Choosing the Home with the Right Square Footage

Buyer Information

Homebuyers are feeling the sticker shock of higher prices, but it’s not just inflation. They want bigger homes. In 1949, the average size of a new single-family home was 909 square feet, while homes grew to 2,480 square feet by 2021. Homebuyers want more than they had before, including more space, energy-efficient appliances, and smart home technologies, all of which is making homes more expensive.

But how much living space does a family really need? According to the National Association of REALTORS®, a typical home purchased recently is 1,800 square feet with three bedrooms and two bathrooms and was built in 1986, but that may not be enough space for some homebuyers. While it’s totally subjective, a good rule of thumb is that each person should have 200 and 400 square feet of living space. So, a family of four would be comfortable with a home of about 2,400 square feet.

To help you choose the right-sized home, consider your family’s needs. Small children can comfortably share a bedroom, but teenagers need more privacy. Aging parents are safer in single-level homes or a downstairs owner’s suite, preferably with a separate entrance and living area. You may need more space if you’re working from home and need a home office, a playroom for kids, a bigger kitchen, or an owner’s suite with his and her baths.

Whatever you choose, make sure the layout and square footage also aligns with how much you want to maintain and pay for utilities. 

Will Your HOA Allow Your Home Business?

About the house..., Buyer Information

Homeowners’ associations (HOAs) are formed by the owners of units within a community to manage, maintain and improve quality of life for residents and increase their property values. And there are four things all HOAs hate—strangers, traffic, safety issues, and anything that might cause declines in property values, such as home-based businesses.

Out of 32.5 million small businesses, about 19 million are home-based or began at home, according to The U.S. Small Business Association. Following the pandemic, many workers found that they want to be their own bosses, but this is a growing issue for HOAs that prohibit homeowners from using their properties for commercial purposes.

While it’s fine to have a home office business such as accounting or search engine optimization, your HOA won’t allow you to use your home for obvious commercial use such as manufacturing, storing large equipment, or making or receiving frequent deliveries. HOAs don’t want people coming and going to your house, or for trucks and cars to crowd the streets and parking spaces. It makes your neighbors feel put upon, inconvenienced, unsafe, and less confident in the security of their community.

As an existing homeowner, you should have a copy of your HOA’s governing documents and by-laws, covenants, conditions, and restrictions—so you can see where your HOA stands on the issue. If you’re considering choosing a home in an HOA-managed community, make certain you review the association documents as a condition of your inspection.

Choose the Right Size for Your Next Home

Buyer Information

Homebuyers are feeling the sticker shock of higher prices, but it’s not just inflation. They want bigger homes. In 1949, the average size of a new single-family home was 909 square feet, while homes grew to 2,480 square feet by 2021. Homebuyers want more than they had before, including more space, energy-efficient appliances, and smart home technologies, all of which is making homes more expensive.

But how much living space does a family really need? According to the National Association of REALTORS®, a typical home purchased recently is 1,800 square feet with three bedrooms and two bathrooms and was built in 1986, but that may not be enough space for some homebuyers. While it’s totally subjective, a good rule of thumb is that each person should have 200 and 400 square feet of living space. So, a family of four would be comfortable with a home of about 2,400 square feet.

To help you choose the right-sized home, consider your family’s needs. Small children can comfortably share a bedroom, but teenagers need more privacy. Aging parents are safer in single-level homes or a downstairs owner’s suite, preferably with a separate entrance and living area. You may need more space if you’re working from home and need a home office, a playroom for kids, a bigger kitchen, or an owner’s suite with his and her baths.

Whatever you choose, make sure the layout and square footage also aligns with how much you want to maintain and pay for utilities.

Second Quarter Stats… Lower sales volume with higher prices.

Current Lansing Area Sales Statistics

Second Quarter 2023 sales statistics (April- June) showed that the average sales price of Lansing area homes increased from $230,299 to $234,818 as compared to the second quarter of 2022. This 2% represents an average home value increase of $4,519 for homes sold during those three months. The fact that there were 535 fewer sales in 2023 (-16.5%) does not represent a decline in Lansing area sales activity.  (These figures include all sales throughout the Greater Lansing Association of Realtors.)

Second Quarter 2023 Sales Statistics

Sales prices have been increasing steadily while the annual number of sold units has been decreasing each year. The 16.5% reduction in total number of home sales thus far this year has been caused was by the low number of homes being offered for sale…not from any lack of enthusiasm on the part of buyer. Just about any properly priced home will receive multiple offers and be off the market within a few days. For sellers, there is a serious reluctance to give up a 3.5% mortgage in order to enter into a 7% mortgage on a different home. This, and unstable economic conditions is the main reason is the low number of homes to choose from.

Spring and Summer sales have been brisk and show no sign of slowing as we move into August. Traditionally, sale begin to slow as we approach Labor Day.

Lansing Area Market View – August 1, 2023
 550 – currently listed homes for sale in the five county greater Lansing area.
 258 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
 340 – homes listed as Pending. (Have completed inspections and will soon close.)
 3168 – homes that have closed since January 1, 2023. 

Current Mortgage interest rates
  30-year fixed – 6.81% ($6.53 per $1000)
  15-year fixed – 6.11% ($8.50 per $1000)

Protect Your Plumbing

About the house...

If you haven’t had to hire a plumber lately, you may not know how much it costs to have one come out and fix a problem that was preventable. First-time homebuyers and new homeowners will really benefit from knowing what to do to prevent household water troubles.

The first thing you need to learn is where your outside water shutoff valve is. That way, if you have an indoor leak from a broken water line or a drip that won’t turn off, you can prevent possible water damage before you call the plumber.

There are also items you should never flush down the toilet. Don’t feel fooled by products like baby wipes, feminine products, facial tissues and makeup removal sheets, and clumpable cat litter that are advertised as flushable. They contain plastic fibers that could clog plumbing, so stick to toilet paper that doesn’t clog pipes. Don’t pour anything down the sink that isn’t water soluble, and that includes oils and damaging chemicals. Older plumbing has narrower pipes, and/or you may not have enough water pressure to send some items along their way.

Waste disposals can pulverize a lot more foods than in the past, but you’re much safer avoiding feeding them anything fibrous such as banana peels, breads or fruits with seeds, starchy foods like potato skins, or foods with nuts. Run water as you put items in the disposal and give them enough time to grind thoroughly. Stuff a sliced lemon down the neck for freshness.

What’s Decreasing Your Home’s Value?

Finance and Taxes, Seller Information

There’s nothing you can do about the location of your home, but that may be one of the reasons why your home’s value isn’t as high as you wish it were. What you can do is make sure other aspects of your property are desirable. When you’re selling your home, you want to meet as many homebuyer preferences as possible and keep them in mind as you search for your next home.

Noise – Traffic noise, basketball-bouncing teenagers, loud music, and construction are just a few things homebuyers don’t want to hear. Add more insulation in the walls, and replace single pane windows with sound-muffling double pane or storm windows.

Danger – A home built too close to a busy street, homes with scary guard dogs, and bars on the windows make homebuyers wary. Take your with you during showings.

High Maintenance Costs – You love your swimming pool and spa, but your homebuyer may not. Don’t make improvements that won’t resell well unless you really want them and they make sense for your home and area.

Luxury features in a starter home – If you’re selling a starter or mid-range home, luxury appliances and finishes are appealing, but homebuyers won’t pay extra for them.

Tacky neighbors – Yes, your neighbors can bring your home’s value down as well as up. Junk in the yard, peeling paint and obvious deferred maintenance can be off-putting to homebuyers. Get the other neighbors together and offer to help the homeowner, especially seniors on fixed incomes.

How Property Comparables Are Chosen

Buyer Information, Finance and Taxes, Seller Information

Whether you’re selling your home or buying a home, your Berkshire Hathaway HomeServices network professional will provide you with a comparative market analysis (CMA), a computer-generated report that shows you what homes similar to yours are selling for in your area, or how the home you’re interested in buying compares to other homes on the market.

CMAs are only available to members of the local multiple listing service, which include licensed real estate agents, brokers, appraisers, real estate attorneys, and local property tax authorities. It takes skill and experience to create a report that can help you choose a listing price range for your home or to help you make an offer on one of the homes you’re seeing. 

A CMA can be as narrow as a city block or as broad as a zip code. It can include data on homes for the latest week, month, or six-month period. It can show you homes for sale and those that have recently sold. CMAs can be made specific with search parameters that show only one-story homes, condos, or homes with swimming pools.

Occasionally, you’ll find that the CMA doesn’t have a nearby comparable. In that case, the search parameters must be widened, which may not give as true a picture of value, for the neighborhood.

You may be pleased or dismayed by what the CMA shows, but you should know that it’s an accurate depiction in real time of current market conditions—until a new comparable changes the results.

Is Home Flipping a Good Idea?

Finance and Taxes

They make it look so easy on TV. Buy a house, fix it up, and resell it for a big profit. But that’s easier said than done. Here’s what you’ll really need to be a successful home flipper:

Cash – Most flippers pay cash for properties. You can get a loan, but you’ll need good credit to qualify for enough to cover the costs of both the purchase and resale transactions, renovations, utilities, homeowner’s insurance, and to cover unexpected expenses. You should have cash to cover your carrying costs throughout the timeline of the project and a tax plan to pay or defer capital gains.

Experience – Successful flippers follow a formula—an undervalued, distressed, or unimproved and dated property that can be purchased using the 70% rule. If you plan to sell the property for $500,000 after renovations, you should pay no more than $350,000 to acquire it, plus the costs to make repairs and updates, allowing you to make a typical profit of $67,000. If the property looks as though it will cost you too much to make it sellable at $500K and still make a profit, it’s not a good candidate for flipping.

Labor and Materials – Most flippers do the work themselves, but you may need skilled labor such as electricians and plumbers. Working without a license can expose you to fines and lawsuits for faulty construction. You must be savvy about the costs of materials needed, supply chains, and have the correct equipment and insurance to work safely.

Housing Shortage Continues into June

Finance and Taxes, Market Update

Despite monetary policy changes by the Federal Reserve in early summer 2022 and winter of 2023 that caused mortgage interest rates to more than double from 3.5% to around 6.5 to 7.3%, the housing market is still moving along, in spite of record high home prices and higher mortgage interest rates. 

May 2023 sales have been brisk and show no sign of slowing as we move into June. Properly priced homes are again receiving multiple offers within a day or two of the listing date. A condition that exists when the number of buyers exceed the number of available homes for sale. The figures below are consistent with those of this month in 2022.

Lansing Area Market View – June 1, 2023
  423 – currently listed homes for sale in the five county greater Lansing area.
  228 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
 398 – homes listed as Pending. (Have completed inspections and will soon close.)
1973 – homes that have closed since January 1, 2023. 

Current Mortgage interest rates
  30-year fixed – 6.57% ($6.37 per $1000)
  15-year fixed – 5.97% ($8.42 per $1000)

Traditional Spring Market is Underway

Market Update

For more than seven years, the Lansing real estate market has been defined by a limited supply of available homes, mortgage rates below 4%, and homes sales exceeding the asking price by thousands. In April of 2022, sellers routinely received competitive offers within a few days of market exposure. In June, mortgage rates suddenly doubled to 7.3% leaving many buyers to reconsider the purchase of a home.

The 2023 Spring homebuying season is beginning in the shadow of continuing inflation and high home prices which may be giving both buyers and sellers reason to pause. However, despite changing market conditions, it’s still a seller’s market…and mortgage rate is the only change!

• The number of buyers continues to exceed the available home for sale.
• Mortgage money is easy to obtain.
• Given the comparative cost of renting, consumers are feeling better about the housing market.
• Sellers may not receive offers exceeding the home’s fair market value.

Home sales statistics for this first quarter of 2023 are consistent with previous years in the Lansing area market. Of course, things may change, but rents have been steadily increasing, making it economically cheaper to buy than to rent.

Lansing Area Market View – April 1, 2023
  405 – currently listed homes for sale in the five county greater Lansing area.
  219 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
  280 – homes listed as Pending. (Have completed inspections and will soon close.)
  1094 – homes that have closed since January 1, 2023.
  6339 – homes that have closed in the past 12 months.

Current Mortgage interest rates
  30-year fixed – 6.42% ($6.27 per $1000)
  15-year fixed – 5.68% ($8.27 per $1000)