SOMA Living October 2021

REAL ESTATE FLIPPING OUT

RAISE THE ROOF!

Over time (and not just due to COVID) the SOMA housing market has become one of the most desirable and fastest selling in the state. In the last 10 years the median sales price in SOMA has gone from $482,000 to $775,000, and the number of houses sold each year has gone from 392 in 2011 to 736 in the last year. From a property value perspective, this is exciting! While there are several reasons for this increase, today we will examine how the trend of restoring homes or “flipping” has contributed to these stats. If you are anything like me, HGTV is on a loop at your house. Fixer Upper, Flip or Flop, Rehab Addict - these are all binge worthy depictions of how people can earn a living by restoring older homes. In a competitive marketplace like SOMA, this is a movement we are seeing take flight, but it is important to understand how this is affecting property values. When I am listing a house that is being restored, I spend quite a bit of time on site. This affords me the pleasure of meeting many of you as neighbors. In many instances these homes are in severe disrepair. Perhaps they have been vacant, sometimes for years, and they can attract pests, pose safety concerns with unattended structures or trees, and generally be a drag on the curb appeal of the street. The majority of conversations I have with people who live in close proximity to homes that are finally getting the TLC they need are very positive! They are grateful to have the property cleaned up, happy to relinquish the responsibility of “keeping an eye” on the property, and excited to have new neighbors! As far as a monetary effect, if the restored house then sells at a price higher than the street average, the value of the houses surrounding it increases, a real estate phenomenon known as Progression. Progression doesn’t only apply to houses that are fully renovated. It also helps increase the value of homes that have fewer updates, or that need to be completely restored. If an end user sees that they can purchase a house, make some updates and then the resale value is still there, they recognize it as a sound investment. For homes that are candidates to be “flipped,” an investor will pay more to purchase these houses if they see a greater profit potential – and they often buy in cash, waive inspections and offer terms that are favorable to a seller. So, knowing that property values are on the rise in SOMA, you may be wondering what the highest and best use may be for your house. Identifying how to maximize the sale value, (should you sell to an investor, are there steps you can take to warrant a higher price from an end user, etc.) is the first step that I take as a Realtor to educate you about the process of selling your home. If this information would be valuable to you, please don’t hesitate to reach out!

INTRODUCTORY HOME EQUITY LOAN RATES AS LOW AS

FOR THE FIRST SIX MONTHS

15 Scotland Road in South Orange, NJ

*All loans subject to approval. Rate determined by credit score. Garden Savings is an equal opportunity lender.

Kate Elliott is the leader of The Kate Elliott Team at Coldwell Banker 646-662-6655 Kate.elliott@cbmoves.com Insta: @KeyToNewJersey

OCTOBER 2021 | SOMA LIVING 13

@somalivingmagazine