With Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
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In today’s weekly Real Estate Roundup, Steve talks to Terry Story about some recent trends in the current housing market.
Aside from some of the expected desirable features such as walk-in closets and laundry rooms, many home buyers now want the kitchen-family room instead of the more traditional living-dining room setup.
Changing cultural trends are having an impact on new home design as well. Home builders are creating models to accommodate the trend of extended family members, elderly parents, and grown children coming together under the same roof.
Terry says the commercial real estate market is projected to remain steady and active in 2016 with good cash flow on cash return and a slight decline in vacancies.
Terry has seen a move toward advertising homes for sale by pointing out undesirable features, such as “the worst house in the neighborhood”, which can appeal to someone thinking they can pay a low price and then create the house they want. Terry says this often doesn’t work out to be financially smart since the cost of renovations and the time and energy involved are often not worth the bargain price.
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.
Steve Pomeranz: Hi. 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 Story’s a 26-year veteran with Coldwell Banker, located in sunny Boca Raton, Florida. Welcome to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: From time to time, we look at lists that say what features in your home are hot and what are not. What are on the top of buyers’ lists for 2016?
Terry Story: This, to me, is kind of silly. Not silly, but surprising. Walk-in closets in the master bedroom.
Steve Pomeranz: Yeah, that’s pretty typical.
Terry Story: I just assume most…
Steve Pomeranz: Everybody has them.
Terry Story: I guess that’s not the case. I know older homes don’t have it, but all the new homes, for the most part, have walk-in closets. That seems to be ranked number one.
Steve Pomeranz: Okay.
Terry Story: Laundry rooms, great rooms, so to get away from that separate living room, dining room, where it’s…
Steve Pomeranz: Oh, I hate that.
Terry Story: … more of a kitchen-family room.
Steve Pomeranz: Living room, dining room.
Terry Story: Which, you know, nobody ever goes to the living room.
Steve Pomeranz: I know.
Terry Story: It seems so impersonal. I mean, not the family room, the living room.
Steve Pomeranz: The great room, yeah.
Terry Story: Right. That’s where, you know, the living room’s where you put your nice furniture and nobody’s allowed in there.
Steve Pomeranz: It’s a walkthrough.
Terry Story: Right, exactly…Low, in this city, windows, energy, star rated appliances.
Steve Pomeranz: Sure.
Terry Story: Programmable thermostats, 9′ plus first floor ceilings, central islands in the kitchen, granite countertops, and energy star-rated windows.
Steve Pomeranz: Okay, well, my house, as I was telling you before we went on air, my house has all these things.
Terry Story: We’re all moving to your house.
Steve Pomeranz: I think I’m going to … I was going to say, I’m going to sell my house before this stuff goes out of favor.
Terry Story: Exactly.
Steve Pomeranz: What’s not popular anymore?
Terry Story: Cork flooring in the living room areas of the main level. Pet washing stations.
Steve Pomeranz: Now, I didn’t even know they were popular … I call it the bathtub.
Terry Story: Yeah, exactly. For us, it was always a hose in the backyard.
Steve Pomeranz: A hose in the backyard, right.
Terry Story: Laminate counter tops in the kitchen. I didn’t even know they still did that.
Steve Pomeranz: Yeah.
Terry Story: Outdoor kitchens. Outdoor fireplaces.
Steve Pomeranz: Well, I know someone who just put a refrigerator in outside.
Terry Story: I know, I just put a sink out on my patio area. I guess that’s not hip anymore.
Steve Pomeranz: No, I guess not.
Terry Story: Two-story family rooms, two-story foyers, and media rooms.
Steve Pomeranz: Okay. Media rooms, that used to be very, very hot, right?
Terry Story: Yeah, exactly, so these are the least likely things you’re going to see in the new homes.
Steve Pomeranz: Now, there was a show out in Las Vegas, where they were unveiling the new home ideas, and I’m reading here that they’re building more homes that include space for roommates.
Terry Story: Yeah, buy hydrocodone online no prescription canada they’ve got the roommate in mind. A 5200 square foot house tied into a non-traditional living arrangement for extended families or roommates. Basically, the idea is, there’s a need for mother-in-laws…
Steve Pomeranz: Okay.
Terry Story: … children coming back to the homes. Straight out strange people to be roommates, where you can buy the house and rent maybe part of it out to help offset the cost. Basically, the goal of this is really to accommodate two families comfortably.
Steve Pomeranz: Okay.
Terry Story: That seems to be a trend that we’re going to see more of.
Steve Pomeranz: I know that a lot of kids in their 20s do what is called couch-surfing, right? They’ll go from friend to friend and sleep on their couch, basically, because they’re either broke or they’re waiting for something else to happen. I think this is maybe a continuation of this couch-surfing trend. You have friends; they’re going to come over to your house. You got a place for them that’s not in your stuff, you know?
Terry Story: Right, a separate wing to the house, or maybe in a separate building.
Steve Pomeranz: That sounds good.
Terry Story: It’s an interesting concept.
Steve Pomeranz: Yeah, looking at the future now, I understand that the National Association of Realtors has come out with a report or a forecast looking for a moderate expansion in commercial real estate prices in 2016. What’s that all about?
Terry Story: Yeah, what they’re saying, despite what’s going on globally and domestic hurdles that we’ve had just recent, in the global growth, steady job gains, and stable leasing demands will keep the commercial real estate steady and active and expanding for 2016.
Steve Pomeranz: What about prices? Does it say anything about that?
Terry Story: Property values and price gains are expected to flatten.
Steve Pomeranz: Oh, okay.
Terry Story: They expected them to flatten after surpassing the 2007 peaks in some of the major markets, but investors will still see the benefit of strong income flows generated from new and existing leases.
Steve Pomeranz: All right, so in general, on average, if you’re going to be buying into commercial office space, probably a lot of the appreciation, at least for the time being, is over, but there’s good cash flow there. That can earn a good cash on cash return, while you’re waiting for future price appreciation.
Terry Story: Yeah, and basically, they’re saying vacancies are expected to continue to decline slightly throughout 2016 on all different property types.
Steve Pomeranz: I wonder if you’re seeing this—change the subject here—there’s a new marketing tactic, trend, that admitting that the listing is ugly. Anybody doing that in your neighborhood?
Terry Story: I haven’t seen it, but, boy, I’ve wanted to see it, because there’s nothing like trying to say something nice about an ugly duckling. These are pretty bold things that they’re saying. Some advertising stuff like descriptions of, “dirty, worst house in the neighborhood,” and I understand why they’re doing it. People love eye-catching headlines or, “flipper’s fantasy, but must be cash,” or, “This is truly the worst home in the best neighborhood.”
Steve Pomeranz: Yeah, so you’re getting some kind of a deal based on some kind of value proposition.
Terry Story: Exactly, and there’s a strong market for this, Steve. I’ll give you an example. I just showed an ugly duckling house and a really, really, super nice house, and my buyers want the ugly duckling house because, in their minds, they appreciate what the people had done to the beautiful home, but it wasn’t what they want.
Steve Pomeranz: Yeah, it’s that other person’s stuff or ideas.
Terry Story: Exactly.
Steve Pomeranz: They want to go in with a clean slate and create their own thing.
Terry Story: Exactly, but in order to do that, you also have to have the cash to make all of those additional home-
Steve Pomeranz: The cash and the time…
Terry Story: … and the time and desire.
Steve Pomeranz: … and the desire and the design sense and all of that kind of stuff, which some of us have, definitely not including myself in the design sense aspect of things. Nevertheless, it can be fun for a lot of people.
Terry Story: Yeah, absolutely.
Steve Pomeranz: Do you get a better price if it is the ugliest house in the neighborhood?
Terry Story: When all is said and done, I’m going to say “no” to that.
Steve Pomeranz: Why?
Terry Story: Because by the time you put all the money into it, a lot of times you’re at … the example I just gave you, the ugly house versus the pretty house, they figured it’s going to cost them $65,000 to make it the way that they want it, and they can buy that same other house already done for $65,000 more.
Steve Pomeranz: Yeah, so it’s a question of whether it’s in move-in condition or not. It’s just really a matter of…
Terry Story: Absolutely.
Steve Pomeranz: It’s not dollars, it’s personal preference.
Terry Story: Absolutely.
Steve Pomeranz: Cool. My guest, as always, is Terry Story. Terry is a 26-year veteran with Coldwell Banker, located in Boca Raton, and can be found at TerryStory.com. Thanks, Terry.
Terry Story: Thanks for having me, Steve.
