With real estate values down across the U.S., it is important for homeowners to do what they can to try to improve property values, and the effect of trees on property values is often overlooked. Most articles that focus on the return on investment of home improvements list kitchens and bathrooms. Although improving these areas of your home can yield good returns on investment, these improvements can also be quite costly and, in today’s market, the return may not be as great as it once was.

The Value of a Tree in Your Yard

Your next home improvement project may be as simple as planting a tree. What’s the best return on investment for home improvements that increase your home’s value? What are some of the common characteristics of old, wealthy neighborhoods? Think about it. Most of them have big, old trees! Plant a tree in your yard. The value of a tree in your yard will increase as it grows.

If you will be in your home for a few years, plant a tree in your yard in the eight to 10 foot range. The cost of a tree this size should be in the $100 to $150 range, depending on species. If you are planting something more sought after, like Japanese maples, expect to pay more, but the value of these trees also increases more as they mature. The Council of Tree and Landscape Appraisers states that ôa mature tree can often have an appraised value of $1,000 and $10,000.ö Planting a tree just may yield the best return on investment. And a home improvement project this easy can’t be beat. Dig a hole, twice the diameter of the tree’s root ball, plant your tree, keep it watered until established, and watch as the value of the tree in your yard grows along with the value of your home.

Effect of Trees on Property Value

The value of a tree in your yard can improve your property value more than you may think. The Arbor Day Foundation cites some of the following effects of trees on property values:

• The effect of trees on property value. Landscaping can add approximately 10 to 20 percent more value to a property – especially landscaping that incorporates mature trees. Commercial areas with trees also attract more customers (and they stay longer and spend more money), and apartments with trees have reduced tenant turnover.

• The effect of trees on resale value. A well-chosen tree adds curb appeal and makes the home appear established within its environment. According to the Arbor Day Foundation’s research, ô83 percent of realtors believe that mature trees have a ‘strong or moderate impact’ on the salability of homes listed for under $150,000; on homes over $250,000, this perception increases to 98 percent.ö

• The effect of trees on energy efficiency. Depending on how your home is sited on your property, trees can provide shade during the heat of summer or protect your home from the winds in winter. This effect of trees can cut cooling and heating costs. According to the U.S. Forest Service, ôtrees properly placed around buildings can reduce air conditioning needs by 30 percent and can save 20 to 50 percent in energy used for heating.ö If you’re selling your home, this effect of trees on your home could be a real selling point when talking to potential homebuyers.

• The effect of trees on the senses. Whether it’s a tree’s first blossoms of spring or the vibrant reds, oranges, and golds of fall, trees usher in the seasons and announce their passing. Even the bare branches and bark of deciduous trees can be stunning against a stark winter landscape or dusted with snow. Don’t discount the effect a beautiful tree could have in winning over the heart of a potential homebuyer.

• The value of trees for the good of the planet. If you’re not convinced yet of the value of trees in your yard, consider this. Trees do more than provide decoration. As we learned in elementary school, trees absorb carbon dioxide and release oxygen, which helps reduce the impacts of fossil fuel use and keep the planet in balance. The U.S. Department of Agriculture estimates that ôthe net cooling effect of a young, healthy tree is equivalent to ten room-size air conditioners operating 20 hours a day.ö In addition to this effect, tree roots also reduce soil erosion and storm runoff. These days, educated homebuyers and gardeners are interested in energy efficiency and water quality. If you’ve invested time and energy to plant some trees and improve your landscape, the value of a tree in your yard will earn its weight when it comes to winning over potential homebuyers who care about sustainability.

• The effect of trees on your mood. Communities with more trees report lower crime rates and lower levels of anxiety. In one study from Texas A&M University, looking at trees reduced stress within five minutes, as indicated by changes in blood pressure and muscle tension. Communities with lower levels of anxiety and lower crime rates also tend to have higher property values.

• The effect of trees on privacy. A well-sited tree can screen a house from a busy road or a noisy neighbor. The effect of mature trees can create an extension of your home and provide an additional, outdoor room where street noise and the visual impacts of other houses are minimized.

In combination, the effects of trees on property value listed above can provide substantial return on investment for a relatively low-cost home improvement project. Never underestimate the value of a tree in your yard.

For more information, please feel free to contact me or visit my website.

John Reynolds, Associate Broker, JOHN REYNOLDS & Associates.

Keller Williams Flagship of Maryland

443-257-0879 direct

410-729-7700 office

John.Reynolds@KW.com

The last thing a bank wants to do is own a property secured by the bank’s loans. When a property owner is in default and owes more than what the home is currently worth, the bank will work with the seller to offer the property for less than they owe on the mortgage loan.
How much money will banks take off? When buying short sales, how much should I expect prices to fluctuate? On average, banks estimate that holding on to the property after foreclosure will cost up to 18 percent of the home value to complete the inspection, appraisals, repair and maintenance. Instead, it is a much easier and financially sound decision for banks to sell the home ôas isö to avoid any third-party inspection process.
The Negative Side of Buying Short Sales
Buying short sales might seem like a good deal for the buyer, but that’s not always the case. Here are three major conflicts buyers and sellers face when a short sale, pre-foreclosed home is on the market:

• Time: Don’t let the name fool you. Buying short sales takes a very long time. There’s a whole gambit of scenarios of why a short sale might be delayed, but many of the hurdles buyers have to overcome have to deal with secondary financing on the homeowner’s original mortgage, bank processing delays and private mortgage insurance policy breakdowns. Buying short sales is a very complex process, which can leave the short sell buyer in housing limbo for up to six months.
• Condition: Short sale homes often need additional maintenance and repairs. When the current property owner is unable to pay the mortgage on the home, more often than not the condition of the property diminishes over time. Additionally, short sale homebuyers should take into account that the property will have had more than one previous owner, which adds to the wear and tear.
• Lender Restrictions: Banks can renegotiate a short sale at the last second. If a new law passes, the market begins to change or the bank finds out more information about the property, they reserve the right to change the terms of the contract at any point in the process. Banks will also refuse to pay for extra services like seller closing costs or inspections. If you want something specific inspected on the property, you’re probably going to pay for it yourself.

Short sale homes are the real estate market’s diamond in the rough. It’s true that buying short sales can be a very tricky process, but for the flexible and patient homebuyer, the short sale home can be the dream house they’ve been searching for.

Interested in getting more information about short sales in Maryland or other real estate in Maryland?  

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Housing trends are the same. After three tumultuous years, the American population needs to know what is coming in their economy û the good, the bad, and the carefully optimistic. With the effect of the 2010 home buying tax credit done, what will happen to housing trends in 2011? Seven predictions have been espoused and generally agreed upon as truths by most in the housing market. Take note!

Small, urban houses are in

The interest in small homes in walkable, urban centers will continue to grow in 2011. While this will do a lot for revitalizing urban cores, it will be difficult for large suburban home sellers to see results. Home value statistics for people who own small, urban houses will be up.

Green is still growing

The green machine is in full swing in 2011 across all building sectors: industrial, retail, office, multi-family homes, and single-family homes. According to Builder Online, green buildings tend to retain tenants and do not need to jack up lease rates. High retention matched with lower operating costs result in what is ultimately a more stable environment.

Look to see ôgreeningö reach further into the residential sectors, as well as in regions that were previously slow to respond to green building. Building or buying green homes will affect home value statistics.

Home prices will continue to drop

Housingwire.com reported back in November that Standard & Poor’s predicts a 7 to 10 percent drop in housing prices over the course of 2011, despite the glimmer of an upswing earlier in 2010. This prediction is largely due to the huge number of foreclosures that are expected to hit as the new year gets underway. Flooding the market with empty homes will affect home value statistics.

More foreclosures ahead

The Board of Governors of the Federal Reserve System did not have good news to share during Sarah Bloom Raskin’s speech in Boston last November. She announced that close to 2.25 million foreclosures will take place in 2011, with another 2 million to follow in 2012.

The one bright spot: as banks continue a gradual foreclosure process, home prices will likely remain stable and home value statistics will level out.

Mortgages will remain very low

Homebuyers will continue to enjoy extremely low mortgage rates throughout 2011, even though there will be a slight increase compared to 2010. Mortgage Bankers Associates predict that even by the end of the year, the average mortgage will only increase to about 5.1 percent.

The Federal Reserve is encouraging these low rates by buying $600 billion of Treasuries in hope that it will give incentive for potential homebuyers to make a purchase and boost the economy.

Housing works hand in hand with employment

It makes sense: the more people who have jobs, the more people who buy homes. America’s unemployment is still at an all-time high, which constantly pushes against any efforts for an improved housing market. Until unemployment drops below the predicted 9 percent for 2011, significant steps to a recovering housing market are out of the question.

Cash matters most

In the aftermath of 2008 and 2009 and with millions of foreclosures looming, loans still make banks and sellers uncomfortable. Investors are seeing more success with lower, all-cash bids on homes and properties than higher bids that may involve a loan.

Homebuyers competing for a property will need to work to make their offer as attractive as possible, which may mean putting down more money than the asking price and offering a sizable down payment.

2011 to Repeat 2010?

In the end, 2011′s housing market is shaping up to be very similar to that of 2010.
Are these predictions in line with your own? Where do they differ?

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Home sales contracts up

Homebuyers and sellers in the Baltimore metropolitan area signed 2,731 contracts in May, 0.7 percent more than in April and 53.7 percent more than in May 2010, according to RealEstate Business Intelligence LLC, a source of real estate information in the mid-Atlantic region. The monthly increase was consistent with seasonal trends but the year-over-year spike was an anomaly, due to a 48.7 percent drop in pending sales last year related to the expiration of the federal homebuyers tax credit. The median sales price rose 3.2 percent to $221,950 in May 2011 from the prior month, but still 5.1 percent below the $234,000 median recorded in May 2010.