Smart Moves

“Big house fatigue” is the phenomenon real estate pros cite to explain why some homeowners end up selling far sooner than expected, despite the pandemic.

Take the case of a single mom -- a scientist -- who bought a spacious stone colonial in a popular suburban neighborhood. She made the move from a small townhouse to give her 11-year-old son extra rooms for homework and video gaming. She also wanted space for a home gym.

But soon after buying the house, she realized that caring for the place plus its large yard was much more work than she had envisioned. What’s more, her son was no happier in larger quarters. Hence, the pair made the sudden decision to move back to their former townhouse community.

“Against my recommendation, we put the house on the market in ‘as is’ condition and vacant. This despite scuff marks on the walls, pine needles in the gutters and dead bugs in the basement,” says Ashley Richardson, who handled the listing.

Richardson, who sells property through the Long & Foster realty firm, says that given the extreme shortage of available homes, some sellers have become careless about how they present their place to the public.

“Some people resist spending the money needed for a successful sale. Selling a vacant house is especially problematic, because it feels to buyers like a commercial building rather than a home,” says Richardson, who’s affiliated with the Residential Real Estate Council (crs.com).

Granted, even vacant “fixer-uppers” will eventually sell, so long as they’re located in coveted areas where supply is tight. But these sellers must typically wait longer and earn less than if their place had been improved and staged.

The scientist in this true story learned her lesson the hard way. Though homes in her neighborhood now typically sell in a couple of days and for above asking price, her colonial sat unsold for more than a month without a reasonable offer. It was only after she took a price cut and made cosmetic improvements that she attracted a buyer who still paid less than the list price.

One problem facing those who attempt to sell an empty house is that it often shows poorly online.

“Nearly all real estate agents now use professional photographers. Their high-resolution images show all the detail in a vacant house, which can leave a very bad impression,” Richardson says.

Visual eyesores aren’t the only problem that comes with trying to sell an empty place.

“Vacant houses often have a stale smell because the windows and doors are rarely open. And odors can be a huge barrier to getting a house sold,” says Kurt Albers, a broker in the real estate field since 1994.

He says a vacant house that lingers unsold raises buyers’ suspicions and can encourage below-market offers from those who believe the sellers are under pressure to move.

“People who walk into a vacant house wonder where the people went and why they had to move. They want to know if the sellers lost their home to foreclosure and whether something is wrong with it,” Albers says.

Here are a few pointers for sellers:

-- Address the cosmetic flaws in your vacant home.

Sid Davis, the author of “A Survival Guide for Selling a Home,” says the sellers of a vacant property can’t afford to present their place in anything but pristine condition.

To maximize a sale, Davis contends it’s essential that vacant homes be freshly painted on the interior, in a light, neutral tone.

He also urges the owners of vacant homes to replace worn carpet and refinish (or replace) hardwood floors that need work. In addition, fix any unsightly area visitors might encounter, such as scratch marks in a cast iron kitchen sink.

-- Look into hiring a professional stager.

Eric Tyson, co-author of “House Selling for Dummies,” says a vacant property needs a few well-chosen items of furniture so would-be buyers can see the scale of its rooms.

Of course, you can always rent or buy furniture to outfit a vacant home. But Tyson says a better solution is to hire a professional home stager to lend you the “props” you need to stage your place thoughtfully.

Your listing agent may be trained to provide staging services. Or you can turn to professional stagers’ organizations for leads. One such group is the Real Estate Staging Association (realestatestagingassociation.com).

-- Keep your vacant home in show-worthy condition.

As agents know, one advantage of marketing a home that’s vacant is that it’s convenient to show, without the need for complex arrangements with those living there.

But things can still go wrong. For instance, newspapers and litter can pile up on the front lawn. Lightbulbs can burn out. A leak might develop in a bathroom faucet. Dust and cobwebs are a given.

You can always hire a neighborhood teenager to pick up newspapers and do routine yard work. But Davis says it’s also important to ensure that your listing agent keep a close eye on the property, stopping by at least twice each week.

“Looking after your vacant home is part of your agent’s professional responsibility, and it’s not that much of a burden,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

The pandemic is challenging families financially in every state of the union. Yet there’s one sector of the consumer economy that’s enjoying unprecedented demand: homebuilding.

Take the case of LGI Homes, which builds in 18 states and ranks 10th in size among U.S. homebuilders.

“The demand for affordable entry-level homes has never been stronger. That’s why we’re positive about the long-term outlook for homeownership in all our markets,” says Eric Lipar, the company’s CEO.

What accounts for the surge in demand for new homes? Ivy Zelman, a veteran investment analyst who tracks homebuilder stocks, says the key factor is demographic.

“Many more millennials are now aging into single-family shelters and starting families,” according to Zelman. She also cites low mortgage rates and a severe shortage of available properties as leading reasons for the imbalance between home supply and demand.

“The market is starved for inventory, causing prices to keep rising,“ says Danielle Hale, the chief economist at Realtor.com, the home listing company.

Of course, countless families are struggling to pay their bills and won’t be in a position to buy their first property or a trade-up place anytime soon. But among those who remain fully employed, a number are now actively seeking larger and better outfitted houses, according to research from Zillow, the national real estate company.

Zillow surveys show that numerous home purchasers are eager for more square footage and sizable, enclosed yards.

The desire for many luxury home features is growing out of the experience of families during the pandemic, says Katie Detwiler, the chief experience officer for Berks Homes, a Pennsylvania-based builder.

In 2021, many new home buyers wish to break out of their old cooking habits and start new adventures in the kitchen.

“We’ve seen an increase in requests for gourmet kitchens. This includes bigger cabinets and island additions, so homeowners have the space they need to cook their gourmet meals,” Detwiler says.

Those shopping for new homes also desire smart home technology, including touchless appliances and self-cleaning toilets. In addition, they want dedicated spaces for one or two home offices -- what builders call “Zoom rooms.”

Yet personal finance specialists strongly advise new home buyers to ensure they balance their desires for extra space and fancy features against the need to live in a convenient location.

“OK, so maybe your employer has given its blessing to a full-time work-from-home schedule until the pandemic is over. But after that, the company might insist you go into the office at least a couple of days each week. If that happens, you’ll regret living 200 miles from work,” says Eric Tyson, the co-author of “Homebuying for Dummies.”

Here are a few pointers for new home buyers:

-- Look for a locale where property values will likely rise.

James W. Hughes, an expert on housing demographics, isn’t predicting a drop in real estate values anytime soon. But in the aftermath of such a decline, he says the recovery would come earliest in areas long popular with families who have school-age children, a large segment of the suburban home-buying market.

The first neighborhoods to bounce back from the downturn of 2008 were those that remained popular throughout the recessionary period, says Hughes, a professor at Rutgers University.

-- Choose a community with an excellent elementary school.

“Even more than the middle or high school, an excellent elementary is something families seek out when they’re moving,” he says.

How can you be sure the house you purchase will be served by a high-performing elementary? Real estate agents are reluctant to characterize schools with descriptive adjectives. But they can quickly assemble reams of statistics, such as test scores, that will let you compare one school to another. Or you can find these data yourself by going to the local school system’s website.

-- Make sure the new home you buy is solidly built.

Abraham Tieh, a longtime Texas real estate broker, notes that the homebuilding industry is dominated by many small to mid-sized entrepreneurial companies. And these firms vary widely in the quality of their workmanship.

There’s no reason to accept second-class construction when you choose your new suburban house. But how can you identify subdivisions where the builders take extra care? One way is to closely examine the interior detailing in a house as one indication of its construction quality.

“You can’t see behind the walls of a house that’s already built. However, you can see if the cabinetry and wood trim were well finished. Also, you can judge whether the builder used long-lasting roofing materials or the cheapest available shingles,” says Tieh, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

“People already living in the neighborhood will tell you straight out if there have been lots of problems with the builder or if major construction flaws have surfaced,” Tieh says.

While you’re at it, he says you should survey the neighbors on the energy efficiency of their homes. For instance, ask them how much they typically pay monthly for gas and electric service and whether their homes were outfitted with airtight, energy-efficient windows.

“Utility costs should be of critical concern to anyone moving into a very large home,” Tieh says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Early this year, an engineer in Minneapolis lost her job at a large tech firm. But at age 67 and ready to retire anyway, she wasn’t crestfallen. An extrovert who relishes sociability, as well as tennis and golf, she soon plotted an active retirement in which she could indulge her favorite pastimes.

But COVID-19 threw a wrench in her plans. As a single woman living alone, she’s spent months in isolation, rarely able to see friends and family. Fed up with the restrictions and anticipating early access to a COVID vaccine, she’s now accelerating her plans for 2021 to make up for lost time.

What does the engineer have in mind for a robust retirement? Though her house is paid off and she never expected to buy more real estate, she’s now pondering the purchase of a second home in a large Florida retirement community. That way she could escape to warmer weather when the Minnesota winters prove too harsh.

“I’m exhausted with the limits I’ve gone through with COVID. It’s time to reinvent my life,” she says.

One reason the engineer can buy a second place is because her lakeside Minneapolis place, located in a popular suburb, has skyrocketed in value. That will allow her to tap a small portion of her equity with a new low-rate mortgage to buy a Florida place.

Obviously, not all Americans have the luxury of buying even a first home due to the economic issues now facing the nation. Many renters are now facing the very real prospect of eviction, and many retirees who own homes but depend on fixed Social Security payments must sell their homes to simply maintain their standard of living.

“The economic rebound has been sharp but is by no means complete. It has created distinct winners and losers among sectors in the economy,” says Danielle Hale, the chief economist for Realtor.com, the national real estate listing company.

Margie Casey, a real estate author and broker, says that in seeking a second home, many retirees want to retain the original place where they raised their family.

“A retiree’s primary place is usually near their base roots -- ideally close to family and longtime friends. The second is often just a small condo or a detached ‘villa’ in a resort setting like the beach or mountains,” Casey says.

Years ago, ownership of two homes was solely for the wealthy. But now more middle-class retirees are able to buy a second residence in a separate state.

“These aren’t rich people. Many were teachers, nurses or government workers. Yet many have traditional pensions that give them enough income to support homes in two parts of the country,” Casey says.

Here are a few pointers for retirees considering a second home purchase:

-- First, seek out advice from a financial planner.

Casey, who reviews retirement communities on her website (realestatescorecard.com), says anyone considering two-home ownership should first discuss the financial implications with a professional adviser.

In theory, it should be no more expensive for retirees to own two homes, as long as their mortgage payments are limited. But in reality, dual homeownership can have hidden costs -- after taking into account homeowners' association fees and travel costs.

Property taxes are also a key element, especially if a local government is running a budgetary shortfall and may have to raise taxes.

“Once you investigate the taxes, you may decide to live one state away from your grandchildren, assuming that lowers your cost of living,” Casey says.

-- Make sure you’d be comfortable with condo living.

Michael Crowley, a real estate broker and past president of the National Association of Exclusive Buyer Agents (naeba.org), says buyers contemplating the purchase of a condo as a second home should exercise caution.

“Compared with living in a standalone house, a condo-apartment is a big change. It’s just personal taste, but some people never adjust well to condo living,” says Crowley, who’s worked with buyers since 1993.

As he notes, there are other options for small-scale living that provide many of the worry-free features of a condo.

For instance, in many “planned unit developments,” you can buy a one-level detached unit that comes with exterior maintenance, including lawn service.

-- Don’t overlook transportation access before buying a second place.

Many a retiree has selected a second home without taking into account airport access, which can be a major error.

Depending on an out-of-the-way airport makes it harder to travel to distant locations for vacation or to see your kids. It can also add to your airline bills.

“Try to live near an airport that’s a hub for one of the major carriers. That can save you a ton on travel costs,” Casey says.

Another transportation factor to consider is proximity to major roadways, including interstates.

“Many retirees hope to live within a two-hour drive from their children,” Casey says.

-- Temper your expectations about visits with your offspring.

“Living near the grandkids is a top consideration for lots of retirees,” Casey says, but she advises realism about how often you’ll see family, no matter how close they live.

“Your kids have busy lives. ... Sure, you hope to see them often. But don’t focus your whole retirement on this factor. What’s equally important is to choose a lifestyle that works for you,” she says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)