As 2021 begins, the housing market presents many opportunities for smart investors. Today, we’ll look at the overall market – and how to maximize curb appeal so you get the most out of your property.
What will drive housing in the year ahead? A hot market and low mortgage availability are squeezing buyers who need affordable homes.
Hot housing market means buyers can’t afford to buy
Despite low mortgage rates, homes are less affordable today than any time since 2008, says Attom Data Solutions. To buy a house today, an average buyer must spend about 30% of average wages. That puts many buyers on the sidelines.
Looking ahead, housing is getting more and more out of reach for buyers, because:
- Home prices are rising fast, up 7.9% in the year ended October 2020, says the S&P CoreLogic Case-Shiller 20-city home price index.
- The average existing home is only on the market for 25 days, says Zillow.
- It’s tough to get a conventional mortgage, says the Mortgage Bankers Association.
That’s why many homebuyers will be forced to turn to alternative financing from private lenders in 2021.
Build curb appeal to boost returns
To boost returns on real estate, make sure your property makes a great first impression. Maximizing curb appeal can increase home values by 5% to 11%, says a study by Michigan State University.
To increase “curb appeal,” focus on improvements that look good from the street view:
- Scrub, paint, refinish or replace the front door.
- Update or spray-paint existing door hardware.
- Paint the door trim and molding.
- Replace the welcome mat.
- Upgrade or add new porch lights.
- Pressure-wash the front porch. Tile or stain it. Paint the steps.
- Dress up the mailbox. Upgrade the numbers that identify the home’s address so they’re easy to see from a car.
- Add plants to the porch. Freshen the landscaping in the front yard. Kill weeds growing up through the pavement. Install shrubs and flower beds.
- Stain, paint or replace the garage door.
- Camouflage unsightly concrete foundations with ready-made panels.
- Hide air conditioners or generators behind a lattice fence.
- Paint ugly electrical, telecom and cable boxes to match the paint on the house, so they blend in instead of sticking out like a sore thumb.
- To dress up windows, add faux shutters and window boxes.
Here in the Nashville area, 8 of the top 10 renovation jobs that drive higher resale values are visible to buyers before they get out of the car. These renovations include replacing garage doors, siding, windows, entry doors and roofing.
According to Remodeling, the best paybacks on renovations in the Nashville area during 2020 came from replacing garage doors and siding.
Rebuilding homes, building communities
Alvernia works with busy professionals who invest to provide affordable housing in the greater Nashville metro area. We focus on affordable housing because it holds its value better than other types of properties.
We acquire and renovate existing houses, and build new units. As buyers seek homes with bigger yards away from city centers, we are exploring nearby markets such as Clarksville, Tenn.
We work active and passive investors. Our free assessment helps you determine which investing approach fits you better.
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