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Think Home Prices Are High Now? Why They’re Likely to Keep Going Up

 | May 15, 2017

Buyers might want to sit down for this: Homes flew off the market like the hottest of hotcakes in the first quarter of the year—causing prices to rise even higher than predicted in many parts of the nation.

The median price of existing single-family homes hit $232,100 in the first quarter of the year, according to a recent quarterly report from the National Association of Realtors®. That’s up 6.9% from a year ago—and is nearly double the 3.9% price growth realtor.com® had forecast for 2017.

The NAR report looked at 178 markets across the nation.There were 1.83 million existing homes for sale in the first three months of the year—down 6.6% from the first quarter of 2016.

“Prices are increasing faster than we expected them to because of the continual shortage of new homes coming onto the market,” says Senior Economist Joseph Kirchner of realtor.com. “People that had been holding back on buying a home … now have good, steady jobs and are less worried about losing their jobs and hence are going into the housing market.”

If the shortage of homes continues, prices could rise 7% to 8% year over year in 2017, he says. Ouch.

That means buyers on a budget “will be able to afford one less bedroom [or need to] accept a house with a longer commute,” Kirchner says.

The first quarter of the year marked the strongest quarterly sales pace in a decade, according to the report.

“Prospective buyers poured into the market,” NAR’s Chief Economist Lawrence Yun said in a statement. “Those able to successfully buy most likely had to outbid others—especially for those in the starter-home market.”

Prices went up in 85% of those metros, which are highly populated areas made up of one or more city cores surrounded by suburban and rural communities. That’s down slightly from 89% in the previous quarter, but 30 metros did see double-digit price hikes in the first three months of 2017.

“Several metro areas with the healthiest job gains in recent years continue to see a large upswing in buyer demand but lack the commensurate ramp up in new home construction,” Yun said. “This is why many of these areas— in particular several parts of the South and West—are seeing unhealthy price appreciation that far exceeds incomes.”

Four of the five most expensive markets were in California. Silicon Valley’s San Jose took the lead, as the median existing single-family home came with a $1,070,000 price tag. The metro was followed by San Francisco, at $815,000; Anaheim, CA, at $750,000; Honolulu, at $746,000; and San Diego, at $564,000.

Overall, the West was also the most expensive housing region. The median price for an existing single-family home was $342,500 in the first quarter of the year. That’s up 8.4% year over year.

Homes weren’t cheap in the Northeast either, at a median $255,000. They were up 2.2% annually.

Prices in the South rose 8.8% year over year, to hit $209,000.

The most affordable region was the Midwest, where buyers could snag a property for a median $176,600. But prices were 5.7% higher annually.

“You can get a much nicer home here than in many places in the country” for quite a bit less, says Lincoln, NE–based Realtor® Ron Herms, of Sellstate Performance Realty. “A lot of other states in the Midwest are going to be similar. … [And] the quality of life in the Midwest is very good.”

The cheapest metros were Youngstown, OH, at $79,200; Cumberland, MD, at $81,800; Decatur, IL, at $86,100; Elmira, NY, at $90,000; and Binghamton, NY, at $91,200.

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These 8 Emerging Design Trends Will Be All the Rage in 2017

 2017

With the start of 2017, we’ve said farewell to some tired interior decor trends that have worn out their welcome. Once considered innovative and edgy, those bad boys are now giving us the blahs.

But, when one trend goes out, another must come in. It’s the design circle of life!

So what’s replacing the old fads with fun, new ideas? Your friends will fawn over these eight trends—from “jungalows” to jewel tones—that promise to hit it big in 2017. Want to be a showoff (the good kind)? Be the first to integrate them into your home.

1. Geometric patterns

Say goodbye to soft, gentle curves—funky geometric patterns will rule the roost in 2017. Embrace your memories of high school math with geometric throw pillowswallpaper, and quirky planters.

“Large, mod geometric designs made an appearance in 2016 and will be a front-runner in 2017,” says Jeffrey Weldler, marketing director with VÄNT Wall Panels.

Scared this fun new style will feel out of place in your old-school home? Don’t be.

“Don’t feel like your home needs to have all modern design in order to add geometric patterns,” Weldler says. “Geometrics even have a place in an industrial farmhouse–style home.”

2. Jewel tones

Traditional Family Room
Traditional Family Room

Photo credit: Houzz
Last year welcomed the bold return of art deco–inspired designs, and with them come luxurious jewel tones. Indulge your regal side with rich emerald chairs, bold sapphire walls, and amethyst accents.

“These colors offer depth and a richness that will make a space feel cozy, yet luxurious,” says designer Liz Toombs.

Pair the designs with neutral, minimal wall colors for a toned-down take on the trend, or go wild and slather your entire living space in vivid color.

3. Cork

Bedroom
Photo by The Neighborhoods of EYA

It’s 2017. Isn’t it time to fully embrace our eco-friendly side? Cork walls are “not only trendy, but also functional,” says Than Merrill, a real estate investor with FortuneBuilders.

Swap out your old chalkboard wall for cork, and pick up some fun pushpins (try fabricflowers, or even teeny rabbits). Keep track of to-do lists, notes, reminders, and your favorite recipes on your cork board (aka the original Pinterest).

Not sure where to put a cork in it? Merrill recommends “livening up dead space” in a home office or kitchen.

4. Tropical influences

Kohler
Photo by Kohler
It’s the year of the “jungalow.” Your new, jewel-toned walls will look fabulous alongside lush tropical plants: spider plants, Dracaena, and gorgeous ferns.

Cursed with the blackest of thumbs? You can still embrace the tropical trend, which “mixes printed and embellished textiles ranging from novelty fruits to animal print to palm fronds,” says textile designer Caroline Cecil. Add accents in bright yellows, deep greens, and earthy oranges and reds to bring this creative look home.

5. Rich blues

Somfy
Photo by Somfy Systems

Pantone’s Color of the Year might be an interesting yellow-green, but its spring trend forecast is “all about the blues,” says Weldler. Dressing your home in shades of sky—from sapphire (another one of those glorious jewel tones) to teals and soft baby blues—has never been so fashionable.

Whether you want to express confidence and strength or calm down after a long day at work, there’s a blue tone perfect for your space. And when those tones are mixed together, it’s the ultimate in relaxation.

6. Wood accents

Bathroom Driftwood Clock
Photo by Agnes Blum
We’re moving away from metal and back to an earthier feel. Wood accents will be everywhere in 2017, says Erika Dalager of home design startup roOomy.

No, we’re not talking about wood paneling (although that’s sneaking its way back, too). Look for modern wood clockssculpturestrays, and furniture that pair perfectly with today’s streamlined aesthetic. And yes, a lot of that wood will be reclaimed—so we can keep our wonderful forests.

7. Black stainless steel

Samsung Black Stainless Steel Appliances
Photo by Appliances Connection
Remodeling your kitchen in 2017? Now’s your chance to get ahead of a trend. Stainless-steel appliances have ruled the kitchen for years now. And why not? They’re sleek, easy to clean, and pretty. But it’s time for a change.

Black stainless steel is sleek, modern, and sophisticated,” says Weldler. And even better: It’s not in all of your friends’ kitchens. “Brushed stainless steel had its time, and now people are looking for a subtle change.”

8. Bold front doors

Kirkland Residence
Photo by Allied8 (formerly Verge AD)

Say adios to plain old black. Get rid of that sad, boring straight-from-the-store wood. If you’re eager to try something bold in 2017, try painting your front door.

“Next year, homeowners should focus on transforming their front door into one that pops,” Merrill says. Try one of those bold blues, or maybe a bright red. Or figure out what you want your door to say about you, and pick a color accordingly.

“An entryway is the perfect place for a homeowner to express him or herself and show off his or her unique personal style,” Merrill says. “If the interior of your home screams ‘cozy beach cottage,’ find a front door that matches the atmosphere.”

And if you hate it? Don’t worry: You can always paint again.

Ready to be a 2017 home trend setter? Let us know on House Talk.

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7 Smart Strategies for Kitchen Remodeling

Tips For Kitchen Remodeling Kitchen Remodeling StrategyImage: KraftMaid/Masco Retail Cabinet Group

Follow these seven strategies to get the most financial gain on your kitchen remodel.

Homeowners spend more money on kitchen remodeling than on any other home improvement project. And with good reason: Kitchens are the hub of home life and a source of pride.

A significant portion of kitchen remodeling costs may be recovered by the value the project brings to your home. A complete kitchen renovation with a national median cost of $60,000 recovers about 67% of the initial project cost at the home’s resale, according to the “2015 Remodeling Impact Report” from the NATIONAL ASSOCIATION OF REALTORS®.

The project gets a big thumbs-up from homeowners, too. Those polled in the “Report” gave their new kitchen a Joy Score of 9.8 — a rating based on those who said they were happy or satisfied with their remodeling, with 10 being the highest rating and 1 the lowest.

To maximize your return on investment, follow these seven strategies to keep you on budget and help you make smart choices.

1. Plan, Plan, Plan

Planning your kitchen remodel should take more time than the actual construction. If you plan well, the amount of time you’re inconvenienced by construction mayhem will be minimized. Plus, you’re more likely to stay on budget.

How much time should you spend planning? The National Kitchen and Bath Association recommends at least six months. That way, you won’t be tempted to change your mind during construction and create change orders, which will inflate construction costs and hurt your return on investment.

Some tips on planning:

Study your existing kitchen: How wide is the doorway into your kitchen? It’s a common mistake many homeowners make: Buying the extra-large fridge only to find they can’t get it in the doorway. To avoid mistakes like this, create a drawing of your kitchen with measurements for doorways, walkways, counters, etc. And don’t forget height, too.

Think about traffic patterns: Work aisles should be a minimum of 42 inches wide and at least 48 inches wide for households with multiple cooks.

Design with ergonomics in mind: Drawers or pull-out shelves in base cabinets; counter heights that can adjust up or down; a wall oven instead of a range: These are all features that make a kitchen accessible to everyone — and a pleasure to work in.

Plan for the unforeseeable: Even if you’ve planned down to the number of nails you’ll need in your remodel, expect the unexpected. Build in a little leeway for completing the remodel. Want it done by Thanksgiving? Then plan to be done before Halloween.

Choose all your fixtures and materials before starting: Contractors will be able to make more accurate bids, and you’ll lessen the risk of delays because of back orders.

Don’t be afraid to seek help: A professional designer can simplify your kitchen remodel. Pros help make style decisions, foresee potential problems, and schedule contractors. Expect fees around $50 to $150 per hour, or 5% to 15% of the total cost of the project.

2. Keep the Same Footprint

Nothing will drive up the cost of a remodel faster than changing the location of plumbing pipes and electrical outlets, and knocking down walls. This is usually where unforeseen problems occur.

So if possible, keep appliances, water fixtures, and walls in the same location. Not only will you save on demolition and reconstruction costs, you’ll cut the amount of dust and debris your project generates.

3. Get Real About Appliances

It’s easy to get carried away when planning your new kitchen. A six-burner commercial-grade range and luxury-brand refrigerator may make eye-catching centerpieces, but they may not fit your cooking needs or lifestyle.

Appliances are essentially tools used to cook and store food. Your kitchen remodel shouldn’t be about the tools, but the design and functionality of the entire kitchen.

So unless you’re an exceptional cook who cooks a lot, concentrate your dollars on long-term features that add value, such as cabinets and flooring.

Then choose appliances made by trusted brands that have high marks in online reviews and Consumer Reports.

4. Don’t Underestimate the Power of Lighting

Lighting can make a world of difference in a kitchen. It can make it look larger and brighter. And it will help you work safely and efficiently. You should have two different types of lighting in your kitchen:

Task Lighting: Under-cabinet lighting should be on your must-do list, since cabinets create such dark work areas. And since you’re remodeling, there won’t be a better time to hard-wire your lights. (Here’s more about under-cabinet lights.) Plan for at least two fixtures per task area to eliminate shadows. Pendant lights are good for islands and other counters without low cabinets. Recessed lights and track lights work well over sinks and general prep areas with no cabinets overhead.

Ambient lighting: Flush-mounted ceiling fixtures, wall sconces, and track lights create overall lighting in your kitchen. Include dimmer switches to control intensity and mood.

Related: How to Choose the Best Bulb for the Job

5. Be Quality-Conscious

Functionality and durability should be top priorities during kitchen remodeling. Resist low-quality bargains, and choose products that combine low maintenance with long warranty periods. Solid-surface countertops, for instance, may cost a little more, but with the proper care, they’ll look great for a long time.

And if you’re planning on moving soon, products with substantial warranties are a selling advantage.

Related:

6. Add Storage, Not Space

Storage will never go out of style, but if you’re sticking with the same footprint, here are a couple of ideas to add more:

Install cabinets that reach the ceiling: They may cost more — and you might need a stepladder — but you’ll gain valuable storage space for Christmas platters and other once-a-year items. In addition, you won’t have to dust cabinet tops.

Hang it up: Mount small shelving units on unused wall areas and inside cabinet doors; hang stock pots and large skillets on a ceiling-mounted rack; and add hooks to the backs of closet doors for aprons, brooms, and mops.

Related: Storage Options that Pack More Space in Your Kitchen

7. Communicate Clearly With Your Remodelers

Establishing a good rapport with your project manager or construction team is essential for staying on budget. To keep the sweetness in your project:

Drop by the project during work hours: Your presence broadcasts your commitment to quality.

Establish a communication routine: Hang a message board on site where you and the project manager can leave daily communiqués. Give your email address and cell phone number to subs and team leaders.

Set house rules: Be clear about smoking, boom box noise levels, available bathrooms, and appropriate parking.

Be kind: Offer refreshments (a little hospitality can go a long way), give praise when warranted, and resist pestering them with conversation, jokes, and questions when they are working. They’ll work better when refreshed and allowed to concentrate on work.

Blue tea kettle in a kitchen

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