In the January issue of Realtor magazine, an article entitled “Small Projects, Big Bang” summarizes the results of the Remodeling Cost vs Value Report 2009-10.  The report outlined a number of different home improvement projects, costed them out in different metropolitan areas around the US and calibrated a percentage ROI on each one. There’s a lot of detailed information in the article (and helpful hints on smaller projects) but here’s my summary for the Portland market:

With so many wonderful older homes on the marker here, it is well worth investing in the following infrastructure upgrades for your home. Buyers and their realtors are always going to value:

•  new plumbing

•  a good sewer connection

•  new or upgraded electrical system

•  an energy-efficient furnace (not oil)

An investment in siding had a really high ROI (92% in our area). Costs averaged out at just below $14,000 but with that ROI, it is certainly an investment worth considering.

Improving the basement also came in with a high ROI. And this can be a simple matter of sprucing up what’s already there. New flooring, a coat of paint, and new lighting fixtures could make a big difference and there may be no need to delve into plumbing or dry wall.

Curb appeal has always been important. A little front yard landscaping can go a long way to making a good first impression on buyers. However, you might also want to give your front door a good look. Replacing the front door with a mid-range product (approximately $1200) had the best ROI of all the improvements at 128%.

Several of the most worthwhile improvements are, not surprisingly, centered on the kitchen:

•  add a breakfast bar (this can be as simple as cutting an opening in a wall, adding a bar and a couple of stools)

•  upgrade the kitchen counter to granite tile (12” tile is a very affordable option compared with granite slab)

•  cabinet fronts (check into refacing or replacing doors or perhaps just the hardware)

•  tidy and organize kitchen cabinets (Yes, buyers open them so adding a roll-out tray or lazy susan can create the illusion of more space.)

•  retile the backsplash to freshen or brighten or just clean up the look of your kitchen

If you need any more information on remodeling or renovations, I keep a list of reliable vendors who could estimate your job for you. And I’m always happy to talk to you about plans for your home with a view to selling at a later date.  But remember, don’t make a change solely for the sake of resale. This project needs to be something that you and your family will enjoy for the length of time you live in your home.

Portland currently is the home of the Portland Timbers, a USL division franchise that plays down at PGE park.  USL is the United Soccer League, and is one step below the MLS level in regards to prestige and ability.  The teams owner is attempting to bring an MLS franchise to Portland, which would require a new soccer-specific stadium at the location of PGE park.  The question is, where do the Portland Beavers end up playing?

Merritt Paulson, the owner of both the Timbers and the Beavers, is looking to build a smaller, more intimate baseball stadium in the Lents neighborhood.  The idea is that it has access to public transportation, highways, and the price is right.  If you look quickly at the Real Estate Market in Lents you see a slight increase in the median pricing of homes over the last year.  Pulling numbers from RMLS I found over 1500 units listed in the immediate area within the last year and over 600 units sold.  The average sold price in September 2007 was roughly $246,000, and in mid-September 2008 it is near $260,000.  The number of units sold per month varied from 32-70, with the majority of months seeing sales of 50 or more homes.  The average days on the market for these homes was just under 2 months.

Has the Urban Renewal project made a difference?  I would say that the sales look consistent if not slightly positive.  The area looks nicer than it used to, and I have more and more clients that are looking for homes in the Lents neighborhood.  Prices are still affordable, and the feeling is that positive change is coming to the area.  Some people believe that the influx of the Beavers will tip the scales in bringing more restaurant and retail business to the area, and more money.  It will interesting to see what happens in the next several years.

The local market is a bit slower than usual, but it is still positive.  In fact, it’s time to take advantage of an opportunity that exists in today’s market.  That opportunity is personal investment and personal wealth.  In the past, you could purchase a property and have to wait years for that property to appreciate in order to earn money on the investment.  Today, you migh earn money immediately upon purchase of a home.  Because of the fact that inventory is higher in our market than it has been the last three years, sellers are dropping prices so that they can get out of their current home and into another.  The home may be worth their original price, but they don’t have the luxury to wait on a buyer.  Therefore, they cut the price for convenience and a quick sale.  Savvy investors and buyers are taking advantage of the opportunity we have in Portland. 

However, many people are hesitating, probably because of the bad press that the National Market is getting in newspaper articles similar to the one I read this morning.  I think we should stay positive about the local market, because there really is a lot of opportunity out there.  Find your Portland Real Estate Expert  and ask about how you can leverage the current market to build your own personal wealth with investment properties.  Also, don’t believe everything you read in the papers.