John Murphy Reports

June Fletcher published an excellent piece in Saturday’s real estate section of the Star Tribune.  Entitled, “The Eleventh Hour Upgrade,” she explores the last minute remodeling and upgrading that many sellers go through prior to listing their home.

Overall home remodeling is down, but apparently many remodelers say they are picking up quite a bit of business from sellers who want to improve their home before it hits the market.

No matter what the upgrade, homeowners aren’t likely to recoup all the money spent when they sell. According to Remodeling magazine’s annual Cost Versus Value Survey, the overall return for remodeling projects is on the decline, falling to an average of 70 percent in 2007 from 86.7 percent at the market peak in 2005.

(Note, see this previous post on the latest 2007 Cost vs. Value Survey).

Despite the fact that the returns aren’t as high for remodeling projects these days, it is not unrealistic to think that many sellers today will have to spend significant sums to make some last minute improvements to their home prior to getting it listed.  A rule of thumb I use is shown below in this crude table:

Home Value                      Home Improvement Costs

$250,000 – $350,000:       $2,000 – $3,000

$350,000 – $600,000:       $3,000 – $8,000

$600,000 – $1,000,000:    $5,000 – $15,000

The trend for the bulk of today’s buyers is that they do not want to do much when they buy your home.  Generally speaking they aren’t interested in “building equity” like we used to talk about several years ago.  Today buyers want to “build equity” by buying a perfect or near perfect home at 5-20% under market value…that’s how they will build their equity.

Here’s the latest weekly report from the Minneapolis Area Association of Realtors.

Listings: +12.1% over the same period as last year (see page 4 of report)
Pending Sales: -17.8% over the same period as last year (see page 3 of report).

It appears we are still about in the same place we have been in the past several weeks.  There is no “turn” here in the data, but it also doesn’t show that the market is getting worse.

Welcome to this exceptional custom 5 bedroom, 5 bath home in beautiful Orono, Minnesota.  Enjoy the luxury resort-like feel this home offers with a new saltwater pool, sport court, and extensive landscaping.  This home offers outdoor living at its finest!

 Located on a beautiful 2 acre lot in a cul-de-sac, this home allows the lifestyle of living in the gorgeous country setting of Orono but with a neighborhood feel.  Custom built in 2000 by Pillar Homes, you’ll notice the superior craftsmanship and attention to detail in this nearly 4400 finished square foot home.  It has a wonderful, well thought out open floor plan. 

The main level provides many conveniences for daily family life but it is also a wonderful place for entertaining friends and family.  The gorgeous gourmet kitchen with a center island, granite countertops, tile backsplash and stainless steel Kitchen-Aid appliances along with the adjacent informal dining make this a great family gathering place. The family room is highlighted by a beautiful built-in entertainment center, stone accented fireplace and a wall of windows.

For daily family life, it is hard to beat the large main floor laundry room as well as the mud room and cubbies.  These rooms are conveniently located near the entrance to the garage. Nearby you’ll also find the incredible main floor office.  It is extra large, has a wall of custom built-ins as well as desk space, and overlooks the lovely side yard.

During the spring, summer, and fall months, you can’t help but enjoy time relaxing on the picture perfect screened porch.  The view is absolutely stunning.  Overlook the new saltwater pool, gorgeous architecturally designed landscaping and the elegant paver patio with granite steps.

Upstairs are 4 bedrooms and 3 baths including a tranquil master suite which overlooks the magnificent backyard and pool.  The master bath boasts heated tile floors, a large walk-in shower and separate whirlpool tub.  There is also an open space upstairs that works well as a computer room or a place for kids to do homework.

The lower level provides a fifth bedroom and bath as well as a large recreation room with a ceiling height of nearly 9’.  Lots of storage is available in the lower level as well.This exceptional home offers luxury with a resort-like feel allowing today’s family a retreat from the hectic pace of life.  With 5 bedrooms, 5 baths, 4386 finished square feet, a new saltwater pool and sport court on a lovely 2 acre lot in Orono, this home has it all!