Analyze the Numbers

analyzing the numbers

Predicting Neighborhood Values

Question:
are there any indicators that can help predict the future movement of home values in your neighborhood?

Answer:
nobody can predict market movements. A number of unforeseen developments can impact neighborhoods and home values.

The most reliable predictor is a "qualitative" review of several factors, namely:

Check your neighborhood

• Double check your surrounding neighborhoods prior to starting any home renovation.
  
  Potential threats such as a new highway construction or other "non-neighborhood" construction may impact your area's future home values.
• Also investigate any potential zoning changes that may be on the docket.
  
  What was once a quiet neighborhood can easily be transformed into a noisy shopping center with increased traffic.
  
  Lookup county and city governments for zoning changes:
  statelocalgov.net
  

Make sure your boundaries are secured

• Review your neighborhoods existing boundaries.
  
  Are they secured? An open field could potentially mean future development that could be positive or negative.
  
  What is the boundary between commercial property and residential property? Are the commercial zones inching closer to your neighborhood? Are there secured boundaries that will halt commercial encroachment.
  
  What about the roads you live on. Are they the main thoroughfares for your neighborhood. What was once a quiet road can easily become a heavy, traffic road by increased development.
  

Estimate the commuting time

• How important is your commute and how much time do your spend on the road?
  
  What about other commuters who may be interested in your neighborhood? Does your neighborhood allow easy access to commuting facilities and highways?
  
  Also investigate what might happen if you change your current job. If you are planning a job change within a few years, you might at least consider the purchase of a new home instead of a major home renovation.

Check current traffic conditions:
sigalert.com

Check your local transportation options:
apta.com

Check the schools

• Regardless of whether or not you have children, check the quality of schools in the community.
  
  Any positive remodeling ROI will depend on the quality of schools in your area, particularly elementary schools.
  
  Investigate the average class size, the facilities, and the method of transportation. Evaluate the overall quality of the public school system.
  
  Locate schools servicing your area. View calendars, student analysis, contact information, etc.:
  publicschoolreview.com
  
  School report :
  homefair.com
  Compare schools:
  schoolmatch.com
  

Do some shopping

• How quickly can you access local shops, grocery stores, restaurants, and shopping centers from your neighborhood?
  
  Can you buy a loaf of bread quickly, or must you travel long distances for basic items?
  
  Further evaluate the quality of merchandise being sold in the stores. Quality merchandise indicate a more stable and upscale market.
  

Walk the neighborhood

• Explore your neighborhood within a 12 block area.
  
  Pay particular attention to your neighborhood's boundaries such as a highway, park, campus, or other fixed structures.
  
  Check to see if the homes in the neighborhood are increasing or decreasing in value. It is a good idea to determine the demand for homes in the neighborhood. Too many "For Sale" signs are a good indication that something is happening.
  
  Find the value of existing or future homes:
  

  view market valuation

  
  

Calculate housing fees:

• What is the tax rate for the area?
  
  High taxes and high municipal service fees can decrease a neighborhood's value.
  
  Lookup county and city governments:
  statelocalgov.net
  City cost comparison:
  homefair.com
  

Check the negatives:

• Any one negative in the neighborhood can counteract two or three positives.
  
  Check for negatives that could potentially devalue a neighborhood. For example:
  
  Rising neighborhood crime.
  How effective is the crime watch programs in your neighborhood?
  
  Check crime statistics:
  homefair.com
  
  
  Heavy traffic in and around the neighborhood.
  Evaluate how traffic patterns have increased, if any. Are there any potential growth or changes in any underdeveloped areas surrounding the neighborhood that can increase traffic?
  
  Note any loud sounds,
  such as airline traffic, nearby factories, major throughways, and ball parks.
  
  Visual pollution,
  such as power lines, radio and television towers, auto and bus fleet parking lots, ball fields that play night games, and salvage yards can devalue homes.
  
  Smells such as bakeries, food processing plants, and factories.
  These units may be miles away, but a down drift could affect the quality of air in the neighborhood.
  
  Find out who frequents the neighborhood and when.
  Some neighborhoods have multiple personalities and attract different crowds during the day or night.

analyzing the numbers

Calculating Remodeling Costs

Calculating the cost to remodel or renovating your home can vary by region and season.

In areas where labor costs are tight or where there is a lot of home construction activity, your remodeling costs can be high.

Another cost determinant is type of renovation.

Expanding your home's physical structure is more costly than making an internal home remodeling change.

Home expansion may require roof extension, exterior siding, insulation, wiring and plumbing, and room decorating.

Calculating the costs of remodeling requires pricing the following:

— construction materials
— construction labor
— permit fees

— decorative enhancements
— repairs due to remodeling
— cleanup

Your contractor should provide these costs when they submit a bid. Make sure you review the bid carefully to ensure that all costs have been included:

view estimating costs

• All required permit fees.
• Labor costs and total hours required. Make sure costs include payroll taxes and workers' compensation insurance.
• Tools and construction equipment.
• Safety equipment such as hard hats, dust masks, gloves, and goggles.
• Materials — includes lumber, plumbing fixtures, flooring, cabinets, paint, insulation, tile, countertops, heating, and ventilation units.
• Incidental repairs that may be required when tearing into the existing house structure.
• Cleanup including rental bins, removal service, and dumping fees.
• Decorative enhancements such as light fixtures, window coverings, and other specialty decor items.
• Subcontractor fees — fees from a specialized contractor such as an electrician.
• Other expenses — may include upgrades and changes.

These costs are best estimated when you supply the contractor a complete project specification plan:
	view remodeling spec planning

analyzing the numbers

Calculating Financing Costs

Use these calculators to estimate how much you can afford for home renovation.

• Monthly Payment Calculator:
  estimates the monthly payment on the amount borrowed
  
• Monthly Affordability Calculator:
  estimates how much you can borrow on a budgeted monthly payment.