Lee Morof's Real Estate Blog

When selling a home, it is rare for folks to see in bold big letters, “new carpet just installed”. However, on a practical level, replacing the carpet in a home just before selling can go a long way to helping the deal close.

A Brutally-Beaten Leftover

In just about every used home, the carpet has taken a beating. Even if the home has only been owned for a few years, carpets have taken a tremendous amount of traffic, walked-in dirt, funky smells, and dust that build up over time. That not only changes the color of the existing carpet, it also impacts the air in the house as smells are permanently trapped in that same carpet. And, if the existing homeowner had or has pets, the issues can be ten times as strong.

A Sure Formula

By replacing the existing carpet with a new one that is a neutral color and just installed, it adds perceived value to the home and comes a lot closer to competing with new homes in the area. Everybody buying a home wants to have a sense of newness when entering the home. If it’s an existing home, replacing the carpet will be almost a given for the new homeowner before moving in. So, combining a new carpet with the sale saves the buyer the headache and becomes far more attractive right off the bat.

Removing Embarrassing Conversations

The worst situation to be in is having to explain stains and torn carpet or worn-out patches. Letting them stay practically begs a prospective buyer to argue for a lower price to even disengage. Of course, this issue doesn’t apply so much when it’s a seller’s market and homes are being bid on unseen with high demand. But that isn’t always the case. Rather than handing an argument to a buyer free, adding the carpet could reverse the situation and give you support for a higher sales price.

Case by Case

Your real estate agent will have the best idea of how much a new carpet will apply to your local market for home sales, so start with him or her first. If the current market is looking for lots of quality improvements in a home for sale, you can expect that a new carpet would be to your advantage. And you don’t need to break the bank doing so. Follow the example of builders; use a base level carpet at an affordable price. It will look new, do the job, and help sell your home without paying a premium and cutting into your sale profit.

The S&P Case-Shiller National Home Price Index posted its highest gain in nearly 15 years with a year-over-year home price growth rate of 11.20 percent in January. The December 2020  National Home Price Index reported 10.40 percent home price growth. The S&P Case-Shiller 20-City Home Price Index reported 11.10 percent year-over-year growth with 19 of 20 cities reporting higher home prices. Cleveland, Ohio was the only city reporting no home price growth in January. Detroit, Michigan reported home price growth data for the first time in nearly a year.

Phoenix, Seattle, and San Diego Home Prices are Hot, Hotter, and Hottest

Home prices in Phoenix, Arizona again topped Case-Shiller’s 20-City Home Price Index for January with a year-over-year home price growth rate of 15.80 percent. Seattle, Washington held its second-place position with home price growth of 14.30 percent, and San Diego, California held third position with year-over-year home price growth of 14.20 percent.

Rapidly rising home prices coupled with rising mortgage rates presented challenges for first-time and moderate-income buyers; some have revised their purchasing budgets downward while others have left the market. Analysts noted that buyers leaving the housing market could impact high demand and strong buyer competition which has fueled bidding wars and driven home prices ever higher in popular metro areas.

Craig Lazzara, managing director and head of index investment strategy at S&P Dow Jones Indices, said that January’s home price data supported the position that COVID encouraged buyers to leave congested urban areas for single-family homes in suburbia. He said that many of these households may have accelerated existing home-buying plans.

FHFA Posts 12 Percent Increase in Home Prices; Slowing Momentum

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a 12 percent year-over-year growth in prices of single-family homes owned or financed by the two government-sponsored mortgage companies. According to Lynn Fisher, FHFA’s deputy director of the division of research and statistics, home price growth slowed to its slowest pace since June. She wrote, “While house prices experienced historic growth rates in 2020 and into the New Year, the monthly gains appear to be moderating.”

Home prices are expected to continue growing in popular metro areas, but at a slower pace due to higher mortgage rates and would-be buyers leaving the market. Demand for homes may ease as COVID-driven flight from urban areas slows but families working from home and homeschooling their children also create demand for larger homes.