Real Estate Math

Real Estate Math

Of the various maths involved in residential real estate, calculating the value of home improvement projects is the most difficult. Return on investment is ultimately determined by the market. There are no definitive answers, unlike there are in the problem above.

A quick quiz: Which of these projects tends to provide the best return on investment for sellers?
   A. Back Yard Patio Installation
   B. Garage Door Replacement
   C. Minor Kitchen Remodel
   D. Window Replacement

Buyers are very much into move-in ready homes right now. They want what they see on TV, which is often updated, neutral, and sparse.

In most cases it does not make sense for a seller to do updates in order to list a home for sale. However, pretty much any seller can make progress towards making their home neutral and sparse.

We’re happy to help you decide how far to go as you prepare for the market, and to recommend contractors if you need help completing the work.

Our goal is to suggest projects that will either make you more money on the sale, or help the property sell more quickly, or both.

By the way, the Remodeling’s 2019 Cost vs Value Report says that answer B is the best response … replacing garage doors tends to provide sellers in the Hartford area the highest return on investment. Check out their website for the return on investment numbers for all 21 projects included in their report.

Alert: Extreme Cold Ahead

Real Estate Alert 2019-01-19

The precipitation is getting all the headlines, but the extreme cold predicted to follow is just as concerning.

Take a couple minutes today to make sure your house is ready for extended single-digit temperatures. Check your heating oil level, drain the exterior spigots, and bring in some firewood if you regularly burn fires. If you have drafty windows or doors, then consider buying insulating strips to temporarily plug the cracks.

Stay warm, and make sure your house stays warm too. Frozen pipes are bad news.

A Well Maintained Building

39 Woodland - 5200 - 1920

The well maintained building at 39 Woodland Street in Hartford is identified by the Structures and Styles book as the Melancthon W. Jacobus, Sr. House. Its Tudor Revival architecture is in excellent condition 110 years after construction!

Kudos to the State for the recent maintenance to keep the 29,571 square foot structure looking good. The building is currently the central office for the Connecticut Technical Education and Career Center.

Repairing Crumbling Foundations

CT Department of Housing
Photo: CT Department of Housing

Property owners in a portion of Connecticut have been struggling with foundation problems. The concrete mix used to build their homes included pyrrhotite, which is a mineral that causes foundations to deteriorate due to exposure to air and water.

There is no way to repair a defective foundation. The only way to save a home with pyrrhotite is to replace the foundation, a very expensive project.

Home insurers didn’t think replacing the foundation was their responsibility since nothing new had happened to the house. Buyers avoided homes where there was any suspicion of foundation problems. Homeowners with the issue were basically stuck. They had to deal with it on their own.

The State Legislature stepped in during the 2018 session to create a non-profit organization called the Connecticut Foundation Solutions Indemnity Company, Inc. (CFSIC). The CFSIC will begin working with property owners in January 2019 to process crumbling foundation claims, and pay for replacement.

CFSIC is primarily funded by the State of Connecticut, which will issue $20 million in bonds per year for five years to seed the program. A second source of funding, a $12 surcharge on homeowners’ insurance policies, was also authorized by the Legislature. The surcharge is expected to contribute $8.5 million per year.

Additional assistance may also be available to impacted property owners. For example, Travelers recently announced that they could contribute $5 million to enhance the CFSIC benefit for their current and former policyholders. Not sure if other insurers will step up, but it’s great that one of our local companies has.

The crumbling foundation problem can be financially devastating to homeowners. We’re glad that there is a process in place to address the issue, and hope that the application process proceeds smoothly for those who are impacted.

Close the Door

“Close the door” is a time-tested piece of advice.

Growing up in Vermont, the main reason to close the door was to keep the heat from getting out. Apparently barns are notorious for having open doors where I’m from. Being told to close the door was generally followed by a comment about how we don’t live in a barn. Which was true, we didn’t live in a barn.

There’s a strong case to be made in more densely populated areas that it is important to close the door so that strangers don’t come into your place. Not as much of a concern in Vermont, but here in Hartford there are enough curious folks walking around that I could imagine one investigating a door left open with nobody in sight. Maybe not the first time the door was left open, or even most times, but it seems plausible.

I recently learned of a new reason to close the door. It would seem that the door of this building is a primary defense against local wildlife.

Close the Door

After touring the property, it seemed clear that the home’s defenses had failed. Either the door was left open, against the clear instruction provided by the sign, or the fauna found a different way inside. I heard lots of scratching in the basement ceiling.