Why Homeowners Are Putting More Money Into Their Homes
When the economy is down on its luck, many homeowners scrounge for savings, according to this article from the Wall Street Journal, but not with home maintenance.
Rather than cut back, homeowners increase their spending on routine repairs and maintenance, such as painting during poor housing cycles, says Tammy Leonard, clinical assistant professor of economics at the University of Texas at Dallas, who studied maintenance expenditures of households between 2001 and 2009.
Homeowners are investing more now because they plan to stay there longer. But good maintenance is also a major factor in selling a listing.
“[Good maintenance] is a major, major factor in selling a listing,” Madeleine Romanello, broker associate with One Sotheby’s International Realty in Miami Beach, Fla., says. “The house has to look completely pristine. Every light bulb needs to be working; the house has to be totally clean.
Some buyers also believe cosmetic issues indicate larger functional or structural problems. “The minute buyers see any sort of neglect that’s visible, they think there are more underlying problems with the property,” she adds.
Between 2007 and 2009, after the housing bubble burst in 2006, homeowners upped their maintenance spending by an annual average of 63%, or $423 for the average household, according to the WSJ article, compared with an 18% annual average increase in the period between 2001 and 2007 when house prices were rising. When combining all sample years, the average household spent $671, adjusted to year-2000 dollars, annually on maintenance.
“Their expectations in the tenure of their house may have changed,” Prof. Leonard says. “No one wanted to sell in 2007, and people have thought they would invest.”
But now homeowners are staying put. However, if they want to sell—they’ll need to give their home a little love.
“(Because) in the buyer’s mind, one little thing can trigger a negative feeling about the whole area,” says Linda Olson, an agent with Better Homes and Gardens Real Estate David Winans & Associates in Arlington, Texas.
