Friday, February 21, 2014

house woes

It's no secret that we live in a small house. When we moved in nearly ten years ago (!!), it was the perfect size for a young couple buying our first home. We thought having kids was a vague possibility too far in the future to think about. We weren't even necessarily planning on staying in Madison more than a few more years. I'd finish my degree and we'd both find fulfilling jobs somewhere, maybe even in a different city.

Of course, the timing didn't work out quite like that. I had Daniel in the middle of my doctorate, Anya was born just before I finished (hours before, literally), I could barely keep up with all the diapers much less look for a job. Shortly after that the economy tanked, the housing market took a dive, and we considered ourselves very, very lucky to be on sure footing through all of that. We even managed to have the basement finished and add a bathroom a few years ago, which has proved invaluable for having overnight guests (which happens often, with family living out of town) and just giving us a little more space to spread out when we need to.

The problem now, as it has been for a long while, is the kitchen. We have no dining room, so we eat in the kitchen and it is very, very cramped. For over a year, we have been talking with our builder about doing an addition/remodel. The project is straightforward enough: build onto the back of the house to have a dining area, with one corner a mud room/pantry closet. Remodel and update the kitchen in the process, since the metal cabinets are from the early 1960s and starting to rust through the many layers of paint covering them.

Unfortunately, it looks like even this "fairly straightforward" project may turn out to cost more than we bargained for. I'm meeting with the guy next week to talk about numbers and I'm afraid of what he's going to say. It's not that I'm all that surprised, really. Construction projects always go like this, right?

Stuart and I have been going around and around in circles with this problem for a while now. How much is it worth to us to stay in this house? What if we can't afford to fix the house? Should we move? Is it worth leaving this neighborhood for a few hundred square feet of living space? Assuming we could afford to borrow the money to pay for a renovation, it is worth doing so for this house? Because, as Stuart has pointed out many times, building onto the kitchen doesn't change the fact that we have no garage and that the bedrooms are small with tiny closets and the bathroom upstairs is narrow and cramped. There's also the matter of the shared driveway with the mean lady next door.

We tend to disagree about a few of these details, and I hope he doesn't mind that I'm saying so here. Stuart would really like to have a garage, or at least a car port. I don't care so much about that (though my resolve on that point weakens when I have to remove 6" of new snow off the cars in the open driveway and toss shovelfuls of it over the heap that is already chin-high). Garages often just get full of junk and they're another space to clean and maintain. The small closets are kind of a pain, but I also see them as motivation to keep a small wardrobe. I don't like the cramped bathroom, but it's just a bathroom. You do your business, you take your shower, it's fine.

I guess what I'm saying is that none of these things are deal breakers for me. I can live with  small closets and a narrow bathroom and no garage. I can even live with Cranky Pants next door.  I like living in this neighborhood, which is full of modest, quirky houses and people to match. I've even had several people from a nearby, more affluent development tell me they like our neighborhood better than theirs.

can't live with the old, badly-designed, too small kitchen much longer, especially since I probably spend half my time in there during the day. It's worth a lot to me to fix that so we can stay here, so our kids can keep walking to school every day. But it might prove to be too expensive, no matter how badly we need it. So then the question is, do we look at more modest improvements, like updating the kitchen without expanding it (thus saving the cost of excavation), or live with it as is for another ten years when the kids will be nearly out of high school, or move? There's no good answer. Selling our house would be difficult, I think, since we'd probably have to pay for some expensive updates even to put it on the market (the siding and deck are in bad shape), and once again it comes down to what we can even afford to do.

Just asking these questions reveals the position of privilege we are in. That we own a home, that we can even discuss improving it, shows a place of stability not everyone enjoys. I know that, and I remind myself of it often.

But still, every time I have to ask someone to scoot his chair out of the way when I open the fridge, or yank extra hard on the heavy, rusting metal gadget drawer, or fruitlessly scrub at stains in the chipped porcelain sink, or kick the table and 3 pairs of snow boots out of the way because I can't get the groceries in the back door, I feel awfully frustrated knowing there may be nothing I can do about it after all.

2 comments:

Jesse Graber said...

All I know is that moving totally sucks, especially when you’ve been somewhere as an "adult" for a while. Then again, we really like our new place. Sorry to not be more helpful.

Strangeite said...

I want to start by saying that I don't know the Madison market, but there are certain universal truths that apply to the valuation of home prices across the nation.

When considering any renovation or improvement to your home, it is best to consider its peers, because they will be the basis upon which an appraiser will estimate value for possible sale or on behalf of a bank for the purposes of a mortgage. The question that an appraiser will ask themselves is if the subject is "market typical".

I am routinely asked how much adding a bathroom, or renovating a kitchen or building a deck will add to the value of a home, but there isn't a black and white answer. It all depends on what is market typical.

Let's use the example of granite countertops. Say that the subject home doesn't have granite countertops and the owners are contemplating adding them to their kitchen. The cost of doing so would be X. If the vast majority of the homes in the subject's neighborhood have granite countertops, then the addition of granite countertops to the subject will not add any value to the base price of the home. If the vast majority of the homes do not have granite countertops, then their inclusion will add some value, but it will be extremely marginal, as they are not "market typical" (think 10% of the cost). If every house has granite countertops and the subject does not, their absence will lower the value of the home, but probably not by the amount it would have cost to include them.

There are several reasons for this, but the primary one is the presence of investors in the marketplace (especially in today's market). Investors are looking for homes that are priced below the market average so that they can make some quick improvements and either rent or sale the home at a markup. Individual homeowners never can do the improvements for the same cost that investors can

A good rule of thumb to maximize the value of your home is that you want to be in the bottom 25% to 50% of the neighborhood. That is the sweet spot where your home is attractive to buyers but the majority of the homes in the neighborhood are lifting the value of yours.

So you need to ask if the improvements you are contemplating are typical for the neighborhood.

Of course, the above is merely the dollars and cents thinking I use as a real estate appraiser. If this is the home that you love and want to live in for years and years to come, then the "value" of the improvements are more than what they cost.