Home Radio Segments Real Estate Round-up Tiny Homes: Big Hope Or Big Hype?

Tiny Homes: Big Hope Or Big Hype?

Terry Story, Tiny Homes

With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL

Quartz Countertops Are Hot

Steve kicks off Real Estate Roundup by asking Terry which hot new features she’d choose to highlight to make her home listings more attractive to prospective buyers.  Terry’s number one pick is quartz, a countertop material that’s replacing granite in kitchens and bathrooms.  Quartz is more expensive than granite and was primarily found in luxury homes in the past but is now being used more widely in new and newly renovated homes.

Steve says that while quartz is hot right now, when you sell the home five years down the road, something else will likely take the place of quartz as the hottest thing in the market.  Terry refers to the average of nine years that people stay in their homes and says it’s often cheaper to remodel an existing dwelling rather than to buy one that’s been recently redone. She believes that’s why people now are staying longer in their homes than the historical average of six years.

Nickel Faucets Are Hot Too

Terry says nickel faucets are another hot item, outselling stainless steel, chrome, and bronze finishes.  So, if you’re looking for a few inexpensive upgrades, consider nickel faucets as part of your home remodel list.  For flooring, top choices include hardwood floors and luxury vinyl tile.

Jacuzzis Are Out

Jacuzzis aren’t so hot anymore.  Jacuzzi installations have dropped from about 15% of new homes in 2015 to 11%.  Terry jokes that people just aren’t into bubble baths these days and says she’s looking to get rid of the one in her own house because it’s too inconvenient to operate.

The Buzz About Tiny Homes

Steve changes gears to talk about “tiny homes” that have been in the news lately as people seek cheaper home buying options in a tight housing market and asks Terry about any hidden costs.  Terry says one of the biggest expenses with a tiny home is the roughly $25,000 it could take to properly lay the foundation.

Tiny homes average about 400 square feet or less but are quite efficiently designed on the inside, even though the bathroom might be an outhouse.  Steve mentions seeing a few tiny home layouts at the home furnishings store Ikea where everything, including the bathroom was there on display in a few hundred square feet of space, neatly packed and all figured out.

Drawbacks Of Tiny Homes

Terry says getting a mortgage on a tiny home is difficult and financing is usually in the form of an unsecured personal loan versus a traditional mortgage due to the mobility of these homes and the small footage.  Buying insurance is also a challenge, says Terry.  In addition, tiny homes built on trailers instead of directly on a foundation must have an RV (recreational vehicle) certification.

Terry advises prospective owners to look into zoning laws because some towns may have no provisions in their zoning codes for tiny homes, though this could be less of an issue in wide open rural areas.

Finally, resale on tiny homes depends on two things.  If it’s more like an RV, then it might depreciate like a car and become worthless over time.  But if it’s bolted down to a fixed foundation, its resale and price appreciation would depend on its “location, location, location.”

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

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Steve Pomeranz: It’s time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show Terry.

Terry Story: Thanks for having me, Steve.

Steve Pomeranz: When you go to sell a home, you guys have got to figure out what the features of the home would make the most impact to a potential buyer. Like fashion, this stuff changes all the time; it drives me a little crazy. What is the first thing you want to mention in your listing these days?

Terry Story: One of the hot items is quartz. Quartz is a material that is replacing granite in kitchens and bathrooms. You found quartz, primarily, in 500,000 plus luxury market homes, but today you’re seeing quartz being put into everybody’s home.

Steve Pomeranz: Yeah.

Terry Story: I shouldn’t say everyone’s home but-

Steve Pomeranz: Yeah, but I get the point.

Terry Story: Right. So, it’s a more expensive product than granite, but that’s the hottest thing out there. So, when you’re marketing a home and you can say it has quartz, it’s like, “Ooh, it’s got quartz.”

Steve Pomeranz: Yeah, but if you sell it 5 years from now, it’s probably going to be bamboo or something.

Terry Story: That’s right, it’ll be something else. That’s the crazy thing, you know we were talking about on the earlier show, the average age, or the average amount of time people stay in a house is now 9 years

Steve Pomeranz: Yeah.

Terry Story: Well, I’m in my house 12 years, and I’ve already redone my house and now I feel like I have to do it again. I think people are staying because in a lot of cases now, it’s cheaper just to change some things out than it was to go ahead and buy another house that’s already redone.

Steve Pomeranz: Yeah.

Terry Story: So, I think that might be some of the reason why people are just staying put in their houses.

Steve Pomeranz: Is there such a thing as quartz veneer?

Terry Story: Just change out-

Steve Pomeranz: Just put it over, just paste it on. Alright, let’s move on.

Terry Story: Linoleum that looks like quartz, and, actually, linoleum, it’s expensive.

Steve Pomeranz: Oh, yeah?

Terry Story: I went shopping recently and I couldn’t believe how expensive linoleum was. Is that what it’s called? Linoleum on countertops or laminate?

Steve Pomeranz: Oh, no, no, laminate.

Terry Story: Laminate.

Steve Pomeranz: Definitely, not linoleum.

Terry Story: Yeah, linoleum’s floors, okay.

Steve Pomeranz: Laminate.

Terry Story: It’s expensive, I think it’s so expensive because nobody buys it anymore.

Steve Pomeranz: What other features are realtors listing these days?

Terry Story: Believe it or not, nickel faucets. They’re outselling the stainless steel, the chrome, the bronze. It’s just more popular, so if you’re looking to upgrade your house a little bit, and this is an inexpensive thing you can do, you can just change out your faucets.

Steve Pomeranz: To nickel.

Terry Story: To nickel.

Steve Pomeranz: Okay.

Terry Story: From the chrome.

Steve Pomeranz: What about carpet and hardwood floors and vinyl, what’s the best there?

Terry Story: What’s better? Hardwood floors and luxury vinyl tile. Those are the most popular things you’re now seeing in kitchen floors. That’s the direction-

Steve Pomeranz: Okay, I’m sorry listeners, I’m thinking about my own house. I have hardwood floors, so I feel good about that.

Terry Story: Me too.

Steve Pomeranz: Alright, here’s another one, so you know, I always hated spa tubs, the Jacuzzi’s even when they were popular, how are they doing?

Terry Story: They’ve dropped like … They were being installed in about 15% of new homes in 2015 and now it’s done to 11%. That’s just dropping, dropping, dropping. People do not take bubble baths. I’ve always said that they’re a waste of money. I have one and I’m in the process of trying to find somebody to get rid of it. I don’t know even know if it works.

Steve Pomeranz: Yeah, I just never liked this whole idea of having all that water shooting out.

Terry Story: It takes forever to fill up and by the time you fill it up with water, it’s cold because you ran out of hot water in your tanks, you need to a bigger tank to fill it up to put water in your bubble bath.

Steve Pomeranz: Alright, changing gears here. So, there’s a lot of talk and a lot of articles written about people buying tiny homes but again, there may be some hidden costs with tiny homes tell us about that.

Terry Story: Not really an expert at tiny homes, but what I can tell you is the foundation is an important aspect to it. For example, it’s estimated to be about 25,000 for a foundation versus 35—I’m going to laugh saying this—35,000 for a trailer. So, you put the home on a foundation or like a mobile home on a trailer. That’s a huge cost.

Steve Pomeranz: So, there’s an extra, it’s cheaper to build a foundation is what you’re saying?

Terry Story: Correct.

Steve Pomeranz: Okay, than to actually put your home on a trailer.

Terry Story: On wheels.

Steve Pomeranz: Okay.

Terry Story: I think they call it an RV.

Steve Pomeranz: Yeah. By the way, what size home is considered a tiny home?

Terry Story: Anything that’s 400 square feet or less.

Steve Pomeranz: Wow, that is really … That’s like two bedrooms worth.

Terry Story: Yeah, they’re really neat though, because I actually got to see one and it had everything. It had a kitchen, had everything but a bathroom and it was an outhouse.

Steve Pomeranz: If you go to Ikea, I haven’t been in a long time, but they have how to live in 200-square feet. You can really see it, there is a bathroom, there is a kitchen, the bathroom’s right next to the kitchen, well everything’s right next to the kitchen. The bed, the TV’s up in the corner by the ceiling and all of that stuff, they’ve kind of figured out this thing. I could never live that way, but a lot of people like that.

Terry Story: Yeah, and getting a mortgage to get it, if you’re considering a tiny home, know that getting a mortgage is difficult. It may be considered an unsecured personal loan versus a traditional mortgage-

Steve Pomeranz: That makes sense.

Terry Story: That’s due to the mobility of these homes and the small footage.

Steve Pomeranz: Can you insure these homes?

Terry Story: That too is also a challenge and that’s something you need to look into. Tiny homes built on trailers need to have an RV certification, which is different than if it’s built on a foundation.

Steve Pomeranz: Okay.

Terry Story: It depends on who built it, is it one of these do it yourself projects, or was it built by the tiny home industry association? Again, something to be aware of. Zoning laws, they can get in your way. Of course, if you’re in a rural area they’re going to be more lenient.

Steve Pomeranz: Mm-hmm (affirmative).

Terry Story: I don’t know how easy it is to put a tiny home in a regular home owner’s association residential neighborhood, but be aware of zoning laws when considering a tiny home.

Steve Pomeranz: Finally, what about resale value?

Terry Story: Resale, again if it’s on a foundation and it’s in a location, location, location. It’s not going to be different than anything else. If you’re in the right location, have a foundation, it will appreciate. If it’s a property more like an RV on wheels, it’s most likely going to depreciate like a car.

Steve Pomeranz: Gotcha, gotcha. My guest as always is Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton, Florida, and she can be found at terrystory.com. Thanks, Terry.

Terry Story: Thanks for having me, Steve.