Discussion: Does Home Staging Pay Off?

 

http://blogs.wsj.com/developments/2012/09/19/discussion-does-home-staging-pay-off/

Original Post Date: September 19, 2012

By: Stefanos Chen

In the luxury-home market, open houses can feel like red-carpet events, and the listing photography can be as glossy as magazine covers. Elaborate staging to woo buyers seems like a given, with the Journal’s House of the Day providing plenty of examples. But after at least one home featured recently in the Journal went without staging, Developments wondered: Do luxury listings really need rented furniture to sell?

Ryan Serhant, an agent with Nest Seekers International and a mainstay on the reality show “Million Dollar Listing New York,” says he always has listings staged, or thoughtfully furnished, before showings. “They think they want to walk into a blank apartment,” he said, but “buyers don’t know what they want until you show it to them.”

Mr. Serhant says furnished apartments almost always sell faster than unfurnished ones because they give the impression of being move-in ready, even though the space will most likely be bare on moving day. (Staging services usually include rented furniture.)

But the real-estate industry wasn’t always sold on the idea. Barbara Brock, a principal at Sold With Style, a “pre-sale consulting firm” that specializes in home staging, says she remembers a time when homes were sold “as-is,” and the notion of paying an outside consultant to prep the space was still the germ of an idea.

Steve Games, chairman and principal of Pacific Sotheby’s International Realty in San Diego County, said staging first gained traction during the housing downturn in the 1980s, when competition for buyers’ attention gave furnished homes the edge. The practice petered out for a while, he said, until coming back with a vengeance in the mid-2000s run-up to the bubble bursting. Now, he says, it’s a permanent fixture.

“I’ve seen staging come and go, and this time I think it’s here to stay,” he said, with more and more agents figuring the cost of staging into their marketing budget. The industry even has its own support base.

The Real Estate Staging Association, a trade group with about 1,000 members who identify as home stagers and “redesigners,” says research proves that staging works. After tracking 174 unfurnished homes listed for sale in 2011, they found that the homes lingered on the market for an average of 156 days. When those same properties were staged and relisted, they sold in an average of 42 days.

Whether the benefits outweigh the costs, though, is another matter. Shell Brodnax, president of the staging association, said home staging will set back the typical home seller $1,500 to $3,000. On the high-end of the market, Brett Baer, president of Meridith Baer Home, a luxury-staging company, says prices can range anywhere from $8,000 to $12,000 for an 800-square-foot condo, to more than $100,000 for a super high-end mansion.

As several agents pointed out, though, the cost of staging can seem reasonable when the alternative could be a languishing listing.

There’s also the persnickety problem of taste. As most home stagers and real-estate agents will attest, the key is choosing a neutral, “clean” layout that won’t offend the typical buyer.

“Poorly done staging is as damaging as well-done staging can be to the success of a project,” Mr. Games said.

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Housing Recovery Gains Traction

http://online.wsj.com/article/SB10000872396390444620104578005992859391394.html?mod=WSJ_hps_LEFTTopStories

By: Sarah Portlock and Alan Zibel

September 19, 2012

WASHINGTON—Sales of previously occupied homes and construction of single-family homes last month reached the highest level in more than two years as the turnaround of the long-troubled sector provides a boost to the tepid economic recovery.

Existing-home sales increased 7.8% in August from a month earlier to a seasonally adjusted annual rate of 4.82 million, the National Association of Realtors said Wednesday. The month’s sales were 9.3% above the same month a year earlier and are the highest since May 2010 when first-time homebuyers were rushing to qualify for a tax credit.

Meanwhile, housing starts increased 2.3% last month from July to a seasonally adjusted annual rate of 750,000, according to a separate Commerce Department report Wednesday. Single-family home construction, which made up 71% of housing starts last month, was up to its highest levels since April 2010.

“The U.S. housing recovery is for real,” said Sal Guatieri, senior economist with BMO Capital Markets.

In Wednesday’s Realtors report, the inventory of previously owned homes listed for sale in August rose 2.9% to 2.47 million. That represents a 6.1 month supply at the current sales pace, which is consistent with healthy levels.

The median sales price for previously owned homes in August was $187,400, up 9.5% from the same month a year earlier. The higher prices reflect a shift in the mix of homes, with more normal transactions beginning to occur and fewer distressed property sales, said Realtors’ chief economist, Lawrence Yun.

“This is a surprisingly strong report,” said Millan Mulraine, an economist with TD Securities. “The report reinforces our belief that the pieces for a more sustainable housing sector recovery are now falling into place.

The Commerce Department data showed single-family construction reached the highest level in more than two years, confirming that the sector is now helping the otherwise slow recovery. Housing starts increased 2.3% last month from July to a seasonally adjusted annual rate of 750,000. Compared with a year earlier, new construction was up 29%.

Construction of single-family homes, which made up 71% of housing starts last month, grew 5.5% in August to a rate of 535,000 units—the highest level since April 2010, when the market was boosted by federal tax credits. Single-family construction was up 27% from a year earlier.

U.S. homebuilders are growing more optimistic about the market as sales and prices stabilize. An index measuring home builders’ confidence for September is at a six-year high, the National Association of Home Builders said Tuesday, and seeing its fifth consecutive gain.

Still, there are plenty of reasons for caution: Sales and construction starts are still below even their pre-bubble levels, and the year-over-year comparisons look strong because last year was terrible. Tax credits fueled a burst of sales activity in late 2009 and early 2010, and the hangover hit housing markets hard in much of 2011.

One negative for the industry recovery is tight lending standards, which are making it hard for many Americans to qualify for loans. Banks funded about 7.1 million mortgages in 2011, down 10% from the year before, and the lowest tally since banks issued 6.2 million mortgages in 1995, federal regulators said Tuesday.

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Housing starts and existing home sales both rose in August

http://www.latimes.com/business/money/la-fi-mo-housing-starts-construction-existing-home-sales-20120919,0,425937.story?track=rss

By: Jim Puzzanghera

September 19, 2012

WASHINGTON — The rebound in the U.S. housing market accelerated in August as residential construction starts increased 2.3% and sales of existing homes rose 7.8%, according to new figures released Wednesday.

The National Assn. of Realtors said sales of existing single-family homes, townhouses, condos and co-ops rose to a seasonally adjusted annual rate of 4.82 million units in August, up from an annual rate of 4.47 million in July. The rate exceeded analysts’ expectations.

The national median sale price was $187,400 in August, up 9.5% from a year earlier. It was the biggest year-over-year increase since January 2006, shortly before the housing bubble burst. August marked the sixth straight month of year-over-year price increase, which had not happened since early 2006, the Realtors group said.

At the same time, the Commerce Department reported that privately owned housing starts rose to a seasonally adjusted annual rate of 750,000, up 2.3% from the July rate of 733,000. Although that figure was below analysts’ expectations, it was another indication the real estate sector was bouncing back after apparently hitting bottom.

“The housing market is steadily recovering with consistent increases in both home sales and median prices,” said Lawrence Yun, chief economist for the Realtors association. “More buyers are taking advantage of excellent housing affordability conditions.”

The Federal Reserve said last week it would try to support that recovery — and, in turn, drive down the high unemployment rate — by launching another round of bond-buying designed to drive down already historically low mortgage rates.

The average interest rate for a 30-year fixed mortgage was 3.6% in August, up from a record-low 3.55 in July, according to Freddie Mac. But the August rate was well below the 4.27% figure for a year earlier.

Although it remains difficult for many people to qualify for a mortgage, the housing market is strengthening because of pent-up demand, Yun said.

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