Investing In Real Estate: Aesthetics Count

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California real estate remains hot property, despite a slight slowdown in other parts of the country. Typically, a home in California with a price tag of $1 million (in areas like Santa Clara), may receive as many as one dozen or two dozen offers. Silicon Valley is largely responsible for the booming real estate market in cities across California. San Jose has a median home price of well over $1.18 million, and during Q2 2017, prices spiked by 6.2%. Consider that the average cost of a house in the United States was $258,300 (Q2 2016). Across metropolitan areas of the US, property prices have enjoyed strong appreciation, fuelled in large part by lower inventory levels.


In fact, the lack of supply has helped to keep property prices elevated in the US. Many people do not believe that another property price bubble is on the cards, given that the mortgage industry has been cleaned up and banks are now subject to stringent capital requirements across the board. Federal regulators have ensured that banks can pass the stress tests imposed upon them, if the economy should unexpectedly reverse. The financial turmoil that characterized the subprime mortgages markets has been cleaned up. Property prices have appreciated in recent years since the crisis, but they have not ballooned out of control. Markets are certainly bullish, but not to the extent where they are raising eyebrows and scaring buyers away.

Property Owners Are Ploughing Resources into Their Homes

Across the United States, property owners are finding ways of improving their home values by performing a myriad of activities. Various home improvement tips have been suggested by experts, including routine maintenance work, landscaping, plumbing, roofing, budget-friendly tips for DIY work, and remodelling, etc. Home-improvement can add substantial value to a property, by making it more appealing, ergonomic, and attractive to buyers. By improving their surroundings, homeowners can upgrade their property’s value, and live in a milieu that is tailored to their preferences.
There are multiple changes that homeowners and renters can employ to spruce up their properties, and many of them are cost-effective. These include things like cleaning out the gutters, sprucing up the baseboards, washing down the windows, doing yardwork, etc. Certain fixes have far-reaching cost savings implication such as ensuring that the seals on windows shut correctly (to save on AC and heating costs), that no faucets are leaking, switching out conventional light bulbs for energy efficient light bulbs etc.

Recent Trends in US Housing Market

The July figures for US housing starts amounted to 1.155 million, substantially less than the 1.22 million that was forecast by analysts. The construction of both single-family homes and multi-family homes dropped unexpectedly in July, amid expectations of a rebound in the housing market. According to the Commerce Department, the seasonally adjusted annual rate for housing starts dropped to 1.16 million, down 4.8%. This new data points to a slowdown in the US housing market, due to several factors.

Foremost among them, is the lack of buildable lots, the inadequacy of skilled labour, and a tightening in credit markets. Despite the pullback, an August survey revealed some interesting trends: Homebuilders’ confidence increased as demand for new houses increased. Apartments have appeared on the scene, leading to a slowdown of home building of multifamily homes. In July, building permits declined by 4.1% to 1.22 million units, while demand for single-family home permits was unchanged.

While July figures were somewhat lackluster, the Commerce Department expects a rebound in August. The total number of building permits issued in July amounted to 1,223,000, while there were 1,155,000 housing starts, and 1,175,000 housing completions. Year on year, the figures for July are down 4.1%, but this has not affected the investments in existing properties where the home renovations market is enjoying bumper activity.

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