fiola Mare, and Casa Luca.

The apartments, which should be ready for move-in this spring, will be a mix of one, two, and three bedrooms, with black granite countertops and Carrara marble floors in the bathrooms. Select apartments will have direct access to the parking garage and/or private roof terraces. Amenity spaces will include a club room with terraces, four courtyards, and a decked-out rooftop with a kitchen and entertainment spaces.

POOL_550

South Cathedral Mansions

This project, a partnership between CAS Riegler and Commonwealth Residential, is a historic renovation and expansion of a Harry Wardman apartment building at 2900 Connecticut Avenue NW (map). Once completed, there will be 165 one, two, and three-bedroom apartments, as well as a spa, gym, and dog run. Expected to be ready for March move-ins, the grounds will also feature a space with an indoor-outdoor lounge and pool, grills, test kitchen and coffee bar.

DBOX_Wardman_550

Wardman Tower

Located at 2660 Connecticut Avenue NW (map), this is another Wardman building originally constructed in 1928. The building has been renovated by a development team of the JBGCompanies, a U.S. branch of Japanese builder Sekisui House, and architect Deborah Berke Partners over the past few years.

Once completed this spring, the building will contain 32 luxury condominiums in the $3-$9 million price range. The new units will range in size from two to four-bedrooms, and 2,200 to 4,600 square feet. Amenities will include a fitness center/yoga studio and a resident library-lounge with a garden.

hepburn

The Hepburn

Lowe Enterprises and National Real Estate Advisors are bringing 195 luxury apartments to the Washington Hilton. Located at 1901 Connecticut Avenue NW (map), the apartments will range in size from 450-square-foot studios to 2,000-square-foot three bedrooms. The roof will have fire pits, a water feature and 8”-deep lounge pool, private grilling/dining areas, and a TV and cabanas, in addition to amazing views of the National Cathedral and Washington Monument. Some units will have private terraces or wraparound balconies, and residents should be able to enjoy the Hilton’s room service and can purchase a membership to their lap pool. The expected completion date for the development is this summer.

patterson

Patterson Mansion

This historic Dupont Circle mansion, completed in 1903, once housed President and Mrs. Calvin Coolidge while The White House underwent renovations. After having been the home of The Washington Club since 1951, SB-Urban and Hartman-Fox’s redevelopment of 15 Dupont Circle NW (map) will create 90 fully-furnished micro-apartment studios at 350 square feet apiece. The existing first floor will be a shared amenity space. Like its Blagden Alley project, SB-Urban expects that the building’s tenants will be largely upscale professionals coming to DC for temporary stints.

1745n550

1745N: The Row and The Flats

This Madison Homes-led project restores six long-vacant historic rowhomes into a two-part condominium complex at 1743-1755 N Street NW (map). The Row will be the historic portion of the project, containing 31 condos, while The Flats will be 39 loft-inspired condos built behind The Row and connected to it by a courtyard. The development team also includes Resmark Companies and Innovative Development Group, and McWilliams|Ballard will handle sales for the units, which are expected to be available some time this year. Because there will only be 13 parking spaces, purchasers will receive complimentary five-year memberships to Capital Bikeshare.

adle

The Adele

Located at 1108 16th Street NW (map), this brick and stone building incorporates a historic 1920’s facade into a luxury condo development. There will be eight stories — four with a total of 18,000 square feet of office space, and four upper floors with 14 luxury and one affordable unit. An attic story with ornamental cornice will top the building, which will also feature bay windows and juliette balconies above the historic lower portion. Red Multifamily Development expects the building’s completion in winter 2017.

Source : DC.Urbanturf.com

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Why asking for too much when first listing your home can cost you big bucks

 

PriceReduced

David Howell, executive vice president and chief information officer at McEnearney Associates, writes an occasional column on the Washington area real estate market.

It is critically important to price a home correctly when it first comes on the market. The reason is simple: The greatest numbers of buyers are going to see the house during the first two or three weeks.

Sellers who price their home correctly are likely to be rewarded. Those who overreach, who think they can “just wait for the right buyer to come along,” are likely to be disappointed, as that usually means the house will sit on the market and take a big hit financially.

Recently, my team at McEnearney Associates took a look at all resale homes that went to settlement in the Washington area in October and November and broke them down into just two categories: Those that had to reduce their initial list price before receiving a ratified contract (homes with the “wrong” price). And those that came on the market at the “right” price and never had to drop their list price.

The consequences of pricing strategy were starkly different, as the table shows. Homes that had to reduce their price before attracting a buyer were on the market three times longer — an average of 98.1 days — compared to correctly priced homes that sold in just 30.1 days. Sellers of homes with the right initial price were less likely to pay any subsidy, and when they did, it was likely to be a smaller subsidy.

But the biggest impact of pricing strategy is on the seller’s bottom line. Homes that sold without having to reduce their price sold for an average of 98.4 percent of the list price. Those that came on the market too high had to reduce their price by roughly 6 percent before a buyer was willing to make an offer. And when that offer came in, those sellers had to negotiate a further reduction, ultimately settling at an average of 10 percent below their original price.

Are there exceptions to this? Of course — but not many. And does this vary by area? Yes. The differences are even more pronounced in the hotter market areas, and below we’ve broken out our analysis for Loudoun County, Montgomery County and Washington.

Homes that hit the market at a price that attracts buyers are sold in an average of just one month and sell very close to list price. The wrong price means more than 90 days on the market and a 10 percent discount to original price.

Buyers will move forward on homes that are priced correctly, and they will take a pass on ones that aren’t. Getting the price right from the beginning is the most important thing a seller can do. It really is that simple.

The impact of pricing strategy is similar for each jurisdiction. Getting the price right when a home first comes on the market pays dividends for sellers.

In general, homes that had to drop their price before attracting a buyer were on the market three times as long as those that were priced correctly. In D.C. — the hottest market in our region — it was four times as long.

Correctly priced sellers in D.C. also had a better bottom line, with homes selling on average right at list price. Those sellers that had to drop their price took a bigger hit than elsewhere in the region, selling on average almost 12 percent below the original list price.

Source : WashingtonPost.com

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What to expect in the 2016 housing market

David Charron, president and chief executive of Rockville-based multiple-listing service MRIS, writes an occasional column about the Washington area real estate market.

While 2015 has been a good year for the real estate market, we expect 2016 to be even better. The Washington area weathered the ups and downs of the past few years without as many difficulties as most other regions in the country, leaving us in a stronger position to take advantage of the return to a favorable real estate climate.

Mortgages aren’t as difficult to obtain for most buyers, more homes are coming to market, and several programs by Freddie Mac and Fannie Mae have rolled out to make buying a home more accessible to first-time purchasers. For the coming year, the following are the things we anticipate will have the biggest effect on whether 2016 turns out to be better than the last:

Interest rates
All eyes are on the interest rates. They have been so low for so long that just about everyone expects them to rise several times during the coming year. The increases will start off in small increments, so we don’t anticipate a sudden impact on the housing market, but it could make it more difficult for some buyers to qualify for a mortgage.

However, the pent-up demand for buying a home in the D.C. area is large enough to offset the potential loss of those who won’t be able to qualify for a mortgage as rates increase. After all, buyers have had a few more years to save up for larger down payments and improve their credit scores so there are more qualified buyers than even a few years ago.

Timing
Given the predicted rise in interest rates, the selling season might kick off earlier than usual. Buyers will want to lock in as low of a rate as possible. The ones who know that they want to buy a home this year will most probably try to get a head start on finding one that fits their needs before rates rise again.

Spring real estate activity is also always weather-dependent. Heavy snow late into February and March can deter people from going out to tour homes. That has a domino effect in delaying any offers, which then delays the final closing date. Thus, only if we have a mild winter do I predict an early start to the spring market.

Inventory
The lack of homes for sale has been the biggest factor affecting real estate for the past few years, but all the numbers indicate that we have finally turned the corner with more homes coming on the market. In 2015, the D.C. metro area saw an increase in the number of homes for sale every month when compared with last year. Year-to-date through November, the number of homes sold was 9.5 percent higher than the same period last year, and we expect to see a greater number of homes come to market in 2016.

There is more activity in new construction, which brings new listings to market. Homeowners also have regained more equity these past few years, putting them in a much better position to sell than they have been in recently.

Prices
The median sales prices for our area are definitely on the upswing, and we expect this to continue well into 2016. In May, the District set a record high of $560,000, but for most months of the year, median sales prices in the D.C. metro region averaged $410,000. Even though we expect prices to continue increasing, we don’t think there will be a sharp rise. It is also likely that the rate of increase will slow down compared with 2015. Since a greater number of listings usually translates into prices staying competitive, we’re unlikely to see any dramatic increases next year.

Thankfully, 2015 has been relatively peaceful for real estate. There were more homes for sale, which kept the market moving at a healthy pace, and the interest rates made buying a very attractive option over renting. We fully expect more of the same trends in 2016 without too much upheaval in any segment of our market.

Source : WashingtonPost.com

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Homeowners take note: You may have more tax deductions than you know

The 2016 tax year officially opened Jan. 19 when the Internal Revenue Service started accepting 2015 tax returns.

Despite rumors that several valuable homeowner deductions might be eliminated or modified, taxpayers are in luck this year. In mid-December, Congress passed the Protecting Americans from Tax Hikes Act of 2015. Many exemptions that would have expired were extended for a year or more, and others were made permanent.

Spared were the exemption for private mortgage insurance to protect the mortgage holder; the tax credit for energy-efficient home improvements; and the exclusion for mortgage-debt forgiveness for owners of a foreclosed or short-sale home.

The elimination of those allowances would have been a significant financial setback to many homeowners. According to a recent National Association of Realtors survey — Profile of Home Buyers and Sellers (November 2015) — 80 percent of home buyers view home ownership as a good investment, and 43 percent believe that buying a house is a better investment than putting money in the stock market.

The association estimates that homeowners save an average of $3,000 a year in taxes from mortgage-interest and property-tax deductions.

To take advantage of the tax breaks allowed homeowners, Schedule A of the IRS Form 1040 must be completed. The IRS provides information in its Publication 530 ( www.irs.gov/publications/p530 ), which outlines what can — and cannot — be deducted.

Lisa Greene-Lewis, a certified public accountant and a tax expert for online tax preparer TurboTax, pointed out that its program asks homeowners specific questions related to a home purchase or homeownership to prevent any allowable deductions from falling through the cracks.

For example, Greene-Lewis said, the program will ask such questions as: Are you a homeowner? Did you pay points? Did you refinance the mortgage?

Brian Davis, a CPA with Ross and Moncure in Alexandria, Va., said that most of his homeowner clients are aware of the common deductions. But they often need to be reminded of others — such as points paid on a prior refinance.

“If a homeowner paid points on a refinance in the past and then obtains a new refinance loan, the balance of the points from the prior loan may still be deducted,” Davis said. He also said clients should keep track of any large capital improvements they make to the home because those expenses can be deducted — to help reduce any capital gains tax that might be due — when the property is sold.

If you purchased a home last year, some costs associated with the sale will be deductible; others may not be. Look at the closing statement (either the HUD-1 or the replacement Closing Disclosure form used after Oct. 3, 2015) to determine what is allowed.

The items on the closing statement will fall into three categories relevant to your tax return: tax-deductible in the current year; capitalized (added to the price paid for the property and, therefore, part of your base for capital-gains-tax purposes when you sell); neither (personal expense).

Some tax-deductible items include mortgage interest, points, loan-origination fees, prepayment penalty, property taxes and PMI. Capitalized items include pest-clearance costs, title-insurance premiums, and attorney, appraisal, recording, notary and escrow fees. Personal expense items include fire insurance premiums, money paid into an impound account (funds held in reserve by the lender to pay property-related costs, such as property taxes and insurance) and condo association fees.

Here are facts about some deductions that you may not be aware of:

  • Mortgage interest on a refinance, a home-equity loan or a home-equity line of credit may be deducted as an expense.
  • Private mortgage insurance may be deductible for a second property in addition to a primary residence (as long as the second home is not a rental unit).
  • Discount points — paid to lower the interest rate on a loan — may be deducted in full for the year in which they were paid.
  • Discount points on a refinance must be amortized over the life of the loan.
  • Home improvements made for medical reasons can be tax-deductible under certain circumstances.
  • Homeowners who work from home can generally deduct expenses for a qualified office — phone lines, heating and electric expenses and renovations — including a portion of mortgage interest, property taxes and insurance.
  • The deductibility of a mortgage varies with the length of the loan. Homeowners pay about 65 percent less mortgage interest with a 15-year mortgage than with a 30-year loan.
  • An energy-efficiency tax credit may apply to storm doors and energy-efficient windows, insulation, air-conditioning and heating systems. The credit is currently 10 percent of the amount paid up to $500.
  • Mortgage-debt relief related to a short sale or foreclosure has been extended to include cancellations completed during 2015 and 2016.

Source : WashingtonPost.com

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Reporting Rental Property Income in DC

If you own a rental property in DC, you are considered an unincorporated business and must file the DC D-30 tax form to report your rental income. If you have gross rents over $12,000, the minimum tax is $250. Repairs, payments, etc. can be calculated to determine your actual taxable income.

If you have gross income under $12,000, you do not need to file and no payment is required.

Be sure to remind whoever prepares your taxes of this required form. Please consult your accountant, adviser or contact the DC Department of Tax and Revenue (202-727-4TAX) if you have any questions about the form or any other tax issues. The DC D-30 form and more information can be found here.

The information provided on my blog is for informational purposes only!