Zillow CEO Spencer Rascoff debunks myths for homebuyers
The future of the housing market looks bright. Zillow estimates that after a 6.6 percent increase of home values last year, 2015 is expected to produce a modest 3 percent. With a more stable playing field and following a year dominated by sellers, this year may prove to be an auspicious time for a new home. But whether you're a first time home-buyer or a seasoned veteran, the rules of the game continue to change.
"Housing is so important and yet so much of it is just founded on folklore and fiction," Zillow CEO Spencer Rascoff said Wednesday on "CBS This Morning."
One myth Rascoff hopes to debunk in his new book "Zillow Talk: The New Rules of Real Estate," is the misconception that buying the worst home in the best neighborhood is always the best bet. "Location, location, location," may be the number one mantra for real estate agents, but it's not as simple as one catch phase.
"The data just doesn't bear that out," Rascoff said.
Choosing an ideal neighborhood is important nonetheless, and predicting the viability of a neighborhood may be even more so.
Rascoff said finding an up-and-coming neighborhood is one way to ensure a positive return on investment -- and coffee shops may be the key.
"Homes near Starbucks over the last 17 years have appreciated at 96 percent. Homes near Dunkin' Donuts at 80 percent," Rascoff said. "Is it that Starbucks is really great at picking locations, which is certainly part of it, or is it that Starbucks is sort of an omen of gentrification and of other urban renewal around that property? It's a little of each."
Remodeling comes with its own set of curve balls. Many homeowners believe remodeling a kitchen should be first on the list of renovations, but Rascoff said that's not the case.
"If you want to earn a return on your remodeling, the data just says you should not remodel your kitchen. What you should do instead is you should remodel a bathroom. Everybody needs a bathroom," Rascoff said.
Homeowners may need a kitchen just the same, but Rascoff said buyers are often particular with their kitchen tastes.
"If you remodel a kitchen in a very nice way, that may be lost on a potential buyer. If you're just focused on return in investment, a low end bathroom remodel or adding a story," Rascoff said.
While an extra level can garner positive return on investment, remodeling a basement, Rascoff said, doesn't pay out.
When it comes time to sell and submit a listing, there are certain words that won't attract potential buyers. According to Rascoff, "unique" translates to "not for everyone," TLC means "probably a mess" and "nice" -- "not so nice."
Words like "landscaped," "captivating" and "luxurious," on the other hand, are eye-catchers.