State Median Home Price Increases 10.2%, Remodeling Trends – February 3, 2011

There’s something in the air. Have you noticed it? Downtown is busier, restaurants are crowded and retail sales are up. The same is true in the real estate market. Pending home sales improved in December, marking the fifth gain in the past six months. New home sales are up 17.5 % nationwide according to the Department of Housing and Urban Development.

Lawrence Yun, Chief Economist for the National Association of Realtors® (NAR), credits this upswing to affordability, favorable mortgage rates and an improving economy. Yun predicts, “The positive trend is likely to continue in 2011. Current activity suggests a sustainable, healthy volume of a mid-5 million in total home sales for this year.”

The California Association of Realtors® reports that sales in December posted a seven-month sales high. Closed escrow sales of existing single-family homes in California totaled a seasonally adjusted annualized rate of 520,680. The statewide median price increased 10.2 percent to reach $302,900 for the year.

Our local market is reflecting this upswing. Builders are starting to build in preparation for sales at higher prices in the year to come. Inflation is a concern that drives some to buy now. By the end of February, more homes will come on the market. The spring season of March, April and May are traditionally very active. Now may be the time to evaluate your options and capitalize on the spring market.

 

JUST ASK

Q: What are the new trends in remodeling?

A: Since December, there has been an upswing in remodeling nationwide according to the National Association of the Remodeling Industry (NARI). The cost of a remodel is running about 10 to 15% less than two years ago. In general, NARI reports that the project size is smaller.

Instead of expanding your home, consider borrowing space from oversized rooms. Instead of building a wine room, install a wine storage appliance. Instead of creating a separate home theater in the basement, avoid the cost of expensive electronics and make a multipurpose room. I wonder whether the phase of bigger homes, bigger basements and bigger toys is ending or just slowing. Many clients say that they do not use those extra rooms. Let me know what you think.

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