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6 Alternative Flooring Solutions to Refresh Your Home
Feeling ho-hum about classic hardwood floors? Here are six alternative floor solutions that can give any room in your house a fresh sense of personality, whether you’re starting from scratch or looking for an inexpensive DIY update.
1. Rubber. Often associated with commercial interiors, industrial rubber flooring can also be a sleek and smart solution for homes. Rubber is comfortable to stand on, easy to clean and durable enough to take on plenty of mess and abuse — great for an entry, a mudroom or a laundry room. From a style perspective, it gives a room a hint of an industrial edge, but in warm muted tones that still create an inviting air.
In a kitchen, a rubber floor is a chef’s dream, as it cushions the feet while the cook is standing to reduce fatigue. Plus, the textural surface reduces slipping hazards from spills and is very child-friendly. DHV Architects, original photo on Houzz
Want a rubber floor with a less industrial vibe? Choose sheets or tiles of rubber with a flat surface dyed to various hues that draw from the tones in stone tile. You wouldn’t guess this floor is rubber by looking at it, but your feet would be able to tell.
Cost: Rubber flooring can be extremely inexpensive but, in general, quality materials start at $12 per square foot. Anything below that would probably be of a quality that wouldn’t look appropriate inside a home.
2. Bamboo. Bamboo flooring is similar to wood flooring in many ways, but it imparts a Zen flair that can add a sense of peace to a room. And it is typically more moisture-resistant and hard-wearing than wood.
It should be noted that not every bamboo product is equally environmentally conscious. For one thing, shipping products from overseas can quickly make up for any carbon-footprint cost saved during production. However, if you are looking for a durable natural floor that’s sustainably grown, bamboo is a great option to consider.
It’s also worth noting that bamboo flooring can come in quite a variety of styles. A higher-contrast grain and stain can create an exotic look, for an effect that is playful and energetic rather than soft and tranquil.
If you love the look of walnut or zebrawood, bamboo can recreate that vibe with a stronger surface, and without cutting down any rare trees.
Keep in mind that the stains and adhesives involved in bamboo flooring can off-gas with an unpleasant odor, so those who are sensitive to chemicals may want to avoid the space immediately following an installation, or look at traditional hardwoods instead.
Cost: Bamboo is generally comparable in price to hardwoods, running about $2 to $8 per square foot.
3. Parquet. Everything old is new again, and while some homeowners (and many renters) are wishing away their parquet floors, others are installing them anew. These patterned wood floors add a sense of life and richness to a home, bringing visual interest and a sense of dynamic energy that typical straight-laid planks can’t match.
Installing wood in a parquet pattern also gives a lot more character to inexpensive local woods that might not have an exciting grain. For a patient DIYer, a parquet floor gives a high-fashion look with a much lower price tag than some other choices.
To give a classic block parquet layout a modern twist, use an oversized pattern in squares 12 inches or bigger. And, yes, a warm honey or orange tinted stain is back as well, especially mixed with classic modern furnishings in deep rich tones like chocolate, ruddy tan or espresso or crisp, airy whites.
Cost: Installation fees may be a bit higher than for straight-laid flooring, but the material cost can be as low as a few dollars per square foot.
See These Styles at Your Local Showroom
4. Painted. Think painted wood floors are only for cottages? As with walls, painting a floor can create as many different moods and effects as there are colors of paint. And if you choose a paint in a durable finish, it will hold up just as well as your wall paint does.
For a contemporary interior, consider a painted floor in a simple, natural hue like a muted beige or an off-white, and mix it with anything from antiques to midcentury classics or hip, trendy pieces.
You can kick up the style of a painted floor another notch by creating patterned effects that echo stone inlays, without that thousands-of-dollars investment. With a little painter’s tape and patience, this can be another great DIY approach to getting high style at home without ripping out your existing wood.
For those who do prefer a relaxed cottage air, a muted color adds a lot of charm, much like an accent wall, only underfoot. Try pale blue for a semi-neutral that will work with neutrals or other colors without clashing.
Cost: Paint and a top coat will cost a few dollars per square foot, and can be applied to existing flooring (with some good sanding and prep) or to inexpensive wood planks for a new installation.
5. Concrete. Concrete floors may sound like the domain of cold, minimalist works of architecture, but they can actually come in many forms to suit various tastes and personalities. Like wood, concrete can be stained (or tinted), allowing the material to feel quite warm and human in a way that beautifully suits transitional or traditional spaces.
Why choose concrete? Well, you can imagine that if the material can handle the wear and tear in an auto factory or warehouse, it can easily handle pets, children and sharp heels.
For an added seal and a gloss effect, concrete is sometimes finished with a coat of resin. This gallery-like look typically comes with a gallery price tag, but for those who enjoy a modern atmosphere with a perfect polish, this look is definitely photoshoot-ready.
It should be noted that concrete does not retain heat well, and thus can be chilly without a heated floor system, but extremely cozy with one installed.
Cost: With heated floors and a sleek finish, the cost can definitely add up. Your budget could range from $2 to $20 per square foot and beyond.
6. Cork. Cork flooring, like bamboo, can be developed very sustainably, making many cork products a smart choice for those hoping to reduce their environmental impact.
In the case of cork, the finish is very important to determining how water-resistant the product will be. However, cork has natural springiness that makes it feel extra comfortable (a little like rubber) and makes it resistant to dents and dings. Plus, it has a unique visual texture that’s a little like wood’s but with a twist, for a very livable sense of flair.
Cork works beautifully for sleek modern spaces or contemporary ones, as it has a natural softness that gives it a friendly vibe. If you’re considering using carpet in some rooms and wood in others, consider cork for the entire home, and get the best of both worlds along with a sense of harmony.
Cost: Cork ranges from $3 to $8 per square foot, but keep in mind that some products may require an additional sealant to hold up to moisture and possible stains.
By Yanic Simard, Houzz
For more information on Windermere Evergreen please contact us here.
New Year’s Tips for the Home Aficionado
Now that the end of the year is upon us, it’s time to start thinking about some New Year resolutions. At Windermere, our resolutions change very little year after year. That’s because the highest expectation we can set for ourselves is to anticipate and respond to the needs of our clients, while supporting the communities in which we serve.
If you’re 2018 resolution is to buy or sell a home, here are some suggestions to help you along the way. For everyone else, we’ve added some tips about building equity and investing in updates to your home.
Buying:
If you’re in the market to buy your first home or if you’re upsizing/downsizing, here are some ideas that can help you make this dream a reality:
- Create a buying timeline and work towards your goal
- Check your credit scores and work to improve your rating
- Start or increase your savings for a down payment
- Start the loan pre-approval process
- Meet with your real estate agent
- Start looking for homes
Selling:
If you are planning to put your home on the market in 2018, here are some good places to start:
- Create a selling timeline to work towards having your home ready for market
- Make a list of home improvements and a plan on how to manage them
- Get rid of the clutter
- Contact a real estate agent
Building Equity:
You may not be moving this year, but you can create a plan to increase your equity in the home you have now. Here are some tips:
- Take advantage of low interest rates by refinancing to a lower rate
- Consider refinancing to a shorter term loan
- Make extra lump-sum payments. Consider using your tax refund, cash gifts, work bonuses, garage sale money, or any other unexpected income toward paying down your principal.
- Pay every two weeks instead of once a month. A biweekly payment plan can substantially reduce the amount of interest you pay because you are breaking the interest accrual down from 30 days to every 15.
- Pay a little extra each month. Even if you’re only rounding up to the next $100 increment, putting a little extra money towards your principal every month can add up.
Investing In Your Home
You can add a lot of value and additional enjoyment to your home by investing in improvements and upgrades.
- Choose a home improvement project that will yield a good return on investment when you do choose to sell
- Create a home checklist to track maintenance projects over the year
- Make eco-improvements to increase your home’s sustainability and reduce your utility payments over the long-term. These improvements are generally a good return on your investment when reselling.
o Upgrade furnace to an efficient model
o Upgrade windows for better insulation
o Add alternative energy resources, such as solar power
o Update toilets and showers to low-flow
o Install a programmable thermostat
o Update to energy-efficient appliances
What are your New Year’s resolutions?
For more information on Winderemere Evergreen please contact us here.
Homeowners Insurance: Protect your home and your loved ones
In addition to providing shelter and comfort, our home is often our single greatest asset. And it’s important that we protect that precious investment. Most homeowners realize the importance of homeowners insurance in safeguarding the value of a home. However, what they may not know is that about two-thirds of all homeowners are under-insured. According to a national survey, the average homeowner has enough insurance to rebuild only about 80% of his or her house.
What a standard homeowners policy covers
A standard homeowner’s insurance policy typically covers your home, your belongings, injury or property damage to others, and living expenses if you are unable to live in your home temporarily because of an insured disaster.
The policy likely pays to repair or rebuild your home if it is damaged or destroyed by disasters, such as fire or lighting. Your belongings, such as furniture and clothing, are also insured against these types of disasters, as well as theft. Some risks, such as flooding or acts of war, are routinely excluded from homeowner policies.
Other coverage in a standard homeowner’s policy typically includes the legal costs for injury or property damage that you or family members, including your pets, cause to other people. For example, if someone is injured on your property and decides to sue, the insurance would cover the cost of defending you in court and any damages you may have to pay. Policies also provide medical coverage in the event someone other than your family is injured in your home.
If your home is seriously damaged and needs to be rebuilt, a standard policy will usually cover hotel bills, restaurant meals and other living expenses incurred while you are temporarily relocated.
How much insurance do you need?
Homeowners should review their policy each year to make sure they have sufficient coverage for their home. The three questions to ask yourself are:
· Do I have enough insurance to protect my assets?
· Do I have enough insurance to rebuild my home?
· Do I have enough insurance to replace all my possessions?
Here’s some more information that will help you determine how much insurance is enough to meet your needs and ensure that your home will be sufficiently protected.
Protect your assets
Make sure you have enough liability insurance to protect your assets in case of a lawsuit due to injury or property damage. Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability coverage. With the increasingly higher costs of litigation and monetary compensation, many homeowners now purchase $300,000 or more in liability protection. If that sounds like a lot, consider that the average dog bite claim is about $20,000. Talk with your insurance agent about the best coverage for your situation.
Rebuild your home
You need enough insurance to finance the cost of rebuilding your home at current construction costs, which vary by area. Don’t confuse the amount of coverage you need with the market value of your home. You’re not insuring the land your home is built on, which makes up a significant portion of the overall value of your property. In pricey markets such as San Francisco, land costs account for over 75 percent of a home’s value.
The average policy is designed to cover the cost of rebuilding your home using today’s standard building materials and techniques. If you have an unusual, historical or custom-built home, you may want to contact a specialty insurer to ensure that you have sufficient coverage to replicate any special architectural elements. Those with older homes should consider additions to the policy that pay the cost of rebuilding their home to meet new building codes.
Finally, if you’ve done any recent remodeling, make sure your insurance reflects the increased value of your home.
Remember that a standard policy does not pay for damage caused by a flood or earthquake. Special coverage is needed to protect against these incidents. Your insurance company can let you know if your area is flood or earthquake prone. The cost of coverage depends on your home’s location and corresponding risk.
Replacing your valuables
If something happens to your home, chances are the things inside will be damaged or destroyed as well. Your coverage depends on the type of policy you have. A cost value policy pays the cost to replace your belongings minus depreciation. A replacement cost policy reimburses you for the cost to replace the item.
There are limits on the losses that can be claimed for expensive items, such as artwork, jewelry, and collectables. You can get additional coverage for these types of items by purchasing supplemental premiums.
To determine if you have enough insurance, you need to have a good handle on the value of your personal items. Create a detailed home inventory file that keeps track of the items in your home and the cost to replace them.
Create a home inventory file
It takes time to inventory your possessions, but it’s time well spent. The little bit of extra preparation can also keep your mind at ease. The best method for creating a home inventory list is to go through each room of your home and individually record the items of significant value. Simple inventory lists are available online. You can also sweep through each room with a video or digital camera and document each of your belongings. Your home inventory file should include the following items:
· Item description and quantity
· Manufacturer or brand name
· Serial number or model number
· Where the item was purchased
· Receipt or other proof of purchase \Photocopies of any appraisals, along with the name and address of the appraiser
· Date of purchase (or age)
· Current value
· Replacement cost
Pay special attention to highly valuable items such as electronics, artwork, jewelry, and collectibles.
Storing your home inventory list
Make sure your inventory list and images will be safe incase your home is damaged or destroyed. Store them in a safe deposit box, at the home of a friend or relative, or on an online Web storage site. Some insurance companies provide online storage for digital files. (Storing them on your home computer does you no good if your computer is stolen or damaged). Once you have an inventory file set up, be sure to update it as you make new purchases.
We invest a lot in our homes, so it’s important we take the necessary measures to safeguard it against financial and emotional loss in the wake of a disaster.
What tips do you have for creating a home insurance inventory?
For more information on Windermere Evergreen please contact us here.
New Year’s Tips for Buying and Selling
Now that the end of the year is upon us, it’s time to start thinking about some New Year resolutions. If your 2018 resolution is to buy or sell a home, here are some suggestions to help you along the way. For everyone else, we’ve added some tips about building equity and investing in updates to your home.
Buying:
If you’re in the market to buy your first home or if you’re upsizing/downsizing, here are some ideas that can help you make this dream a reality:
- Create a buying timeline and work towards your goal
- Check your credit scores and work to improve your rating
- Start or increase your savings for a down payment
- Start the loan pre-approval process
- Meet with your real estate agent
- Start looking for homes
Selling:
If you are planning to put your home on the market in 2018, here are some good places to start:
- Create a selling timeline to work towards having your home ready for market
- Make a list of home improvements and a plan on how to manage them
- Get rid of the clutter
- Contact a real estate agent (If you don’t have an agent, click here to be introduced to a Windermere Real Estate agent.)
Building Equity:
You may not be moving this year, but you can create a plan to increase your equity in the home you have now. Here are some tips:
- Take advantage of low interest rates by refinancing to a lower rate
- Consider refinancing to a shorter term loan
- Make extra lump-sum payments. Consider using your tax refund, cash gifts, work bonuses, garage sale money, or any other unexpected income toward paying down your principal.
- Pay every two weeks instead of once a month. A biweekly payment plan can substantially reduce the amount of interest you pay because you are breaking the interest accrual down from 30 days to every 15.
- Pay a little extra each month. Even if you’re only rounding up to the next $100 increment, putting a little extra money towards your principal every month can add up.
Investing In Your Home
You can add a lot of value and additional enjoyment to your home by investing in improvements and upgrades.
- Choose a home improvement project that will yield a good return on investment when you do choose to sell
- Create a home checklist to track maintenance projects over the year
- Make eco-improvements to increase your home’s sustainability and reduce your utility payments over the long-term. These improvements are generally a good return on your investment when reselling.
- Upgrade furnace to an efficient model
- Upgrade windows for better insulation
- Add alternative energy resources, such as solar power
- Update toilets and showers to low-flow
- Install a programmable thermostat
- Update to energy-efficient appliances
For more information on Windermere Evergreen please contact us here.
An Agent in Seller’s Clothing
Have you ever wondered if your real estate agent understands what you are going through? They come into your house speaking confidently about your neighborhood and market trends. They have vendors ready to help you prepare your home for sale. But do they really think it’s that easy? Do they understand the conversations that follow once they’ve left your dining room table? Have they lain awake at night in worry?
You might be surprised.
I’ve been a real estate agent for eight years and recently attempted to sell my condo. My income hadn’t been what I’d planned; I was upside down and worried about the risks of holding onto it. I wanted less stress, so after months of consideration, I decided to sell.
Here’s how it went down:
-I chose my agent and sat down for a meeting. “Are you willing to meet the market?” she asked? That wasn’t easy to answer!The choices I’d made at purchase (lay out, upgrades, etc.) weren’t as valuable in her eyes as I had anticipated. I tried to fight the urge to feel that my home was worth more than she did.
-We moved out of the condo and hired a great stager to “edit” what we’d left behind. What?! You don’t like the black and white poster of John Lennon from my mother’s Let It Be album?!
-We had handiwork done and a professional photographer shot some great images. My agent listed the property, but after only one day on the market without an offer, I was already anxious.
-Then the Homeowners Association sued the developer (long story, but in short: not good for sales) and convinced me that I was definitely not prepared to meet the market. So, we removed the home from the market, and moved back in.
-Then, the phone rang. Agents wanted to show it, earnestly offering “My clients aren’t concerned with litigation.” Surprise: I didn’t believe it. Right or wrong, I suspected that these well-meaning people would not make it all the way to closing. I wasn’t ready to board that roller coaster.
And, it felt like the market was finally turning.
A property that had once seemed like a heavy weight began again to look like home; like a place that – from a post-tax perspective – is only marginally more costly than renting. So, here I am, happy with my decision to stay in my home and reminded what it’s like to walk in my sellers’ shoes – a win-win situation all the way around.
Michael Doyle is an agent with Windermere Real Estate’s Lakeview office in Seattle, WA.
For more information on Windermere Evergreen please contact us here.
Real Estate Appraisals 101
Appraised value vs. market value
Appraisals are designed to protect buyers, sellers, and lending institutions. They provide a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper. Below, you will find information about the appraisal process, what goes into them, their benefits and some tips on how to help make an appraisal go smoothly and efficiently.
The appraised value of a property is what the bank thinks it’s worth, and that amount is determined by a professional, third-party appraiser. The appraiser’s valuation is based on a combination of comparative market sales and inspection of the property.
Market value, on the other hand, is what a buyer is willing to pay for a home or what homes of comparable value are selling for. A home’s appraised value and its market value are typically not the same. In fact, sometimes the appraised value is very different. An appraisal provides you with an invaluable reality check.
If you are in the process of setting the price of your home, you can gain some peace-of-mind by consulting an independent appraiser. Show him comparative values for your neighborhood, relevant documents, and give him a tour of your home, just as you would show it to a prospective buyer.
What information goes into an appraisal?
Professional appraisers consult a range of information sources, including multiple listing services, county tax assessor records, county courthouse records, and appraisal data records, in addition to talking to local real estate professionals.
They also conduct an inspection. Typically an appraiser’s inspection focuses on:
- The condition of the property and home, inside and out
- The home’s layout and features
- Home updates
- Overall quality of construction
- Estimate of the home’s square footage (the gross living area “GLA”; garages and unfinished basements are estimated separately)
- Permanent fixtures (for example, in-ground pools, as opposed to above-ground pools)
After considering all such information, the appraiser arrives at three different dollar amounts – one for the value of the land, one for the value of the structure, and one for their combined value. In many cases, the land will be worth more than the structure.
One thing to bear in mind is that an appraisal is not a substitute for a home inspection. An appraiser does a cursory assessment of a house and property. For a more detailed inspection, consult with a home inspector and/or a specialist in the area of concern.
Who pays and how long does it take?
The buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $275-$600, but this can vary from region to region.
An inspection usually takes anywhere from 15 minutes to several hours, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for values of the houses around you. A full report comes to your loan officer, a real estate agent or lender within about a week.
If you are the seller, you won’t get a copy of an appraisal ordered by a buyer. Under the Equal Credit Opportunity Act, however, the buyer has the right to get a copy of the appraisal, but they must request it. Typically the requested appraisal is provided at closing.
What if the appraisal is too low?
If you appraisal comes in too low it can be a problem. Usually the seller’s and the buyer’s real estate agents respond by looking for recent and pending sales of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can renegotiate the contract or cancel it.
Where do you find a qualified appraiser?
Your bank or lending institution will find and hire an appraiser; Federal regulatory guidelines do not allow borrowers to order and provide an appraisal to a bank for lending purposes. If you want an appraisal for your own personal reasons, and not to secure a mortgage or buy a homeowner’s insurance policy, you can do the hiring yourself. You can contact your lending institution and they can recommend qualified appraisers and you can choose one yourself or you can call your local Windermere Real Estate agent and they can make a recommendation for you. Once you have the name of some appraisers you can verify their status on the Federal Appraisal Subcommittee website: https://www.asc.gov/National-Registry/NationalRegistry.aspx
Tips for hassle-free appraisals:
- What can you do to make the appraisal process as smooth and efficient as possible? Make sure you provide your appraiser with the information he or she needs to get the job done. Get out your important documents and start checking off a list that includes the following:
- A brief explanation of why you’re getting an appraisal
- The date you’d like your appraisal to be completed
- A copy of your deed, survey, purchase agreement, or other papers that pertain to the property
- If you have a mortgage, your lender, the year you got your mortgage, the amount, the type of mortgage (FHA, VA, etc.), your interest rate, and any additional financing you have
- A copy of your current real estate tax bill, statement of special assessments, balance owing and on what (for example, sewer, water)
- Tell your appraiser if your property is listed for sale and if so, your asking price and listing agency
- Any personal property that is included
- If you’re selling an income-producing property, a breakdown of income and expenses for the last year or two and a copy of leases
- A copy of the original house plans and specifications
- A list of recent improvements and their costs
- Any other information you feel may be relevant
By doing your homework, compiling the information your appraiser needs, and providing it at the beginning of the process, you can minimize unnecessary phone calls and delays.
For more information on Windermere Evergreen please contact us here.
How the American Home has Evolved
Owning a home has been an American tradition from the start. But the home itself has changed dramatically over the years.
For example, you may be surprised to learn how much the size of the average American home has increased since the turn of the 20th century—especially when you compare it to the size of the average family during the same time period.
In the year 1900, the average American family was relatively large with 4.6 members, but the average home featured just 1,000 square feet of usable floor space. By 1979, family size had shrunk to 3.11 members, but the floor space they shared had expanded to 1,660 square feet. And by 2007, the average family size was even smaller still—just 2.6 members—while the average home size had increased by the largest amount yet—this time to 2,521 square feet.
To accommodate those larger homes, property lots have also had to expand in size. In the 1930s and ‘40s, Bungalow homeswere usually built on lots measuring 60 by 100 feet (for a total of 6,000 square feet). However, by 1976, the average size of a single-family property lot had expanded to more than 10,000 square feet. In 1990, it expanded again (to 14,680 square feet). Today, the average property lot in America is a staggering 17,590 square feet.
Exterior building materials
Until the 1960s, the building materials used on the exterior of most homes were limited to brick, wood, or wood shingles. However, by the early 1960s, many Americans chose to cover their homes with a more affordable material that was also maintenance-free: aluminum and vinyl siding. Today, many homeowners are using low-maintenance siding materials made of cement fiber.
Interior building materials
The primary building material for interior ceilings and walls for much of the 20th century was plaster applied over wood lathe. Modern day sheetrock didn’t become popular until the 1950s. In the 1960s, wood paneling and textured walls became prevalent, largely for their quick and easy application. In the 1970s and ‘80s, “popcorn ceilings” became a common way to hide imperfections in ceilings. Today’s style again favors smooth walls and ceilings, which can result in a lot of work removing paneling and textures in older homes.
Throughout the early 1900s, the floors throughout most homes were almost always bare wood. Linoleum tile became a popular choice for kitchens, bathrooms, and bedrooms in the 1940s. However, by the 1960s and 1970s, wall-to-wall carpeting was all the rage—even in bathrooms and some kitchens. Homes today feature a wide array of flooring materials, depending on both the region and the room’s function. For example, tiles are a more popular choice in warm regions than cold ones because they tend to stay cool; wall-to-wall carpeting is still popular in rooms like bedrooms and family rooms, where people like to feel most comfortable, while durable and easy-to-clean hardwoods, tiles and linoleum are more favorable in kitchens and high-traffic areas.
The Kitchen
At the turn of the 20th century, the kitchen was a place where the woman of the house did all the cooking. Kitchens were typically small, closed off from the rest of the house by solid walls, and far more functional than fashionable. Dining took place in the dining room.
Throughout the 1920s and ‘30s, kitchens remained stark workplaces with very few appliances. Food was kept chilled with an icebox (a non-electric, insulated box about the same size as a modern refrigerator that used a block of ice to keep everything cold). However, by 1944, 85 percent of American households had switched from an icebox to a refrigerator.
In the mid 1950s, the kitchen changed dramatically. It not only became larger, it also transformed into the heart of the home, where the whole family gathered to help prepare and even eat meals.
The 1950s also brought a host of kitchen innovations, from the stainless steel sink to electric ovens and stovetops. But the most exciting of all was the dishwasher. The 1970s marked the introduction of the microwave.
Today, the kitchen is still a place where everyone gathers. So it’s not surprising that may people favor open-concept kitchens, with no walls separating them from the dining or family room.
Appliance and amenities
The 1940s census was the first to ask homeowners about some of the amenities in their homes. The results are startling (though perhaps less so when you consider that this was during the depression): Less than 50 percent of homes had hot water, an indoor toilet or a bath tub; about one in five didn’t have a home phone.
By the 1950s, however, things had changed dramatically for the better. That’s when many Americans got a refrigerator, an electric stove, a dishwasher, and, ah yes, air conditioning. Until then, most homes were cooled with nothing more than a ceiling fan at best.
Thanks to the larger, Ranch-style homes being constructing in the 1950s, walk-in closets also made their introduction. The fabulous ‘50s also ushered in the two-car attached garage.
And let’s not forget the television; it exploded onto the scene in the early 1950s and by 1955, half of all U.S. households had sets. Today, the average home has little less than three TVs.
What hasn’t changed
Despite all these changes, one thing has remained the same: The number one reason why Americans chose to buy a home. According to Dan McCue, research manager at Harvard’s Joint Center for Housing Studies, “It’s always been seen as the best way to build net worth and equity.”
Why Owning a Home is Such a Smart Investment
After succumbing to the “Great Recession” ten years ago, the stock market has made a comeback. So, does that mean you should forget about buying a new house and invest in stocks instead? The answer to that question, say experts, depends on your investing savvy, your financial discipline, your age, and your current financial situation.
The first question you need to ask yourself is, “Am I disciplined enough to invest in stocks?” According to two professors who recently studied 30 years of personal-finance performance, you need to be someone with exceptional financial discipline if you want to earn real money in the stock market. Or, you could simply buy a house.
When you buy real estate, the down payment and monthly mortgage payments force you to set aside a significant amount of your earnings on a regular basis. It’s automatic. But if you can’t summon the same discipline to invest that same amount of money in the stock market on an equally regular basis, then stocks are probably going to be a losing proposition, according to the professors’ study.
“We find that if people don’t invest all the money, actually about 90% of the time, you’re better off buying real estate,” says Professor Eli Beracha, co-author of the study.
Other issues that make stock investing risky
Investing guru James Altucher wrote a column in The Wall St. Journal titled, “8 Reasons You Stink at Trading Stocks.” In it, he argues that most non-professionals don’t have the investing savvy required to be successful in the stock market. Here are a few telling excerpts:
- “Nine out of 10 people think they are above-average drivers. Nine out of 10 people think they are above-average investors. Both are mathematically impossible.”
- “Most people sell at the bottom and buy at the top—the opposite of what you want to do as an investor—because they let emotions get in the way of patience and strategy.”
- “It’s really hard to own stocks. It’s not just picking a stock and watching it go up 1,000%. It’s buying it and sometimes watching it go down 80% before it ends up rising 20% above your purchase price. It’s waiting. It’s patience. Psychology is at least 80% of the game. And knowing when to sell? Even harder.”
Age Matters
When you’re young, many financial advisors encourage investing in things like individual stocks. With a long career ahead, you have time to wait for any bad investments to turn around before you may really need the money. But once you’re a little older, with a family, and starting to focus on your financial future, that’s when advisers recommend you buy things like real estate—a conservative investment with a long history of stable, predictable earnings.
The type of loan you choose also makes a difference
If you want to both own a home and invest in stocks, consider a 30-year home loan, which will significantly reduce your monthly payments and leave you with extra money for playing the market. (Just remember the tradeoff: You’ll end up paying thousands of dollars more in interest over the life of the loan.)
If you don’t have a burning desire to play the stock market, choose a 15-year home loan. You’ll pay less interest over the life of the loan, you’ll build equity faster, and, obviously, you’ll be mortgage-free 15 years sooner.
The tax advantages of owning real estate
As a homeowner, you’re entitled to a bevy of tax benefits you don’t get as a stock investor. You can deduct your mortgage interest and property taxes from your annual tax return. Plus, depending on your circumstances, you could also get a deduction or credit for any home-office expenses, moving expenses, capital gains, any “points” used to lower your interest rate, and more.
One caveat: investing in real estate takes time
No matter what some of those reality TV programs show, buying a home should not be viewed as a get-rich-quick scheme. But if you think you’re ready to put down roots for as long as seven years, chances are very good that any home you purchase will appreciate significantly during that time (even if the economy runs into some bumps along the way).
The non-financial benefits
Of course, not all of the benefits of owning a home are financial. For most Americans, their home is a source of tremendous pride, comfort, security and freedom. Most of us also use our homes to showcase our personality, through paint colors, furnishings, landscaping, yard signs, holiday decorations and so much more.
Yes, the stock market is on an upswing currently (depending on the week), but if you want an investment with a long-term track record of consistent returns—plus tax breaks and a variety of personal perks—you may want to buy a home instead.
If you have questions about the buying or selling process, or are looking for an experienced agent in your area, connect with us here.
