Commercial PropertyCan Car Resale Values Signal Resale Preferences In Homes?
It"s good mental exercise to read a wide range of news and imagine how the stories might apply to real estate. One recent survey indicates that certain cars have higher resale than others. These are trends that might also foreshadow what consumer preferences will be in housing.
The average vehicle, according to Kelley Blue Book, holds about 35 percent of its original purchase price value after five years, but some cars hold closer to 50 percent. What makes the difference in perceived value and how important is resale to the cost of owning a vehicle?
Judging by the cars selected by Kelley Blue Book"s most recent survey as the most likely to hold the most value for five years, carbuyers who own pricey German performance cars and eco-friendly Japanese hybrids will be pleased at their investment.
BMW and MiniCooper tied for brand champions, while the Toyota Prius and Honda Accord hybrids took hatchback and sedan model spots. All vehicle types were considered including the winning Volvo XC90, Lexus GX 470 and Porsche Cayenne in the SUV categories, Infiniti M45 and BMW 5 series in the luxury category. The Toyota Tacoma PreRunner "picked up" the pickup segment while the The Toyota Tacoma PreRunner topped the pickup category while the Subaru Outback won the west in wagons. The Honda Odyssey was big in mini-vans. Only one American car made the list -- the convertible Chevy Corvette.
The vehicles share some common bonds -- perceptions of quality and performance based on design, engineering and production that should stand the test of time over the next five years. Six of the ten models also made the list in 2005, indicating that consistency in quality is a factor to holding value.
The apparent contradiction is that gas prices aren"t necessarily the largest cost of owning a vehicle. Neither are repairs, as many high-performance machines spend a lot of time out of commission being fine-tuned and repaired.
"Instead, your biggest expense is nearly invisible, and thus hard to plan for and seek to alleviate," says the Kelley Blue Book site. "That cost is depreciation, and if you are not careful, this hidden factor can cost you more than you might ever realize."
Of course cars don"t have the useful life that homes do, but similar notions of quality and performance could apply to homes holding or improving their value with time despite the wear and tear of occupants.
The lesson for homeowners is that the better they maintain their homes, the higher resale they are likely to enjoy. Homebuyers like properties to be move-in ready, including fresh paint and new carpet.
Interestingly, one of the most important features in car resales is curb appeal, just as it is with homes.
In fact, Kelly Blue Book strongly advises carbuyers to choose a color that will appeal to the largest cross-section of future buyers, a neutral like silver, black or white.
Homeowners are also advised to improve curb appeal with crowd-pleasing paints, finishes, and trims. First impressions matter with design, upkeep and style. Colors should be neutral to appeal to the broadest number of homebuyers. While sellers may like Barney purple rooms for their kids, homebuyers imagining the same space as a home office might be horrified.
Next load the car with as many luxurious extras as possible, suggests KKB.com, from leather seats to navigation systems to anti-lock brakes and alloy wheels.
Older homes are routinely expected to be upgraded for modern resale tastes with wood floors, granite countertops and stainless appliances, or whatever is in current fashion for high-end finishes.
Also important is condition -- maintenance and repairs. Just as car owners keep maintenance records, smart home sellers keep track of warranties, maintenance and replacements.
That a home was cherished by its previous owner is an important selling feature for buyers. They are much less likely to pick over small details if they see that small and large problems have been handled or prevented by proper care and attention.
With two gas-saving hybrids on the list, the need to save energy may also cross over to housing. With heating bills expected to nearly double this winter, homebuyers may not necessarily react this year, but continued high energy bills may see a return to smaller square footage and better space and multipurposing interior designs. Sellers with older homes should overcome perceptions of outdated energy efficiencies by getting their homes inspected for energy loss and taking steps to insulate attics, repair seals, and replace outdated appliances to attract energy cost-conscious buyers.