Off The Press
April 30, 2013
By David Hayes
A money pit is just one renovation too many
One of the signs of an economic recovery is an upward swing in valuations in the housing market.
For example, the home my wife and I bought less than three years ago has experienced some serious swings in valuation. King County just last year determined the home we bought at $319,000 had devalued down to $289,000. Luckily, we weren’t under water, yet.
But, just last week, my wife checked again after a house in our neighborhood sold at $379,000 (granted it was a two-story versus our one). Seems the county now sees the same house at $328,000.
That got me wondering. That value is only based on the abode on a given plot of land within a determined area. Upgrades are not considered.
So, I ticked off all the upgrades we made and then listed all the outstanding projects and added the sudden problem areas that needed to be addressed sooner rather than later. I began wondering if we hadn’t something else on our hands — a money pit.
ServiceMagic.com actually has three levels of rabbit holes, based upon the percent of repair costs annually versus the home’s value. For example:
-Your home is a Drain if costs are from 1 percent to 5 percent annually.
-It’s a Sinkhole if the repairs are between 1.6 percent and 2 percent.
-And you’ve reached Money Pit status if you’re spending more than 2 percent of the home’s value annually.
Compare driving up to the house today with what it had when we first bought it and you’d see:
-a new roof
-new garage doors
-new front door (red)
-new paint (ugly sky blue to an earthy brown)
-new security lights
-half of the old windows replaced
-all old, rickety garage shelving replaced with nice, sturdy storage units
-new laminate flooring
-new bathroom ceramic floor tiles
That’s to name just a few (too many).
The house is only 20 years old and it needed that many upgrades, yet it still needs a new fence (can only afford one-third of the yard), spray foam insulation (if I had my preferences), the rest of the windows and sliding glass door replaced, and renovations in the master bathroom and kitchen (bathroom’s falling apart and kitchen is stuck in the ‘80s).
Is this what is meant by the “joys of home ownership?”
I don’t even want to add up past and expected costs to determine which level of hell, I mean pit, we’re in.
This economic upturn can’t get bigger fast enough to keep up with our house’s needs.