The last few years I have observed a number of trends that I can only attribute to what is known as the HGTV Effect. The power of television is certainly changing the way people see real estate. HGTV has influenced viewers in ways that printed media never could. The results are clear in a number of ways.
First, it is cool to be a landlord again. If you doubt it, check out Craig’s List. I cannot remember a time when so many individuals were managing their own properties. This is also evidenced by the burgeoning short-term rental market, which is very much dominated by an entirely new variety of landlord.
The second result of the HGTV Effect is apparent in what I refer to as the dumpster craze. In my neighborhood, we currently have at least four homes with roll-off dumpsters in front of them . . . and a couple of storage Pods. In the not too distant past, most homeowners thought of remodeling as painting their stained cabinets white and installing wood or tile floors. I now refer to that as a phase one update. Now that HGTV has shown Americans how fun and profitable remodeling can be, at least on “reality” TV, everyone seems to want in the game.
This recent, overwhelming urge to remodel and update has been a boon to small builders. When I was building in the early seventies to the early 90s, most homebuilders avoided remodeling, instead preferring to stick to new construction. Now small builders have a very difficult time competing for lots with the big national firms and they have warmed up to the large, more profitable complete make-overs.
The third way that the HGTV Effect is evident is obvious when marketing dated homes. We now see that homes either need to be old enough that they are prized for their well-preserved condition, or they need to be largely updated and well maintained. Houses which still look as they did when built in the 80s are being heavily discounted by buyers – if considered at all. Many buyers are looking for solid, but dated homes to remodel, but they will only consider those houses at a heavily discounted price. The question then becomes, do homeowners need to launch into a major remodel before marketing their home, or do they just discount it for the work that needs to be done? That is the biggest question listing agents deal with every day. The short answer is that it depends on the area, and of course the skills of the owners. Remodeling is extremely expensive and an owner has to be into the property at low price in order to come out with a profit.
Jeff Stewart, CCIM, SRES
Stanberry & Associates, REALTORS