Real estate reflections: Can you guess who is selling their home for 8% less?
Sometimes I geek out over real estate, and sometimes I’m shocked by what I uncover. My latest deep dive into the data revealed something surprising. There’s a segment of our population who is selling their home for around 8.3% less than other sellers. Can you guess which segment it is?
Folks over 65 years old.
Watch our latest Calls with Paul episode for some insight:
Seniors living in Central Austin earn less on their home sale
In the last three months, homeowners living inside the Central Austin loop with an over 65 exemption on their home typically sold their home for 8.3% less than other homeowners. This took me off guard, so I started to look at the listings more closely. Here’s what I found:
These homes often had:
- No staging
- Dated kitchens
- Paint jobs and finishes from a different era
- Paneled walls or outdated wallpaper
- Yards that need help
- Dark or dreary pictures or not many photos at all
Interestingly, homes in the higher price brackets didn’t have the same outcome. They were often better maintained. I can’t say for certain, but I wonder if the difference was attributable to having more disposable income on hand to properly prepare the home for sale.
Home preparation is key to maximizing the profit on your sale
Making simple cosmetic improvements to an outdated home can have a huge impact on the outcome of the sale. Here’s how it breaks down.
Around 25% of home sales in the last three months were comprised of seniors over age 65. The homes were all pretty similar; typically 3 bedrooms with 2 bathrooms around 2171 square feet. I found that the seniors over 65 sold their home for an average of $347.51 per square foot, while folks under 65 enjoyed an average of $379.15 per square foot. That’s significant. For a 2,171 square foot residence that equates to a price difference of $754,444 versus $823,135 – an extra $68,690 to the homeowner under 65.
If the senior home owner would invest a little more to prepare their home for sale– and their Realtor did a better job marketing their home – the seller could make up the difference pretty quickly. Here’s how it plays out using the same example. If the seller spent around $15,000 making some basic improvements to their older home, he or she would walk away with another $53,690. That’s not chump change.
After mulling on it, I got a little angry. I got angry because some of these homeowners were represented by Realtors that I know usually market the homes a lot better than what I saw being done for our older population. And then I got frustrated because with just a little bit of help these homeowners could have sold their home for substantially more.
There’s a solution
First off, let’s all do our part to take care of our senior family members and neighbors. If you know someone with an over 65 exemption that is selling their home, help them understand that a little updating goes a long way to getting them more money. And connect them with a Realtor you trust that will gently guide them through the process.
Second, this is why we launched our Concierge program. No one, including seniors, should have to sell for 8.3% less because they don’t have the resources or the ability to get their home ready for sale. We will -- with no money out of pocket and no interest charged -- front the expenses for landscaping, staging, painting, and other cosmetic improvements. We help you figure out what needs to be done to get your home ready, and the vendor of your choice completes the work and is paid directly by our brokerage at Compass. The cost of the improvements is deferred and paid back from the proceeds when you close on the sale of your home. This program helps level the playing field to ensure everyone maximizes their sale.
If you know a senior who is thinking about selling and doesn’t have the upfront money to prepare their home, please let them know about this helpful program. I’d be glad to walk them through it.
And what about the rest of the Austin real estate market?
As soon as interest rates started going back down, the real estate market heated right up. To add fuel to the proverbial fire, we are getting word that many, many more jobs are coming to town. While I am no economist, I’ve always felt that if you want to get a feel for a real estate market, just look at the jobs being created to gauge the future.
Continued Austin job growth = strong real estate market
While we don’t know exactly how many jobs are coming to town, it’s clear that the tech giants are reserving space. At the Domain 40 floors of office space are reserved. Downtown has 52 floors reserved with 42 of them belonging to Google. Here’s how it breaks down:
In the Domain:
- HomeAway is taking over an entire 16 story building
- Amazon is taking 7+ stories
- Facebook is taking over a 17 story tower
- Apple is expanding its campus and is expected to double its workforce with around 7,000 new jobs
- Facebook has 10 Floors on Nueces
- Google is taking over 35 floors at Block 185 plus another 7 stories on West 5th
These stats alone tell me that the odds are good we are going to see more demand for housing from all the workers set to fill these spaces. If you’re looking to invest, I expect properties around the Domain and Parmer Lane to see greater appreciation. You can see my January real estate predictions here.
If you are a buyer: Rates are low again, but they won’t stay that way forever. Now is a good time to act. There are some bargains out there, especially if you don’t mind putting in a little elbow grease to update an outdated property.
If you are a seller: I’m going to sound like a broken record, but I always want you to hold on to your home if you can so that the value has longer to appreciate and net you more money. Even if you are moving, you’ll never find an easier investment property to own than the one you live in now. If still want to sell, let’s work together to create a plan to make sure your home gets marketed in a way that maximizes its value.
Real estate should be a joyful experience. With experience, know-how, and a lot of care we can get you there. Please reach out if we can be of any help to you or someone you know.
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