Madison Real Estate Values – On the Rise

Finally, after the recession, Madison real estate values rose 3.5 percent, which is the first increase in value of the average home in six years.

As reported by the South Central Wisconsin MLS, the number of new listings were flat with 23,502 in 2014 compared to 23,404 for 2013. Year over year the number of sales decreased less than 1%, however, the average sale price increased just over 1% to $193,340.

“Real estate values are recovering in a very significant way in Madison,” Mayor Paul Soglin said. “We can expect to see more recovery in future years. It’s because of the strength of the people of Madison. This is a desirable place.”

“It’s good news for the state,” said Todd Berry, president of the Wisconsin Taxpayers Alliance. “It suggests values statewide
will finally go up.”

According to the Wisconsin State Journal, the bright spot is $392 million in new construction — a 76% rise over the previous year and the most since 2007. The construction includes the high-profile project – The Edgewater Hotel redevelopment on Lake Mendota.

The building boom is critical for the city, which has increasing costs but is under state revenue limits that restrict increases in tax collections to the growth in net new construction of buildings, additions and remodeling minus the value of properties that have been demolished. Revaluations of residential properties — single-family homes, condos and apartments with up to three units, rose $288 million, the first increase for that category since 2007 as reported by the Wisconsin State Journal.

“We’re seeing bidding wars again,” said Jo Ann Terasa, assistant assessor for residential property, adding that homes are selling more quickly. “We’re back to days and weeks opposed to months and years.”

Wonder what your home is worth? To find the value of your home you can visit my website, I would be happy to send you a Free Comparative Market Analysis.

Whether you’re thinking about selling your home, or are considering purchasing a new luxury home, contact Mardi Stroud – Madison’s real estate expert — at 608.469.5555.

You can also follow me on Facebook or LinkedIn to read more of my blogs with information about the local market and many other subjects.

The Beauty of Hardwood Floors

Whether it’s a residential interior, or a commercial installation, hard wood floors add an air of class, as well as structural strength. Hardwood floors are said to lend a sense of permanence to an interior and remain to be the most popular flooring choice for those who value tradition the most.

But then there are reasons, beyond the traditional values, which make hard wood floors a practical and decorative preference. Here is an overview:

1. Straight-forward installation for those with experience: quality hard wood floors are specifically engineered to ensure a uniform and stable fit. The choice between finished and unfinished hard wood floors is an important factor in this, of course.
2. Easy to clean: Hard wood floors are very easy to clean as they do not accumulate a lot of dirt, dust, and debris. A weekly cleaning procedure involves vacuuming, moping and keeping the floor dry. That’s it!
3. High quality look: Hard wood floors give an elegant aesthetic and high-end look. Hard wood floors offer the warmth, beauty and value of wood and never goes out of style. Hard wood floors are also said to enable a look of spaciousness wherever they are installed.
4. Strength and durability: High quality hard wood floors that are kiln-dried, manufactured, installed and finished to certain standards can last for generations. The hard wood floors are tough, hard-wearing, and have long term durability. They can stand up to active workspaces and heavy foot traffic.
5. A Good investment: Choosing hard wood floors increases the value of your property. It is a great long-term investment and can actually become a strong resale argument, exceeding the initial installation cost of the floors. It also enables a faster sale and brings higher prices at the time of resale.

Hardwood floors has an ageless beauty and quality. When other floors will begin to look tired and worn, your hard wood floors will still look beautiful. And your hard wood floors become more valuable as time goes by. Also keep in mind that unlike carpeting and vinyl, hard wood floors can be refinished rather than replaced when the finish has worn out.

Hardwood Floors Species: The Luxury of Choice in Flooring
With hardwood floors there are different species. That is the luxury of hardwood. Presently there is a range of choices for you to consider. One such choice is that of species. Some species are very hard, and stand to be a notably durable choice. Others are less hard, but more. Some species of hardwood have colors which remain more or less constant. Others exhibit “photosensitivity”, which means that the color of the hardwood flooring species changes as it is exposed to light. Whatever your requirement, hardwood flooring presents an option in floors that enable you to choose the perfect look, texture, and general effect.

Along with the advantages of appearance, hardwood is and continues to be a choice in flooring that can add structural strength and natural beauty to your home.

Buyers definitely like hardwood floors but it also depends on your location. Hardwood floors do draw your eye and adds a finished appeal to you home. But does this add value to your home.

To find the value of your home of your home you can visit my website, I would be happy to send you a Free Comparative Market Analysis.

You can follow me on Facebook or LinkedIn to read more of my blogs with information about the local market and many other subject.

If you are thinking of selling or purchasing a new home you can contact me at 608.469.5555.

Considering Buying a Home? Here Are The Reasons To Buy Now!

Many people are thinking, “Its winter, I will wait until spring to buy a new home.” According to the experts now is the time to buy and here are questions to consider and information you should know to take the next step in a home purchase.

1. Will  Home Prices Continue to Rise?
The very low home prices have come and gone. Home values are predicted to continue to appreciate for years. If you are waiting, it no longer makes sense. The Home Price Expectation Survey polls is a distinguished panel of economists and investment strategists. The most recent report projects appreciation in home values over the next five years to be between 15.1% and 32.8%.

2. Will Mortgage Interest Rates Increase?
Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of 2015. An increase in rates will obviously impact your monthly mortgage payment.

3. You are Paying a Mortgage or Monthly Rent
As a recent paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life
There are two components to the cost of a home. They are: the price of the home and the current mortgage rate. It appears that both may be on the rise.

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.
If the right thing for you and your family is to purchase or sell your current home this year, buying or selling sooner rather than later could lead to substantial savings.

Contact Mardi Stroud, Madison’s real estate expert, for more information at 608.469.5555.

Or, connect with me on Facebook and LinkedIn too!

Upgrading To a Luxury Kitchen

Everyone knows the home’s heart is its kitchen. Luxury homes have advanced past the kitchen be simply functional. The home’s central room needs to be an upscale showcase, combining functionality with high-end tastes.

Designing or upgrading your kitchen you can never go wrong. Here you will find a few ideas to help you get started.

Countertops need to be high-end
The tops of the island and the counters are the focal point of your kitchen, make sure they stand out.  Granite has become the most requested countertop material, but be sure to check the rating on it first. Instead of the typical polished granite, perhaps look into more rare granite countertops with honed, brushed, or suede finishes. There are options beyond granite, as well. Growing in popularity is the highly durable quartz. Not as durable, but lovely to look at are marble countertops. For those looking for unique designs, there are various other counters made up from natural stones or even from sealed woods, created to closely match the kitchen cabinetry.
Custom Cabinetry
When designing your kitchen remember the most expensive and time consuming portion of the new kitchen tends to be its cabinetry. For high-end homes, custom-made cabinets are the way to go, designing them to the exact dimensions of your new kitchen, and enabling the kitchen designer to make best use of every inch of wall space around the built-in appliances. Be sure to add toe kicks to the base of the upper cabinets and valances to the tops of the upper cabinets to help conceal under/over cabinet lighting.

Other considerations include creating coffee stations, “bread box” or “garage door” cabinetry to hide countertop appliances when not in use, Lazy Susans in corners, easy-glide pull-out drawers, self-closing drawers, full-extension drawers and a retractable trash can, wine racks, glass doors, and cabinet covers for built-in dishwashers and refrigerators.

Double Wall Ovens
For those still using a single oven that is part of a standalone stovetop range unit. It’s time to upgrade to a double wall oven. The upper and lower ovens can be used independently of each other, with different meals being prepared at different temperatures. For those households that need to, one oven could be designated as the gluten-free oven. If your kitchen is big enough, you may even want to consider room for four wall ovens, with one of them being a microwave and another being a steam/convection oven. When shopping, be sure to look for the newest models of ovens, which will feature systems that can prepare food up to 15 times faster, as well as ovens that can be operated by smart phone apps or over the Internet. Google’s Android, the same operating system used to power more than half of all U.S. smart phones, also now makes an operating system for smart ovens.
Flooring
While tile floors are the norm, wood flooring in the kitchen has made a huge comeback. For those looking for eco-friendly alternatives to standard wood flooring, bamboo flooring is growing in popularity. Bamboo offers a wider range of coloring from white to charcoal, as well as light-dark mixes. However, for homes where the kitchen will get heavy traffic from dogs’ claws, high heels, work boots, or shoes with sand from the beach on them, you may want to consider more durable flooring. Stone flooring, using such materials as granite or quartzite makes for lovely and tough alternatives to tile or wood.
Pot Fillers and Bar Sinks
Why walk across the kitchen with a pot of water, when there is wall spigot close by your stovetop for filling up these pots? The device is mounted high enough on the backsplash near the stove to easily fit a large pot under the faucet, allowing it to quickly be filled by cold or room temp water. A bar sink in the island or butler’s pantry gives the chef a secondary, smaller sink location to prep for dinner and wash vegetables. (Note: As both of these handy faucets require extensive plumbing, these should be selected in advance of starting work on the kitchen.)
Television
Add a television to your eating or food prep area. The flat screen televisions can be recessed into walls to keep with the smooth sightlines of the rest of your new kitchen.
Whether you’re thinking about remodeling your home in the New Year, or are considering purchasing a new luxury home, contact Mardi Stroud – Madison’s real estate expert — at 608.469.5555.

New Property Tax Update from Mayor’s Office

We have received the following announcement from the Mayor’s Office:

City to Offer Property Owners Four Installments for Tax Payments: More Options for Easier Budgeting

Madison property owners will soon have the option of paying their taxes over four installments. By offering taxpayers more than the typical two installments, beginning in December, Madison joins most of the larger communities in the state, such as Kenosha, Racine, La Crosse, and most of Milwaukee County’s municipalities.

Studies have shown that municipalities that collect property taxes over multiple installments see a significantly lower rate of delinquency than the two installment method.

The three most important things to remember about the new system are:

• There will be no effect for the majority of property owners who pay all of their taxes in December, so that they can itemize the deduction on their Federal income tax;
• The four due dates will be: January 31st, March 31st, May 31st, and July 31st. Taxpayers can pay whatever they like at any time as long as they meet the accumulated minimums by those due dates;
• All payments on current taxes will be made to the City Treasurer; no longer will taxpayers pay the city for one installment and the county for the other.

“At the height of the recession the city’s delinquency rate was over twice the historical average,” said Mayor Paul Soglin. “Even today, delinquencies are 30% more than what we would expect. We hope offering the four installment option will help some of our property owners avoid the considerable penalties incurred when you go delinquent on their taxes.”

Depending on the specific bill, it is generally not a matter of taking your total taxes and dividing by four. Special charges, credits, and other factors will determine the exact amount of each installment. To help explain all of these variations, the City Treasurer’s website: www.cityofmadison.com/Treasurer has more information for taxpayers to give them a better understanding of how four installments would work for them. Property owners can expect their tax bill the first week of December.

Fear of Low Down Payments Mostly Unwarranted

After it was announced that Fannie Mae and Freddie Mac would again make available mortgage loans requiring as little as a 3% down payment, many people showed concern. Were we going back to the lower qualifying standards of a decade ago that caused the housing market crash? Won¹t lower down payments dramatically increase the default rates? Will we again be faced with an avalanche of short sales and foreclosures? The simple answer is – NO. Let’s look at the data.

While it was happening (2011)

Back in 2011, as we were just recovering from the worst of the Great Recession, many organizations were looking for the cause of the massive default rate on mortgages. The National Association of Realtors (NAR), the Center for Responsible Lending (CRL), the Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), the Community Banking Mortgage Project and the Mortgage Insurance Companies of America (MICA) issued a white paper on the subject titled: Proposed QRM Harms Creditworthy Borrowers and Housing Recovery. Let’s look what the report says:

“In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time homebuyers will have to choose between higher rates today or a 9-14 year delay while they save up the necessary down payments. High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates. The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.”

The report actually studied the impact a higher down payment would have had on the default rates of loans written from 2002 through 2008. The report states:

“Moving from a 5 percent to a 10 percent down payment on loans that already meet strong underwriting and product standards reduces the default experience by an average of only two- or three-tenths of one percent… Increasing the minimum down payment even further to 20 percent (creates) small improvement in default performance of about eight-tenths of one percent on average.”

Today (2014)

Just last week, the Urban Institute revealed data showing what impact substantially lower down payments would have on default rates in today¹s mortgage environment. Their study revealed:

“Of loans that originated in 2011 with a down payment between 3-5 percent, only 0.4 percent of borrowers have defaulted. For loans with slightly larger down payments, between 5-10 percent, the default rate was exactly the same. The story is similar for loans made in 2012, with 0.2 percent in the 3-5 percent down-payment group defaulting, versus 0.1 percent of loans in the 5-10 percent down-payment group.”

Bottom Line

We believe that the Institute concluded their report perfectly:

“Those who have criticized low-down payment lending as excessively risky should know that if the past is a guide, only a narrow group of borrowers will receive these loans, and the overall impact on default rates is likely to be negligible. This low down payment lending was never more than 3.5 percent of the Fannie Mae book of business, and in recent years, had been even less. If executed carefully, this constitutes a small step forward in opening the credit box, one that safely, but only incrementally, expands the pool of who can qualify for a mortgage.”

Information provided by KCM

Debunking 4 Myths about Buying a Home

A recent study by the Joint Center for Housing Studies at Harvard University revealed when renters were asked why they do no plan to own in the future, financial constraints were a more common response than the perceived lifestyle benefits they may receive from renting. Today, we want to go over those financial challenges and see if we can put some fears to rest and also clear up some misconceptions. Here are the top four financial hurdles that cause renters not to buy:

You Cannot Afford a Home

Well over 50% of renters consider this as a financial barrier to homeownership. However, study after study has shown us that there are major misunderstandings about what is required to purchase a home. The biggest misconception is the amount of a down payment required. A recent survey revealed that 44% of respondents believed that a 20% down payment was required. In actuality, mortgages are available with as little as 5% down (and even 3% in certain situations). The same survey showed that 30% of respondents believe that only individuals with high incomes¹ can obtain a mortgage. In actuality, there are several programs intentionally created to help moderate income families buy a home of their own (look at the FHA program for example).

You Do Not Have Good Enough Credit to Get a Mortgage

The survey mentioned above showed that 64% of respondents believe they must have a very good² credit score to buy a home. Most people don’t realize that the average credit score for closed loans has actually dropped 24 points in the last two years. For more information on credit scores, click here.

It’s Not a Good Time to Buy a Home

Determining when is the right time to buy a home from a pure financial calculation can be difficult. There are two elements of the cost of a home: the price of the house and the mortgage interest rate. When considering a purchase, you want to have at least an indication where prices and mortgage rates are headed. According to over 100 experts, house values are expected to increase by almost 20% between now and 2018. And Freddie Mac recently projected that mortgage rates would be as much as one full point higher by this time next year. With both prices and interest rates projected to increase, now is the perfect time to buy a home.

It’s Cheaper to Rent than Buy

This is a myth that doesn’t want to die. However, Trulia recently reported that, in fact, buying is actually dramatically cheaper than renting. Here is what they said:

“Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. In fact, buying is 38% cheaper than renting now, compared with 35% cheaper than renting one year ago.”

Bottom Line

If you are even thinking about buying, get the facts from a trained professional. You may be pleasantly surprised by what you find out.

Source:

The KCM Crew. (Nov. 5, 2014). Debunking 4 myths about buying a home. Retrieved from http://www.keepingcurrentmatters.com/2014/11/05/debunking-4-myths-about-buying-a-home/