There are a number of factors that influence price appreciation for your home. Trends in the real estate market, economic shifts, and the condition of your home, all can contribute to gaining a value increase. Here are some influencing factors to keep an eye on.

TRENDS IN THE REAL ESTATE MARKET.

SUPPLY AND DEMAND OF HOMES.

When buyer demand exceeds the supply of homes for sale, your property value increases. As buyers compete in bidding wars to score a home in a very tight market, it drives the final sales price up. 

In the local real estate market, demand is currently strong for homes in Oconomowoc and the Lake Country area. The total number of listings are significantly down, compared to previous months. As a result, we are seeing a solid seller’s market and a remarkable growth rate of median prices.

AREA COMPS.

Recent sale prices of comparable homes in your surrounding area are taken into account, when appraisers and real estate agents determine your home’s value in the current market. When homes sell for more money, home prices are pushed up, allowing you to set a higher initial listing price.

Want to know what your neighbor’s home recently sold for? Check out sold listings on our website.

 

ECONOMIC INFLUENCES.

Despite the economic distresses that spawned from the pandemic last year, 2020’s housing market was robust. However, property values are deeply influenced by economic factors that directly relate to buyer demand including:

MORTGAGE RATES.

When mortgage rates are low, more buyers enter the market, eager to lock in a low, fixed rate mortgage that could save them thousands of dollars over the lifetime of the loan. Your property value will rise if buyer demand exceeds the amount of housing for sale in your area.

In Oconomowoc’s current real estate market, historically low mortgage rates are fueling buyer demand, and there are significantly less new listings coming on the local market than usual. This combination has accelerated median price growth for homes in the area. Check out the chart below illustrating today’s historically low mortgage rates.

 

EMPLOYMENT FACTORS.

When people gain financial and job stability, buyer demand often increases. More renters may be able to afford purchasing a home, and existing homeowners may consider moving to their next home. If there is strong job growth and creation in your region, incoming workers competing for housing help increase property values.

POPULATION GROWTH.

Modifications to the workplace, fast tracked by the pandemic, has allowed more people to work from home. This trend has encouraged many to move out of busier metro areas, to more suburban communities such as Oconomowoc, increasing demand for housing in the area.

 

YOUR HOME AND LOCATION.

YOUR HOUSE.

The condition and buyer appeal of your house both play a role in your property’s value.

Livable space: When you expand your home’s livable square footage, it raises the value of your home. Additions, and finishing your basement and attic improves your home’s worth. Enlarging your kitchen and increasing the number of bedrooms and bathrooms add the most value.

Upgrades: Larger upgrades can add value and buyer appeal to your home such as a new high efficiency HVAC system, repairing or replacing your roof, and new energy efficient windows.

Renovations: Modernizing your home can help boost buyer interest and add worth. Add to your resale value by remodeling your kitchen if it’s outdated, create a more open floor plan, update old fixtures, add or improve a deck, and paint your walls with a fresh coat of paint.

Landscape and curb appeal: Well landscaped homes are worth more than those without, and can support a higher listing price. Besides your yard, consider the condition of the exterior of your home.

 

YOUR LOCATION.

Property values fluctuate at different rates in different communities. There are a variety of location-based influences that can affect your property value.

Distance to parks and nature. If your home is adjacent to a park or conservancy, it will hold a higher value, even compared to other homes less than a mile away. Nonetheless, homes in close proximity to outdoor recreational opportunities and nature still retains buyer appeal.

School District. The quality of your local school district affects your home’s resale value, as it directly impacts buyer demand. A large percentage of buyers are strongly influenced by the quality of the local schools.

Access to Amenities. Having convenient access to major highways and amenities can add value to your property. If you live in an up-and-coming area, commercial development can help boost your home’s worth.

Sense of Community. Many home buyers desire living in an active and social community. Localities that host community events and social opportunities for residents, can help make the area a desirable place to live. These areas can see an increase in buyer demand, and amplify local property values.


 

If you have questions about the local real estate market, or curious to know what your property could sell for in today’s market, please don’t hesitate to submit an inquiry below or contact one of our agents directly.

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graphic bearing files with real estate myths printed on them

Myths are commonplace in our world; it can be hard to distinguish between the truth and fiction with such established lore. Unfortunately, myths are profuse on both sides of the transaction when it comes to real estate. On Myth Mondays, we will be analyzing common real estate myths and using our experiences/knowledge to label them as truth, fiction, or somewhere in between. 

THIS MONDAY, OUR REAL ESTATE MYTHS ARE SELLER-FOCUSED

  1. You should price your house higher so you have room to negotiate.
  2. Home values listed online are accurate. 
  3. You should always renovate your kitchen & bathroom before you sell.
  4. Going with the first buyer is never a good idea. 
  5. Selling a home is just how it looks on TV.  

 

MYTH ONE: YOU SHOULD PRICE YOUR HOUSE HIGHER SO YOU HAVE ROOM TO NEGOTIATE 

Overpricing a home is not the best tool to facilitate negotiations. The first step in starting negotiations with a buyer is getting them through the door, overpricing a home can prevent them from ever happening.

Additionally, buyers categorize homes in their minds often by price point; overpricing a home will lead to stiffer competition in the minds of buyers, as it bumps it into a different category of homes that may have more bells and whistles. 

Overpriced homes are more likely to stay on the market for longer, which can lead to buyers questioning the issues that may be causing a longer length of time – when it is all due to price. 

If you’d like to learn more about the issue with overpricing homes, check out our blog post on the topic by clicking here. 

Myth One: Busted 

 

MYTH TWO: HOME VALUES LISTED ONLINE ARE ACCURATE

An innovation in the world of real estate is the ability for sellers to look up estimates about their home prices online with websites like Zillow & Realtor. However, some sellers take these online prices as total truth – when in some cases, they may be misleading.

The estimates are calculated through an algorithm based on the price/square foot in the area. In this way, it is automated, focused on patterns, and does not give value to unique property aspects. So, although these estimates can certainly provide some insight, they may not be 100% accurate in all cases; especially if it is a unique property or there is a sudden market change that the algorithm has not accounted for in time.

It is important to note though that the algorithms have been worked on and are gradually becoming more nuanced, but at this point, it doesn’t seem that they can account for all property benefits.  

Myth Two: Busted 

 

MYTH THREE: YOU SHOULD RENOVATE YOUR KITCHEN & BATHROOM BEFORE YOU SELL. 

Renovations are something sellers need to consider before putting their home on the market. Often, major renovations, like that of kitchens & bathrooms will not result in a major return on investment.

Zillow study found that a “mid-range bathroom remodel of $3,000 or less could bring back $1.71 for every dollar spent,” while higher-end remodels saw a more modest .87 cent return on the dollar. Meanwhile, Zillow found that kitchen remodels saw a return of .50 cents. So, if you’re remodeling these two areas solely for a return on investment, it is generally not advisable. However, minor touch-ups may be a good idea, with changing out fixtures or cabinet pulls to more universal options to help present more of a blank canvas for interested parties to imagine their own lives in the home. 

If you’re interested in learning more about remodeling or selling as-is and our agent’s thoughts – check out our previous blog post on the topic. 

Myth Three: It depends on the property and the seller

 

MYTH FOUR: GOING WITH THE FIRST BUYER IS NEVER A GOOD IDEA. 

Some sellers go into a sale with the intention of not taking the first offer because they don’t see it as a good idea. They think that something better will always come along; however, that may not be the case. It is always a good idea to carefully consider all offers – no matter what order they come in. 

There are situations where it might be a better idea to wait and others where you may want to take that offer – it is all dependent on the situation. A good agent will be able to walk you through all the considerations

Myth: Talk to your agent to get the best option for you!

 

MYTH FIVE: SELLING A HOME IS JUST LIKE HOW IT LOOKS ON TV 

We all know it, HGTV. The channel were we can see home selling, renovating, updating, and building all the time!

There are so many television shows that showcase the process of home selling & buying. However, like most things on television, there is an element of production that separates it from reality. In this way, it makes it look like buyers only choose from a few homes, that sellers make decisions in minutes, and that open houses always sell a home. Although it does make for excellent television, it can be confusing & disheartening when real-life selling doesn’t work out the same way. 

Myth: Busted (but that doesn’t mean you have to stop enjoying all of your HGTV shows!)

 

OVERALL. . .

Myths can easily influence people’s choices and viewpoints on things. In the case of selling a home, it’s an important thing to be able to see clearly and not be influenced by the rampant misinformation. We hope that this gives you a better idea of whether these particular myths are truth, fiction, or something else. If you have any more myths or viewpoints on selling real estate that you’re wondering about – please contact us; one of our qualified agents would love to help you!

 

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As we head into winter, it’s a great time to think about color, at least in Wisconsin! Every year, paint brands decide upon a color that they believe will embody the next year or be the new hot design choice; plenty of companies have already released their new color for 2024. It’s always a fun way to learn about new paint colors and maybe even get a new color to paint a wall or two. 

 

SHERWIN-WILLIAMS – UPWARD 

Sherwin-Williams has elected to go blue this year, choosing their paint Upward as their 2024 Color of the Year. They refer to it as a denim blue with gray undertones that creates a peaceful environment, which doesn’t overwhelm. They designate it as a colorful neutral, allowing for a sophisticated splash of color. 

BENJAMIN MOORE – BLUE NOVA 

Benjamin Moore has chosen the color Blue Nova as the 2024 Color of the Year. This color is a rich combination of blue & violet and was chosen to represent the blend of modern & traditional styles popular in home design right now. 

 

C2 – THERMAL

C2 has decided upon Thermal as their 2024 Color of the Year. This color is a very light blue, which C2 compares to the blue of the sky during the fall & winter months – a crisp blue with white undertones. They find it to be calming, while still offering a bright point in any room. 

 

DUNN-EDWARDS – SKIPPING STONES

Dunn Edwards has also elected to choose a blue-toned paint as their 2024 Color of the Year in Skipping Stones. This cool blue is described by the company as timeless, while still being fresh and modern. 

 

KRYLON – BLUEBIRD

In keeping with the blue theme, if you want a louder blue color, then Krylon’s 2024 Color of the Year is the one for you – Bluebird. This bright, vibrant blue is the pop of color to compliment your neutral walls or décor. 

 

GLIDDEN – LIMITLESS

Glidden has decided to switch it up for the blues, instead deciding to go with Limitless, a yellow-neutral, for their 2024 Color of the Year. They’re calling it the modern neutral, an emergence of warm neutrals in design choices that they think will be in this year. 

 

BEHR – CRACKED PEPPER 

A stark contrast to the other colorful, light options, Behr has gone with Cracked Pepper for their 2024 Color of the Year. This dark, moody charcoal color is sophisticated and certainly a statement piece; however, it is still neutral enough to not overwhelm or take over a space. 

 

DUTCH BOY PAINTS – IRONSIDE

Similarly to Behr, Dutch Boy Paints has decided on a slightly moodier color for their 2024 Color of the Year, with the choice of Ironside. This is a deep olive shade with dark undertones, creating a paint that is bold & elegant. Dutch Boy Paints markets Ironside as a versatile paint that can elevate any design. 

 

GRAHAM & BROWN – VIRIDIS 

Graham & Brown turns away from the sky and to the forest for inspiration for their 2024 Color of the Year, with Viridis. This muted green is a welcoming option for wall painting or accents. They refer to it as a tone that reflects harmony & stability. 

 

VALSPAR – RENEW BLUE

Just when you thought we were done with blue, it makes a reemergence, or in this case – a renewal, in Valspar’s 2024 Color of the Year choice with Renew Blue. This cool-toned blue color is said to be inspired by fleeting elements found in nature, like fog. 

 

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They’re not out for your brains, but the empty office buildings have been termed zombie buildings – as they sit vacant, wasting away. These “zombies” are, largely, a result of the pandemic and the boom of work-from-home that came with it. Even now, three years on, hybrid work has become more of the norm, and these buildings remain empty. Experts fear these these buildings represent a debt timebomb and a potential destruction of the commercial real estate market as we know it, as commercial landlords walk away from these zombies. 

WHAT REQUIREMENTS MUST A BUILDING MEET TO BE A ZOMBIE?

A building is a “zombie” when its vacancy rates result in  50% or less utilization. A research study done by the Boston Consulting Group found that, on average, vacancy rates have risen 5% and utilization has dropped by 28%. 

WHY ARE OFFICE BUILDINGS BECOMING ZOMBIES? 

A big reason for these empty buildings is the covid-19 pandemic, pushing office workers to hybrid or work-from-home models. It also lead to more short-term lease options; as a result, 60% of office leases are set to expire in the next three years.

ARE THERE ANY OTHER IMPLICATIONS TO A ZOMBIE BUILDING THAN LANDLORDS HAVING A POOR INVESTMENT? 

Although it may seem that the low utilization would be just an issue for the owner(s) – it’s not the case. As zombie buildings have been noted for a time now, experts are starting to see a cycle emerging

Offices are not being rented –> less money spent at surrounding businesses –> less rent revenue for those building owners –> less money for building improvements –> decreases property values & resources –> other businesses that cater to office workers must relocate –> more vacancies –> cities suffer 

This is not a problem for just one group of people or people of a certain tax bracket. Therefore, solutions require the work of owners, city leaders, lenders, and others. It requires collaboration on options for improvements and on how to break the cycle. 

In some cases, there are fears that building owners may owe more than the building is worth, leading to defaults. In February of this year, two office skyscrapers were defaulted on, with 784 million dollars in loans. Faced with loans due and decreasing profit, some investors are electing to give the keys back to the lenders. 

WHERE IS THIS A PROBLEM? 

These buildings are a problem in most major office markets, but typically in markets that have a higher concentration of office buildings than residential and retail; as well as areas whose prevalent industries are able to accommodate work-from-home structures, like tech. 

Some examples of cities hit hard by zombie buildings are: 

Per Investopedia, within the ten largest US markets, more than 50% of office space sat unoccupied in June 2023. This could spell future trouble as leases come up, experts are afraid that the tenants won’t renew & as delinquency levels rise. 

There are also certain buildings more at-risk of becoming zombies. These buildings are specifically older, cubicle office buildings that lack modern amenities or are occupied by industries that do not have to work on site.

HOW TO REDUCE/ELIMINATE ZOMBIE BUILDINGS?

Property managers will have to consider their commercial portfolio and sections of different buildings to determine if they should:  

Many are asking for these zombie commercial buildings to transform into residential units. The National Bureau of Economic Research found that more than 2,000 office buildings in America could be converted into apartments; yielding between 170,000 & 400,000 new apartment units. As the United States is in a housing crisis, these new units could be good to help remedy the situation – especially as the three worst areas for zombie buildings are also ones that have high housing costs and a need for more housing. 

This conversion would also be a more eco-friendly and potentially more economically beneficial option – as it can be cheaper to retrofit buildings and if they were done in a “green” way it could also open up the opportunity for grants

Some other ideas that have been posed for these office buildings include: hotel or hostel conversions, pop-up shops, educational institutions, green spaces or urban farms, art/cultural centers or tech/innovation hubs, amongst others.

OVERALL

Although it may seem that these zombie buildings only affect the corporations that own or manage them, experts believe that the ramifications will be far reaching if no resolution occurs. They believe that over the next three years the number of unoccupied buildings will continue to increase; therefore, it is vital that cities, lenders, and owners get ahead and begin brain-storming ideas to reduce their economic hit and keep the economies of these cities thriving.   

 

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invasive wisconsin plants

Invasive species are detrimental to native ecosystems, by out-competing native species for limited resources. These species can be animals, insects, or plant life. You’ve likely heard about pythons in Florida, wild boars in the south, and carp taking over waterways; meanwhile, the vast majority of invasive plants are more likely to avoid widespread media coverage.

Although invasive plants may avoid media scrutiny, it does not mean they are less of a danger. Invasive plants are categorized as harmful non-native trees, shrubs & herbaceous plants spread through global trade, human/animal transport, and gardening & their entry has negative impacts on the functioning of ecosystems – in ways like: 

There are a few notable invasive Wisconsin plants in the southeastern region that residents should be on the look out for. 

 

FIVE INVASIVE WISCONSIN PLANTS IN SOUTHEASTERN REGION: DESCRIPTION, METHODS OF CONTROL & PICTURES 

 

invasive wisconsin plants - wild parsnip
Photo by Patrick Lynn

WILD PARSNIP

Wild parsnip (Pastinaca sativa) has been documented in Wisconsin since 1900 and is an aggressive member of the carrot family from Europe & Asia. It thrives in areas of high sun and almost any soil type. It’s common in grasslands or near roadsides. The largest issue with this plant, beyond outcompeting native species, is its sap. The sap of the wild parsnip can cause phytophotodermatitis, which is a light reaction; if sap gets on skin that is then exposed to sunlight a rash will appear that can be as mild as reddened skin to as bad as large blisters that may scar. 

WHAT DOES IT LOOK LIKE? 

They’re quite tall around 4 to 5 feet, with large flat clusters of yellow flowers on thick stems 

HOW DOES IT SPREAD?

Spread of this invasive mostly occurs through seed spread, with actions like mowing down mature plants near roadways also spreading the plant 

HOW DO YOU CONTROL/PREVENT IT? 

Prevention is the best method of control, but it can be removed by pulling or cutting the stem from the roots if the infestation is small – otherwise severing the taproot is also a good way to kill the plant. Removal of the plant may be a multi-year process. 

invasive wisconsin plants - garlic mustard
Photo by Wisconsin DNR

GARLIC MUSTARD

Garlic mustard (Alliaria petiolata) is a plant from Europe that was brought over with the early settlers for culinary (some people do still eat it – here’s a recipe) and supposed medicinal qualitites. It is common in forests, savannahs, yards and roadsides – it likes to grow in places that have some shade, avoiding particularly sunny places. It spreads rapidly as it has a very early season, allowing it to out compete other later growers and very quickly it can overtake the undergrowth. 

WHAT DOES IT LOOK LIKE?

The plant grows 12 to 48 inches tall and its leaves/stem smell like onions or garlic when crushed. The plant is a biennial, meaning it takes 2 years to complete its life cycle. In the first year, it will form a rosette of scalloped, magined leaves that stay semi-evergreen. In the second year, it sends up a flower stem with triangular toothed leaves and tiny four-petaled white flowers. It bears up to 500 seeds per plant, before it dies, that can last up to five years. 

HOW DOES IT SPREAD?

It is mostly believed to spread through animals, as seeds grab onto their fur before dropping off in a new location. 

HOW DO YOU CONTROL/PREVENT IT?

If you’re encountering a small patch, you can get rid of it through pulling before they flower or cutting the stem if flowering has started. For larger patches, some decide to burn – however as seeds can last up to five years, it is a long process of removal. 

 

invasive wisconsin plants - reed canary grass
Photo by Wisconsin Wetlands Association

REED CANARY GRASS

Reed Canary Grass (Phalaris arundinacea) is considered by experts to be perhaps one of the worst invasives in Wisconsin. It’s a cool season perennial, making its home in wetlands, floodplains, an dry soil in shaded wooded areas. Once in an area, it quickly overtakes any other foliage through sending out runners. Its dense layer of roots can also constrict waterways and limit tree growth.

WHAT DOES IT LOOK LIKE?

Reed canary grass is 2 to 9 feet tall, with a hairless stem & flat leaf blades that taper and 4-8 inches long. The flowers are in dense clusters of florets that change colors from green, to purple, to golden. 

HOW DOES IT SPREAD?

The grass spreads through seeds dropping or disturbance from waterways, animals, machines or people. However, it also spreads out in the same area through its roots, sending out runners for larger clumps. 

HOW DO YOU CONTROL/PREVENT IT? 

For small patches, it can be pulled, dug or covered for a growing season. For larger areas, mowing can occur three times a season, late spring or late fall burns over 5 to 6 years, or repeatedly tilled for a growing season. There are chemical methods for use as well (although you’ll need to be careful to avoid treating native species). 

 

purple loosestrife
Photo by iNaturalist

PURPLE LOOSESTRIFE

Purple Loosesrife (Lythrum salicaria) is a fast-spreading European plant, first introduced in the 1800s as a perennial garden plant. Although a pretty, purple flowering species – this plant is a menace to Wisconsin’s habitat. The insects and diseases that impact the plant in its native home are not native to Wisconsin, allowing it to remain unchecked. However, since 1994, the Wisconsin DNR has been using four control species to attempt to regulate this invasive. Two Cella beetles have appeared to be the best insects to use in bio-control for the plant, eating its leaves and shoots. Although it does not eradicate the plant, it has done a good job of managing it and allowing native plants a chance to compete. Residents interested in raising and releasing these bio-control beetles can use the following form to apply.

WHAT DOES IT LOOK LIKE? 

The plant grows to a height of 3 to 7 feet on average, but can get as tall as 12 feet in some cases. It lives for many years, becoming more fiborus with age. The leaves are narrow, arranged on opposite sides of the stem with 50 flowering stems that are magenta pink with 5-7 petals. The blooms begin in July and may last all the way until September. 

HOW DOES IT SPREAD?

Purple loosestrife produces more than two million tiny seeds per plant, which spread through water or wind. 

HOW DO YOU CONTROL/PREVENT IT?

You can prevent the continued spread by inspecting any items, machines, clothing, etc. that has come in contact with an infected area. To control a small area, a shovel works well to remove the entire plant and root system. Composting is not advised – as it will not kill the plant. There are also some herbicides for use in larger areas. 

 

 Japanese knotweed
Photo by Kris Olson

JAPANESE KNOTWEED 

Japenes Knotweed (Fallopia japonica) is a perennial from Asia that has gone wide and far across the United States. It appeared in Wisconsin in the mid-1900s and has now been noted in most counties. The plant is aggressive and is quickly spreading into more wild areas, threatening riparian areas. It also is noted to threaten foundations and concrete, when grown in an urban environment. 

WHAT DOES IT LOOK LIKE?

These plants are upright and shrub like, growing up to 10 feet tall, with bamboo like stems. The leaves are about 6 inches long and triangular in shape with pointed tip. The flowers are small, greenish-white and arranged in buches with offshoots. 

HOW DOES IT SPREAD?

The seeds of this plant are spread by wind, water, animals, or humans; however, the plant can also spread through stem fragments or rhizomes. As it has multiple methods of spread, it can be difficult and expensive to combat. 

HOW DO YOU CONTROL/PREVENT IT?

Young plants can be pulled – with speical care to remove any/all rhizomes, as this will produce more plants. This can be difficult with more established plants, as roots can grow down 9 feet and rhizomes out 60 feet from the main plant. It’s possible to eradicate small patches with cutting and pulling, if special attention is taken to ensure all parts of the plant are removed. Larger, more established knotweed will likely require the use of chemical assistance or mass soil removal. 

. . . IS THAT IT?

Unfortunately, there are plenty of other invasive Wisconsin plants in the southeastern area. Therefore, its important that people educate themselves on all the Wisconsin invasive species, to assist in the prevention and control of their spread.

This is a great website resource to learn more about invasive species in Wisconsin and potential control methods. This tool is also a helpful one for identifying any weeds you may encounter that you’re not familiar with. 

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It’s every homeowner’s nightmare, their house crumbling away – but for some, this nightmare is their reality, as sinkholes swallow their homes. 

WHAT ARE SINKHOLES?

Sinkholes are holes in the ground that form when water dissolves the rock on the surface, resulting in a sinking of the ground. Although they can be naturally occurring, there are also actions taken that can cause them to develop, including: 

There have been a few prevalent sinkhole subdivisions in the news in recent years. A few notable include. . . 

SEAWATCH DEVELOPMENT – SECHELT, BC

Seawatch
Photo taken by Christine Wood Photo

Homes Affected: 14 

In Canada, a developer bought a land parcel overlooking Snake Bay with a plan for a 28-lot neighborhood of luxury homes with stellar views. The city’s bylaws required geotechnical reports to be done – which obtain information on the physical properties of soil, to ensure it is viable for the plan. 

In 2006, a report was issued by a geotechnical engineer for the site that documented sinkholes present and set forth a plan for safe construction. Due to this report, the city required that the developer register a restrictive covenant against the title on each of the lots, which would alert prospective buyers to the findings. However, buyers of the lots claimed that this important information was never provided to them at any point. 

Then, in June 2012, the first major sinkhole occurs, and in 2015, one claims its first home. Eventually, on Christmas Day in 2018, another large sinkhole appears and the city performs a report, which proved that continued use of the site could be deadly. On February 7th, 2019, the city tells residents to evacuate the site or face removal. 

The city reports spending $680,000 on ways to remedy the site. One of these reports estimated that a potential repair would cost upwards of $10 million, with no guarantee of success; the city did not move forward with any plan from these investigative efforts. 

Three years after being forced to leave, the state of emergency was liftedhowever, sinkholes were still a problem, and the value of the once million-dollar homes sat at $2, according to local assessments.

Now, the homes sit empty, slowly deteriorating with items destroyed or thrown around and the walls bearing graffiti; this video uploaded 9 months ago shows the current state of the neighborhood, homes, and sinkhole situation. 

HIDEAWAY HILLS – BLACK HAWK, SD

 People in the Hideaway Hills subdivision say the hole is getting bigger.
Photo by Jack Caudhil

Homes Affected: 158 

In April 2020, a sinkhole appeared in the Hideaway Hills neighborhood – swallowing up an entire front yard. Since then, the sinkhole has continued to grow, claiming other homes. The sinkhole’s existence stems from an underground mine, that has caused instability in the ground of the subdivision; this is because the mine was never closed properly and extends beyond its recorded limits. To fix the problem, the houses and infrastructure would have to be removed and the ground supported via filling or putting in supports – before rebuilding. 

The photo below is part of the case, showing where the mining was occurring in comparison where the subdivision was built.

1968 USDA photo showing widespread underground and surface mining by the state of South Dakota, in the Hideaway Hills subdivision, where a collapse happened and a sinkhole opened in 2020. Green markings indicate the location of homes since built above the abandoned mines. Source: Fox Rothschild

The sinkhole has caused structural problems to occur in the evacuated homes, like:

This has decimated property values and made homes unlivable, causing residents to have multiple home payments or face the difficult decision to face foreclosure. 

In September 2022, a South Dakota judge granted the homeowners the ability to bring a class action lawsuit against the state. The suit claims that the state acted recklessly when it did not properly close the state-operated mine. The case is set to take time – if you’d like to follow along with updates, the case name is Andrew Morse and John and Emily Clarke et al. v. State of South Dakota et al. 

LAND O’ LAKES – TAMPA, FL 

Residents of the Lake Padgett Estates community recently weighed in on how to restore Ocean Pines Drive where a massive sinkhole opened on private property last summer. LUIS SANTANA | Times
Photo by Luis Santana

Homes Affected: 7

In July 2017, a sinkhole formed and destroyed two homes; in the following days, five more became unsafe. Florida is a hot spot for sinkholes, due to the limestone in its soil composition – which is soluble. It’s such an issue that there is even an area coined “Sinkhole Alley” in central Florida

Even during the cleanup, which ended up costing around 1.1 million dollars, the sinkhole continued to expand in diameter, by 25 feet

The two main homes had sinkholes previously in 2012. These sinkholes were “remedied” through a process called grouting – where a dozen pipes or more are driven down into the soil with depths reaching 60 feet and then filled with concrete. Evidently, this remediation was not successful and led to an eventual failure that proved catastrophic. 

It is unclear what happened next to remediate the situation this second time – there were talks of connecting it to a nearby lake, creating a turnaround for delivery trucks, and a few other options. As of now, the site appears fenced and vacant (from Google Maps).

ARE SINKHOLES JUST A PROBLEM IN SUBDIVISIONS? 

No, sinkholes can be a problem anywhere – from roadways, to single homes, to fields. The sinkholes in subdivisions threaten more homeowners, which is why you may hear about them. Some recent sinkholes that have occurred outside of subdivisions include. . .

There are countless other sinkhole stories on the Internet and plenty more that never actually hit the news, due to their level of notability.

HOW TO AVOID PURCHASING A HOME WITH SINKHOLE PROBLEMS?

Well, luckily, sinkholes are unlikely to occur in Wisconsin based on the makeup and distribution of the bedrock; however, that’s not to say it can’t or won’t ever happen (as seen in the Hank Aaron State Trail). 

Sinkholes can occur in any area that has krast, which is a landscape that occurs when water dissolves rocks. In Wisconsin, krast is most likely to be found in a “V-shaped swath from St. Croix County, along the Mississippi River across the bottom two tiers of counties, and northeast along Lake Michigan up to Marinette County.” So, if you’re looking to avoid sinkholes as much as possible, you want to avoid buying in a place with krast; to avoid it when buying a home, geology will need to be studied. 

Although, even if you avoid krast, it doesn’t mean you will avoid sinkholes. Sinkholes can also be man-made, which make this variety more random and close to impossible to plan for. 

ARE SINKHOLES BECOMING MORE COMMON?

If you feel like you’ve been hearing about more sinkholes lately, it’s probably because you are; they’re becoming more common and happening more often across the World – mostly due to human causes. 

Human activities do have an impact on sinkholes – as it mostly relates to water, digging, or disturbance of an area. Human activities that lead to sinkhole development include. . . 

As disruptive human activities have increased, there has been an increase in the occurrence of sinkholes.

OVERALL. . .

Sinkholes are a nightmare resulting in high costs, crushed dreams, and lengthy lawsuits to try and find a responsible party. When purchasing homes, especially in areas with high frequencies of sinkholes, buyers must be aware of the potential for them to occur with no warning. In some areas, sinkhole insurance may be available to add to a home insurance policy.  

Unfortunately, there are some things that are a part of home ownership and the potential for sinkholes is one of these things that owners need to be aware is a tragic possibility.

 

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use of AI in real estate

WHAT IS AI?

You’ve undoubtedly heard about it; Artificial Intelligence, commonly shortened to AI, is a hot topic in the news. Essentially, it is the simulation of human intelligence by software, which allows it to. . .

HOW WILL THE USE OF AI IN REAL ESTATE BE?

AI is impacting every industry; real estate is no exception – experts expect to see notable impact. They expect it to alter various areas of real estate, from transactions, to property management, to home ownership.
However, AI is already present in the industry, with data analysis programs providing information to agents, buyers, and sellers. It is a different market than it was around thirty years ago; when realtors were knocking on doors to obtain this information, they can now get it in a few clicks.
Current AI tools are things like Zillow’s Zestimate, tracking home values/sales to calculate an estimated value. As to the accuracy, Zillow states they are always trying to improve it through updates.
Although AI is already present in the realty industry, experts expect further advancements to make some significant changes.

HOW WILL IT AFFECT TRANSACTIONS?

The changes to AI will continue to affect buyers, sellers, and agents in a transaction.

BUYERS

Buyers will benefit from AI due to the increased amount of data and personalization offered to them. For example, AI Learning models will be able to create incredibly personalized searches. It will allow for more natural language searches, like “homes with water feature” rather than using a sqft. It will also promote other homes that buyers are most likely to want based on previous interactions. This will be similar to a website like Amazon, offering other homes based on an original search.

SELLERS

AI will impact sellers by allowing them to consider more data when pricing. They will also benefit from optimized listings, more marketing features like digital tours, and more predictability in decision-making regarding their home sale.

AGENTS

Some agents have already begun utilizing the new AI methods available – the most recognizable being ChatGTP. They use it to write home descriptions, create social media posts, automate responses, calculate numbers, and tweak emails. However, other agents see ChatGTP as a way to lose credibility or an agent’s voice in an industry primarily formed on personal relationships.
Some other ways in which AI is projected to assist agents are: optimizing their listings based on data, predictive analysis, and fraud detection.
Some agents are excited about future AI developments that aid their clients in making more personalized decisions, but that technology is still not here as of today. Other agents are apprehensive about this change. In the past, the real estate industry has been slow in accepting new technologies. So, to what extent or the speed at which the industry will adopt AI is still up-in-the-air.

WHAT OTHER AREAS OF REAL ESTATE WILL IT IMPACT? 

Besides transactions, AI will impact countless other areas of the industry, like:

ARE THERE PROBLEMS WITH ITS USE IN REAL ESTATE? 

There could be. AI has the potential to be useful and good, but it can be an evil force in the hands of unscrupulous or even unsuspecting individuals.
In the past, AI has been accused of discriminatory hiring and lending practices. In 2014, Amazon began to build an AI meant to review applications and help in hiring. The project was scrapped after a year, as the results showed that women applying for more technical jobs were discriminated against. They built the program with resumes of current employees, who were overwhelmingly male, so it searched for resumes that matched their current workforce. Luckily, they caught the discriminatory nature of it before using it on actual applicants.  It found three areas as discriminatory:

APPLICATION TO REAL ESTATE: MORTGAGE LENDING

Mortgage lenders already use software to run applications for a mortgage – called Classic FICO to determine whether an applicant meets the standards to be considered for a conventional loan. This algorithm was created 15 years ago with data from the 90’s and many consider it to be harmful to people of color. This is because it relies heavily on traditional credit, which statistically they have less access to. It also doesn’t consider on-time payments, but late payments will be regarded as harmful and punish people for previous medical debt even after it has been paid. Besides this standard, institutions may also run applicants through their own programs, which are often considered secret and the specific algorithm not public information.

In October 2022, the Federal Housing Finance Authority (FHFA) announced some changes to the Classic FICO to reduce any discrimination [even though it has previously been denied that any prejudice was occurring]. They expect the changes to be fully in place by the end of 2025.
As AI becomes more used in real estate, transparency is critical to show that it is not unfairly discriminating against a protected class. In addition, the algorithm must be constructed in a way that will be fair and not lead to one population getting unfair treatment, either good or bad.

WILL IT REPLACE REAL ESTATE AGENTS?

The answer to this question depends on who you ask. Some believe that AI can absolutely take over for real estate agents, with automated drones taking photos, ChatGPT (or the like) writing descriptions, and self-tours by way of automatic codes.
Others believe that while AI can undoubtedly take over the tasks of real estate agents, it will never completely replace agents – for the following reasons:
Meanwhile, others believe that there can be a happy middle ground, where qualified agents utilize AI tools to better assist their clients in their real estate purchase, sales, and searches.
If you’re looking to see why a good real estate agent is irreplaceable, reach out to one of our qualified agents who can get you started on your own real estate journey!

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The short-term rental: a furnished and self-contained housing unit rented for a short period (less than 30 days), has exploded in popularity in recent years; even the pandemic couldn’t slow its growth. However, recently, the topic of the sustainability and longevity of this industry has emerged. In fact, a hashtag about the phenomenon has been created – #Airbnbust. 

The company most synonymous with short-term rentals is Airbnb. A site where homeowners can put a property online to rent on a short-term basis, even just a night. Originally started as a way to make rent in the expensive San Francisco, the founders of Airbnb originally coined it AirBed & Breakfast, charging $80 for an air bed on their floor to those in town for a convention who couldn’t book a hotel. From there, they had ups and downs with the company, at one point selling election-campaign-themed cereal boxes to fund their start-up. However, in 2009, after entering the New York market and gaining funding, the site took off. In fact, not many will call a short-term rental an Airbnb, even if it’s not listed there. But, recently people have begun to wonder, is Airbnb and the short-term rental market going bust? And if yes, then why? 

OVERSUPPLY? 

Due to the popularity of Airbnb, VRBO, and other short-term rental sites, many saw them as the next big thing to invest in. This has led to some cities having numerous listings, usually in the same area. The pandemic played a role in this, as bookings increased by about 21% in 2021 and another 21% in 2022. These high rates of bookings, coupled with low mortgage rates, resulted in many purchasing additional properties specifically for short-term rentals, with a 19% increase in listings from 2021 to 2022. However, with all the new listings, a reduction in the travel frenzy, and high inflation rates – there has been a correction. 

This oversupply has especially been evident in cities with no short-term rentals regulations. The cities that do have rules and a cap on short-term rentals have not had the oversupply issue, as much. This has led to a continued steady profit for short-term rental owners there, due to less competition. On the flip side, cities with limited regulations on short-term rentals opened up an opportunity for investors that many took advantage of. This large pool of listings, is good for the travelers and no so good for the hosts whose listing are not selected. 

Is Oversupply an Issue? Yes, in many places there are too many listings, creating a highly competitive market for hosts

GOVERNMENT REGULATIONS? 

In terms of government, changes are happening there that are affecting short-term rentals. For example: 

Wisconsin is considered one of the more friendlier states towards short-term rentals; however, that doesn’t mean certain areas haven’t devised regulations or even outright placed bans on short-term rentals. 

Recently, there has been a shift in many communities, whether they desire to keep a community culture, keep neighborhood prices down (for both rentals & purchased properties), reduce the potential for noise, or simply have a personal ideology to push their local municipalities to put a stop to or make new rules for hosts. 

Even if it is not an outright ban on short-term rentals, some of the new rules mean that a host can no longer make a short-term rental feasible, leading to a sale or transition into a longer-term rental. If more municipalities begin to enact short-term regulations, there could be a drop in listings, which may correct some of the oversupply; however, too many regulations may dry up the availability altogether, with hosts having to become long-term landlords or sell out. 

Are Governmental Regulations an Issue? They can be, especially as more neighbors are calling for regulations or outright bans.

DEMAND? 

Despite what social media would have you believe, the demand for short-term rentals is not slowing down. In fact, it keeps going up; in April, it was reported at 10% higher than in 2022, and the booked summer revenue was 14.5% higher. 

This heightened demand is certainly noticeable in the southern states and large urban cities and also vacations abroad, to European getaways.  

Although many post on social media that they are over the short-term rental market due to rising fees and hosts rules for their properties, the numbers don’t appear to reflect that. So, people are simply venting on social media and then still booking, or the amount of people who have sworn off Airbnb is so small that it isn’t going to have a noticeable impact on demand.

Is Demand an Issue? No, people are still booking short-term rentals, no matter what social media states.

SO WHAT’S GOING ON?

The truth is, the #Airbnbust is largely social media overhyping something; short-term rentals have carved a place out in the rental market and are likely here to stay. Although there may be some oversupply and negligible fluctuating demand, more is needed to rock the industry. Currently, the two major threats to it are governmental bodies imposing restrictions and hotels entering the space.

Governmental bodies are hearing from neighbors who are unhappy with the short-term rentals and taking steps to alleviate these concerns. It’s a discussion that pits host against neighbor and is happening around the country. Governments will need to balance both sides, with community members concerns and the money/tourism that these short-term rentals provide. 

Meanwhile, hotels have taken notice of the lure of short-term rentals and have begun to venture into this space. Hotels have the added benefit of commercial laundry, cleaning staff, and on-site concierge service. These three aspects can be shortcomings for the small family-run short-term rental and give the hotels an advantage – alongside the fact that they have more power with governmental bodies and are not often in residential areas. 

HOW WILL THE SHORT-TERM RENTAL HOST MAKE IT?

Although short-term rentals are not “over”, hosts will need to make changes to survive this changing short-term rental industry. These will include things like: 

Short-term rentals are far from over, and parties still have the potential to enter the industry; it will just take more thought and work than listing the property online to turn a profit. 

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WHAT IS AN ACCESSORY DWELLING UNIT?

An Accessory dwelling unit or ADU is a secondary housing unit on a single-family residential lot. There are different types of ADUs, with most falling under the following categories:

1) Detached ADU 

2) Garage/Shed Conversion ADU

3) ADU Above Secondary Structure 

4) Attached ADU

5) Basement Conversion ADU

6) Internal ADU

Although there can be many different types of ADUs, they have some similarities. These include aspects like. . .

 

DRAWBACKS & BENEFITS OF AN ADU?

Like most things, ADUs have their supporters and opposition

The supporters use the following in their defense of the units. . . 

Meanwhile, the opposition’s points against them include:

Some of these opposition points aren’t necessarily 100% accurate, but it is what is said in opposition of expanding ADUs in communities.

 

ARE THEY LEGAL? 

There are illegal, or rather unpermitted ADUs; these occur when additional living space is added without permits to allow extra habitable space. ADU owners that have the necessary permits, have legal ones though as they are fully permitted and follow all relevant zoning rules. 

 

WHO REGULATES ADUS?

ADUs are not regulated by state law, which means municipalities are welcome to establish the defining characteristics and rules for such places. 

Some municipalities have decided to regulate aspects like limiting the number of ADUs per lot, minimum lot size, setback limitations, square footage, aesthetic requirements, parking, etc. 

We recommend contacting your municipality directly if you are interested in potentially building or remodeling a space into an ADU to determine the restrictions or regulations. 

 

DO ADUS ADD VALUE TO YOUR PROPERTY?

An ADU can be value-adding to your property, providing rental revenue or an increase in the appraisal value of a home. Different categories of ADUs can bring different levels of value

 

ARE ADUS A SOLUTION TO THE HOUSING PROBLEM?

ADUs were common before the age of zoning took over, with extra little homes that were more affordable; however, the increase in zoning rules led to a decrease in ADUs. Recently, the housing crisis has pushed forward a new wave of ADUs, especially as rental prices rise. 

California is an excellent example of the increase of ADUs. In the 20th century, California pursued the removal of ADUs — instead preferring a homogenous neighborhood of single families to ADUs and apartments. In 2016, a policy change led to an increase in ADU applicants, and between 2016 and 2021, the number of ADU permits jumped 6,230% in L.A., and the number of ADUs permitted increased by 1,421%.

ADUs may not solve the housing crisis, but they could certainly be an excellent first step for a few reasons: 

OVERALL

Whether you call an ADU a backyard cottage, granny flat, or in-law suite, this form of housing is making a comeback and offering individuals an alternative to typical housing. If you are interested in adding an ADU to your space, we recommend the following steps:

  1. Be sure it is permissible in you municipality
  2. Identify your needs
  3. Evaluate your property
  4. Find a contractor
  5. Choose an ADU Style
  6. Set your budget
  7. Obtain the permits

 

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Trees are an integral part of the environment, providing habitat, cover, cooling effect, and oxygen. However, did you also know that trees benefit homeowners who plant them in their yards? The following 5 points are reasons why homeowners should consider planting another tree, or two, in their yards. 

1) INCREASED PROPERTY VALUE 

Landscaping is a large part of curb appeal, and trees can be a large part of landscaping. They’ve been found to have an impact on property value, with mature trees adding to a property’s value (the percentage can vary from 2 to 15% depending on other factors). The study found that the most significant increase will likely be seen in high-income areas compared to less affluent regions. These mature trees give a real character to the property and can help it to stand out amongst the competition on the market.

2) PRIVACY 

If choosing the proper trees, trees can offer a green screen or natural privacy barrier from neighbors – allowing for visual blocking and a sound barrier. 

3) PREVENT SOIL EROSION AND RUNOFF.

In Lake County, and beyond, runoff and soil erosion can be a real issue with all the water bodies. Although many think these issues are relevant only to developments or agricultural land, this is a misconception.

Storm water management is an essential aspect of urbanization and residential neighborhoods. When rain falls on impervious surfaces, it does not allow the water to be taken into the ground; it then runs into the areas’ streams, creeks, wetlands, lakes, and rivers. This runoff can carry pollutants like nitrogen, phosphorous, metals, and bacteria, to name a few. Although cities typically have storm water management in place to deal with most of these issues, it is vital to be a responsible citizen and attempt to do one’s part in reducing this impact. Trees help to decrease the amount of storm water runoff and pollutants that reach the local waters in a few ways: 

4) ENERGY SAVINGS 

Did you know that trees can help you save money on energy? In fact, properly positioned trees can “reduce a household’s energy consumption for heating and cooling by up to 25%.” Planting trees can quickly become an energy saver with respect to three areas: shading, windbreaks, and dead space. Deciduous trees, or ones that lose their leaves, are ideal for energy conservation as they provide shade during the summer months and minimal cover during the winter; meanwhile, evergreen trees are best for providing a windbreak. But, of course, there are more planting rules than just the type of tree when it comes to getting the most bang for your buck. 

When choosing trees for energy savings, things to keep in mind are insect/disease resistance (especially if planting multiple trees of the same species in one small area), wind tolerance, height and width maturity, and timeline of growing (faster-growing trees are typically weaker than slower growing ones). 

5) HELP LAWN’S ECOSYSTEM 

A healthy lawn needs good soil to thrive, and organic matter and water are a significant part of good soil. Trees provide these two aspects by bringing in rainwater, roots breaking up the ground, and leaf litter providing organic matter. So, by planting trees, soil health will be improved, thereby, improving the overall look of your lawn. 

WHICH TREE? 

Picking out the right tree depends on what you’re looking for, as different trees can provide different benefits, so if you’re looking for privacy barrier, then you’ll want . . . 

However, if shade and cover is what you’re after, you would do better to choose something like. . .

Some individuals just want a colorful backyard, with flowers or fall leaves, which makes the following ideal choices. . .

Meanwhile, for those who want to attract wildlife to their yard, they’ll want to go for a . . .

No matter the reason for planting trees, it’s an important aspect of homeownership to consider. With early spring here, it’s a great time to consider adding a new tree, or two, to the yard. 

 

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