InvestmentShould we move or remodel?

 

The housing market is surprisingly strong right now. If your family needs more space, your options include remodeling your current home, building a new one, or buying one already on the market. Each alternative has its pros and cons.

If you already own your home or have significantly paid down your mortgage, your first instinct might be to make it larger or more efficient. But you must weigh the time, expense, and inconvenience of remodeling against the pricier options of buying and building. Whichever choice you make, ensure you understand the available financing options.

 

Get ready for sticker shock

Housing prices rose over 10% in 2020 thanks to sharply lower inventory.1 Accordingly, the average number of days on market for home sales fell significantly. Demand has been strong in all 50 of the largest U.S. metro markets, but your local real estate professionals can discuss housing prices for the neighborhoods that interest you. Mortgage interest rates are low, making it easier to finance homes despite inflated prices.

 

Remodeling lets you stay put

Some considerations that favor remodeling are proximity to schools, work, friends, and family. The cost will depend on the scope of the work and whether you’ll be contributing sweat equity. For 2020, whole-house renovations averaged between $15 and $60 per square foot, depending on home size, appliances, quality of materials, etc.2 If you just want to remodel a bathroom or kitchen, expect to pay $100 to $250 per square foot. Remodeling builds equity, but don’t underestimate the hassle and inconvenience of living on a job site.

 

Homebuilding puts you in control

When you have strong ideas about the shape, size, layout, and location of your home, building it from scratch can make a lot of sense. The average cost to construct a new home in 2020 was $248,000, with the cost per square foot ranging from $100 to $155.3 You can simplify the process by buying a plan from a local homebuilder. Furthermore, manufactured and modular homes can go up quite quickly and are usually built to high standards. Don’t forget to factor in the cost of land, which can add considerably to the overall expense.

 

Homes in all price points are selling at inflated prices

In 2020, the median home price rose to more than $300,000 and was $307,000 in midyear.4 As inventory narrows, you can expect prices to continue to rise. Budget constraints may have you looking at older homes, which means you will probably be inheriting some problems left over by the seller. Always use an independent home inspector before making a final bid, and budget for any immediate repairs.

 

Your home is your costliest investment

Financing a home purchase, construction, or renovation is an important factor in getting what you want at a price you can afford. Many people are eligible for FHA loans, but there are many other options. If you’ve got the housing bug, contact me to discuss how it fits into your overall financial plan. Together, we can figure out which alternative makes the most sense while observing your financial constraints.

 

 

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. This material was prepared by LPL Financial, LLC. Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation concerning such entity. Securities and insurance offered through LPL or its affiliates are: 

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Guaranteed | Not Bank/Credit Union Deposits or Obligations | May Lose Value | Not Insured by FDIC/NCUA or Any Other Government Agency.

MC-21703-1 1-20

Tracking # 1-05086298

 

Sources: 

 1realtor.com/research/september-2020-data/ rl0/1/20]  

2homeguide.com/costs/house-remodeling-cost

3homeguide.com/costs/cost-to-build-a-house

4bankrate.com/real-estate/housing-trends [9/21/20]

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Holly Farrar

Client Services Associate

As director of First Impressions, I strive to make sure our clients have a comfortable and meaningful experience while providing remarkable customer service at the highest standards. I enjoy going to local Everett events and festivities while spending time with friends and family. I love to read, especially dystopian novels.  I am involved in volunteering opportunities within the community including grocery shopping for homebound people, coffee trailer and first responder appreciation.

Education and Biography

Training

Holly Studied Business and Management at Sno-Isle Business and Management & Everett Community College. She has over 20 years of customer service and administrative experience.

Specialisms

Holly’s focus is to create meaningful connections between our clients and our office. She schedules appointments, answers calls, processes transactions, preparing paperwork to maintain accounts as well as opening new accounts, and transfers.

Albert Ballesteros

With over 25 years of customer service working in the Financial Industry and the State of Washington, Albert is a welcome addition to the service team. He helps with opening new accounts and servicing current accounts. You have probably received appointment reminders from him. He also works with the marketing team in planning monthly letters to clients, planning special events and creating the weekly newsletters.
In his spare time, he volunteers at Northshore Christian Church, having completed two mission trips to the Philippines and has a passion for singing. He enjoys playing and watching most sports but is especially an avid fan of the Everett Silvertips.

Education and Biography

TRAINING

Albert attended Honolulu Community College where he obtained his AA in Liberal Arts.

SPECIALISMS

Albert joined Bailey Wealth Services in 2022. His focus is to provide support to both prospective and existing customers with exceptional customer service. He is very personable and brings professionalism to his role.

Wes Burroughs

One of the things I enjoy most about what I do is educating clients on what is available to them as an investor. Our clients know where they’re at financially and where they are going because we make breaking down the complexities of a constantly changing world a top priority. Outside of work, I love spending time with my wife, Blyn, and playing with our daughter, Sophia. I also enjoy running and hosting game night with friends.

Education and Biography

TRAINING
Wes attended Liberty University where he obtained his BA in Philosophy.

SPECIALISMS
Wes joined Bailey Wealth Services in 2021. His focus is helping families maintain and grow the wealth they already have. Wes enjoys working with our valued clients to facilitate financial relationships by providing solutions, solving problems, and helping them manage their financial lives.

A. Sean Bailey, CFP®

My mission is to assist families as they strive to acquire, accumulate and retain wealth in a tax efficient manner so they may live in retirement with confidence and dignity. When I’m not engaged in professional activities, you can find me on a mountain top with my wife, Kim, and our two children, Eleanor and Oscar.

Education and Biography

TRAINING
Sean received his Bachelor’s Degree in Business Administration, Finance Concentration, from the University of Washington.

SPECIALISMS
Sean Bailey has been in the financial services industry for 30 years. He specializes in developing comprehensive financial, estate and retirement planning strategies for clients nearing and in retirement. Sean is a Registered Principal and Investment Advisor with LPL Financial. He is a CERTIFIED FINANCIAL PLANNER™ Practitioner. Sean is also a member of the Financial Planning Association and Ed Slott’s Elite IRA Advisor Group.

Ed Slott’s Elite IRA Advisor Group is not affiliated with Bailey Wealth Services or LPL Financial.

Sonya Jones

I endeavor to provide excellent service to our clients and organizing processes and procedures to ensure our office runs smoothly. When not working, I enjoy spending time with my fiancé, Erik, and our two boys, Lukas and Archer along with our dog Pixie. I love cooking for them and experimenting with different recipes and techniques, including treats for Pixie. Our favorite family activity is taking road trips, especially to California to visit family and friends.

Education and Biography

TRAINING

 

Sonya received her BA in Art at California State University, Chico and has over 25 years of administrative and customer service experience in the financial services and accounting industries.

 

SPECIALISMS

 

Sonya’s focus is to help clients reach their financial goals by assisting them with their various transactions and paperwork to service and maintain their accounts. This includes opening new accounts and initiating transfers from and to financial institutions. Sonya is constantly looking for new ways to improve our processes to ensure we work efficiently and in a manner that creatives positive experiences for our clients.

Sonya Jones

I endeavor to provide excellent service to our clients and organizing processes and procedures to ensure our office runs smoothly. When not working, I enjoy spending time with my fiancé, Erik, and our two boys, Lukas and Archer along with our dog Pixie. I love cooking for them and experimenting with different recipes and techniques, including treats for Pixie. Our favorite family activity is taking road trips, especially to California to visit family and friends.

Education and Biography

TRAINING
Sonya received her BA in Art at California State University, Chico and has over 25 years of administrative and customer service experience in the financial services and accounting industries.

SPECIALISMS
Sonya’s focus is to help clients reach their financial goals by assisting them with their various transactions and paperwork to service and maintain their accounts. This includes opening new accounts and initiating transfers from and to financial institutions. Sonya is constantly looking for new ways to improve our processes to ensure we work efficiently and in a manner that creatives positive experiences for our clients.