Six Home Improvement Projects You Should Do this Summer

A new walkway can improve your home's curb appeal. Credit: Cathy Knapp

If you’re a weekend warrior who’s waited all winter to spruce up your home, now is the time to get those improvements underway. Whether you’ve got an indoor project on your agenda, or an outdoor undertaking in mind that you know will improve your curb appeal and property value, there’s no time like the present.

But with so many options and a limited amount of time — not to mention daylight — where do you begin? We asked local South Orange, Maplewood and Millburn realtors for their suggestions on which home improvements are ideal for this season. Here’s what they said:

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1. Painting: Inside & Out

“Interior painting of current desirable colors in grey tones would be one of the best investments,” Robert Northfield of Keller Williams Realty advises. “Upgrading or renovating the kitchen would be also a good move. Stone counters, new appliances, and fresh coat of paint would go a long way.”

Northfield adds some of the best and most rewarding changes you make to your home’s exterior are landscaping and a paint job to “enhance the look and highlight the details of the home.”

2. The Patio: A Backyard Oasis 

Speaking of the outdoors, Caroline Gosselin, head of the Gosselin Group at Prominent Properties Sotheby’s International Realty, has some recommendations for making the most of your exterior space.

“This time of year I am all about doing things that keep you outside and enjoying the weather,” Gosselin says. “Fixing up a nice a backyard patio can be one of the best DIY home improvement projects. It allows you to have your own little relaxing oasis right in your backyard. It is great for entertaining, and upon resale, it makes an impact to buyers who can see themselves enjoying that space.”

Gosselin adds that great places to get many low-cost design ideas and

3.  Pest Prevention: Creating a Bug-Free Zone

Vanessa Pollock of Keller Williams Midtown Direct Realty suggests establishing a bug-free zone so you can enjoy your outdoor space to the fullest.

“After the winter we’ve had, we all need as much outdoor time as possible, but the mosquitos are already trying to ruin the warm weather for us all,” she says. “If you have a patio or deck though, you have a great foundation for a fun and bug-free zone: put a tent on your deck!  Yes, that’s what I said – a tent on the deck!  A mesh-sided, tall tent with lanterns, battery operated, of course, inside with some lounge chairs will make a perfect bug-free hang!”

A tent can help create a bug-free zone in your backyard. Credit: David Ellis Canvas Products

Vanessa shares additional ideas for creating the perfect pest-free area in her blog.

4. Clean the Windows & Enjoy the View

If you want to get a clear view of your new-and-improved outdoor space, cleaning your windows will do the trick. Plus, it’s a perfect way to brighten up your place, says Allison Ziefert of Keller Williams Midtown Direct Realty.

“You’d be surprised how many people go years without doing this and it makes a big difference,” she notes. “Once the project is finished you might be asking yourself, ‘Who turned the lights on in here?’ It’s a good DIY project or you can hire a local company to handle the job for you. It’s usually costs about $6 to $7 per window.”

5. Declutter: From Top to Bottom

Tina Chen Erway of Towne Realty Group says aside from the usual exterior painting and minor kitchen and bathroom renovations, a good summertime home improvement project is “decluttering” your house.

“You can start from the attic and move down to the basement and, of course, tackle the garage mess too,” she advises. “You can even hold a garage sale to make your effort worthwhile.  It is not a fun thing to do, but the rewards are huge.”

6. A New Walkway Adds Curb Appeal

Cathy Knapp of Towne Realty Group says one of the most important parts of the marketing of a home is its curb appeal.

“Especially if a seller has owned the home a long time, a new walkway adds enormous appeal and freshens up the whole front of the home. It also shows the prospective buyer that the seller maintains all parts of the home,” she says.

Though summer is often all about relaxing, these six home improvement projects can help you make the most of your indoor and outdoor space, increasing your enjoyment as well as your home’s value.

Masters’ future under a cloud under new CEO

Home improvement sales rose 19.8 per cent in the fourth quarter to date, with Masters sales up 17.7 per cent.

The future of Woolworths’ $3 billion home improvement business is under a cloud after its chief architect and biggest supporter Grant O’Brien announced plans to retire as chief executive, leaving the door open for his successor to convince the board to pull the plug.

Mr O’Brien reaffirmed Woolworths’ commitment to the Masters and Home Timber and Hardware chains a month ago, saying the rationale for entering the $45 billion home-improvement market was just as valid today as it was in 2009, when Woolworths unveiled plans to take on market leader Bunnings by opening a chain of big-box hardware stores.

The business is draining about $400 million in cash from the company each year.

Credit Suisse analyst Grant Saligari
Mr O’Brien and chairman Ralph Waters defended the strategy again on Wednesday, saying Masters will eventually deliver value for Woolworths shareholders.

Woolworths Masters chain is losing $200 million a year and is not expected to break even until 2019.
Woolworths Masters chain is losing $200 million a year and is not expected to break even until 2019. Photo: Glenn Hunt
However, Mr Waters conceded that a new chief executive would be free to review all aspects of Woolworths’ strategy, including portfolio investments such as Masters and the underperforming BIG W chain.


“In the fullness of time a new CEO will get to understand what is trying to be achieved with Masters and how much progress has been made and will come to his own conclusions,” Mr Waters said.

“In Australia there is a great urgency for returns we don’t notice overseas. Our overseas partner (Lowe’s) is very comfortable with the time it will take to turn this into a long-term profitable business,” he said.

“We think in the fullness of time we will have an extremely viable home-improvement business under the Masters chain. It requires patience and it requires patient capital.”

Woolworths has invested more than $2 billion into home improvement and its US joint venture partner Lowe’s $1 billion, taking their total investment to date to $3.07 billion.

Racked up losses
However, the business has racked up losses of $500 million over the past three years and is not expected to break even until 2019 or 2020.

Lowe’s has a put option to sell its 33 per cent stake to Woolworths after October 2016.

Woolworths hired a British-based hardware expert, Matt Tyson, to run the business 16 months ago and has been tweaking the Masters strategy, adding new products and changing store layouts to boost sales.

Woolworths is also reducing the capital allocated to Masters by $600 million over the next three years and plans to open only four new Masters stores a year, compared with 10 to 15 previously.

“We have a very clear plan and Matt has a very clear plan and that’s got to be given time to prove the concept,” Mr O’Brien said. “The early signs are good.”

Home-improvement sales rose 19.8 per cent in the fourth quarter to date, with Masters sales up 17.7 per cent. However, Masters sales per store are less than $18 million a year, well below the $30 million analysts estimate is needed to break even.

“The business is draining about $400 million in cash from the company each year,” Credit Suisse analyst Grant Saligari said.

Analysts and investors believe the 50-store Masters chain would be attractive to private equity buyers, which could merge it with rivals such as Metcash’s Mitre 10.

In a report in April, Citigroup analyst Craig Woolford estimated it would cost Woolworths $1.6 billion to exit Masters, including the cost of clearing inventory, exiting leases and buying the Lowe’s put option. However, Woolworths stood to recoup at least $700 million and as much as $970 million selling sites and stock, so the net loss would be between $300 million and $900 million.

House Value Jumping? Save Your Home Improvement Receipts

A tax time bomb is ticking for an increasing number of people who have been lucky enough to see big gains in the values of their homes.

This is especially true in and around cities like New York, Los Angeles, San Francisco, Boston and San Diego, where home prices have increased smartly over the last decade or two. There, single homeowners with gains of over $250,000 and married people who have notched at least $500,000 could end up paying federal tax of as much as 23.8 percent on real estate gains over those amounts when they sell. Additional state taxes loom for some of them as well.

If you are in this situation or think you may be just when you need those gains to live on in your old age, there is a small pile of paperwork you need to start filing away now and keep until you sell the home. That paperwork is for all the improvements you have made to your home. The cost of those improvements counts against the gain. Even a single remodeling can offset the gains by well into the six figures.

Just how many people might this tax affect? I asked the number crunchers at the real estate website Zillow to take a look. Currently, they believe that 3.8 percent of the homes around the country are already in the tax zone for single people and that 1.2 percent have reached the threshold for married couples. The number of people affected is much higher, however, in expensive cities. In San Francisco, for instance, a quarter of all homes have a gain of over $250,000, thus having a tax impact on any single owners. More than one-third of the homes in San Jose, Calif., do, too.

For married people, the numbers become more frightening when you assume a 3.5 percent annual increase in home prices and look ahead 10 years. By then, 15.9 percent of the homes in the New York City area could be in for a tax bill if they’re owned by married people, along with 19.6 percent of the homes in Los Angeles.

Those numbers could be higher if real estate prices rise more quickly. They could also be lower, given that Zillow, in its projections, assumed that the homeowners were not moving to other houses or making improvements in that period. Their tax bills might also be higher if, like many people, they failed to realize that they should be keeping their receipts and closely tracking this potential tax.

Now that you are no longer among the uninformed, however, where should you start with the record-keeping extravaganza, in case you find yourself among those with outsize gains on your home?

The bible for all of this is Internal Revenue Service Publication 523: Selling Your Home. On page 12, you will find the I.R.S.-approved list of things that you can, in effect, subtract from your gain before you determine whether it’s below or above the $250,000/$500,000 limit. Homeowners usually pay no capital gains taxes on any amount below those numbers. Also, you generally have to have been living in the home for at least two of the previous five years before the sale to receive the waiver on the taxes if you are below those thresholds.

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Housing Gains, With a Possible Cost

Capital gains from the sale of a home are currently tax-free up to $250,000 for individuals and $500,000 for couples in most instances. But 10 years from now, many homeowners will have gains that exceed the tax-free threshold, assuming annual growth in prices of 3.5 percent and no further improvements to the property.

Share of homeowners with capital gains

exceeding the tax-free threshold














Los Angeles



New York



San Diego



San Francisco



San Jose, Calif.



Stamford, Conn.



On that list in Publication 523, you will find improvements and additions of all sorts, including decks and patios; landscaping, including sprinkler systems; pools; a new roof or siding; insulation; and kitchen remodeling. Some smaller and perhaps surprising things are there, too: installation of utility services, which could include any fiber charges from Verizon for FiOS or money you paid to the person who hard-wired your Apple TV to your cable modem. Each additional electrical outlet should count, too. Also, you can add in many legal, title and recording fees (plus transfer and certain other taxes) from your closing.

Repairs don’t count, and this gets tricky. Most people have to paint, so that’s generally a repair. Refinishing wood floors is maintenance, too, though installing new ones is an improvement that ought to count in your total.

Built your house from the ground up? Your list includes the cost of the land, all materials and any money you paid to contractors and their laborers plus architect fees. If you swung a hammer yourself, tough luck: Your hard work counts for nothing in the eyes of the eyes of the I.R.S. Ditto your friends who pushed up walls in exchange for pizza and beer.

If you live in a condominium or cooperative building or a community with homeowners’ association fees, some of your monthly charges and many of your special assessments may also count. Ask the managing agent about this, and require the building or community’s accountant to offer this per capita figure each year in a format that allows you to file it away and keep it.

The catch here is that you need receipts for every one of these things. Nobody tells you this at the closing table. Or if they do, you don’t hear it because you’re freaking out about the cost of your home or too excited to go check out tile samples after signing 100 closing documents. Sober-minded individuals tend not to consider the possibility of a big gain at some later date, either. After all, you’re not supposed to think of a home as an investment, even if the I.R.S. does in this particular context.

But you do need to keep the paperwork, long after you have discarded your older tax returns. The website even reminds us all that certain thermal receipts will fade away over time. It’s best to photocopy them or take digital photos and put them away somewhere in the cloud.

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Is It Better to Rent or Buy?

The choice between buying a home and renting one is among the biggest financial decisions that many adults make.

Because we are talking about taxes here, there will be exceptions, carveouts and exceptions to the carveouts issued in I.R.S. private letter rulings and whatnot. If you fall into any of the following categories, it’s probably best to consult a tax professional: widows or widowers, members of the military, newly remarried couples who already have homes, people who have moved for job transfers, nursing home residents who have kept the homes they used to live in, people who sold a home before 1997 and rolled their capital gain over into the home they live in now and people who rebuilt after a fire, flood or other similar event.

Ditto if you inherited the home or got it as a gift and also if you rented it out at any point or used it for business. People who received the first-time home buyer’s credit in 2008 should also dig deeper.

A few other quirks that can help or hurt. If you have a capital loss in your past, you can use it to offset the gain you may receive from your home.Jean-Luc Bourdon, a certified public accountant with a personal finance specialization at BrightPath Wealth Planning in Santa Barbara, Calif., told me about a client who panicked in 2008 and sold investments at a large loss. Later, when he sold his home for a large gain, he was able to offset the gain with the losses he took in the stock market.

Eva Rosenberg, an enrolled agent who maintains the site, warns of a common problem she sees in states like New York and California, where prices have risen a fair bit. People borrow against their homes, spending the money and draining the equity. Then, when they sell and receive, say, $50,000 after repaying their mortgage and home equity loans, they think that’s their capital gain. But it isn’t, and sometimes their tax bill is actually much higher than that $50,000.

So could the rules change, or might lawmakers at least index the $250,000 and $500,000 figures to inflation? It could happen, most likely in a Republican administration. But it’s the sort of thing that only benefits the truly lucky.

I was tempted to use the word rich in the previous sentence, but Mr. Bourdon told me not to. “It isn’t true anymore,” he said. “If you’ve owned nearly any home here in Santa Barbara long enough, you could have a taxable gain on your home.”

If nothing else changes, his assessment will be increasingly accurate in many other areas of the country as well.

Some Homeowners Go Solo to Sell Their Real Estate


Verley Platt, a 72-year-old Philadelphian, decided to go solo. In April, she listed her stone Colonial home—sans real-estate agent—for $1.1 million.

A quick sale at asking price, she figured, could save her $66,000 in agent commissions—worth all the hard work. “That’s a lot to spend for someone else to sell your house,” says Ms. Platt, who runs an online business selling hats to cancer patients.

In the past few years, more luxury homeowners like Ms. Platt have taken the “for sale by owner,” or FSBO, route, according to data from real-estate website Zillow. In April, 3.5% of high-end listings—defined as the top 5% priciest homes in their respective cities—were listed by the owners, almost double the percentage in April 2012, but still a small segment of the overall market.


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High-end homeowners, emboldened by a rebounding luxury market, now have digital tools that help with posting and marketing their properties. Sellers can place free listings on websites like Zillow and Trulia or pay to list on sites like and, which will place their properties on the Multiple Listing Service, a collection of local databases managed by real-estate professionals.

“Sellers believe when there is a lot of activity, it’s easier to sell houses, and when it’s easier to sell a house, then certainly you’re less likely to need the assistance of an agent,” says Eddie Tyner, general manager of Chicago-based

Still, the do-it-yourself approach is far from a sure thing. With her $1,000 investment, Ms. Platt created a website, had professional photographs taken, bought a book on staging, and radically decluttered and depersonalized her home. She also specified that showings would only be for buyers preapproved for financing and hosted a broker’s open house.

The house got zero offers the first month. In May, Ms. Platt hired an agent, which had been part of her plan if her house didn’t sell quickly. The agent added flowers and colorful throws for the sofa to perk up the interiors. New professional photos were taken. The agent then posted the home on MLS.

Verley Platt’s Colonial home in Philadelphia.ENLARGE
Verley Platt’s Colonial home in Philadelphia. PHOTO: WILL FIGG FOR THE WALL STREET JOURNAL

Within a week, Ms. Platt’s house had more showings than it did in the previous month. She is now in discussions with a prospective buyer.

Looking back, Ms. Platt says she underestimated how long it would take to sell her home.

In a 2014 survey of home sellers by the National Association of Realtors, a trade group that represents agents, 47% of homeowners who decided to forego listing through an agent did so to avoid paying a fee or commission—typically 6%, split between the listing and buyer’s agents. The survey also indicates that homes listed by owners sell at a lower price than agent-brokered sales.

“To expose [a luxury home] properly to the correct pool of buyers, you need a broker who has contact with those people to disseminate the information appropriately and correctly,” says Stan Smith of Teles Properties, a Beverly Hills, Calif.-based brokerage.

The for-sale-by-owner market is a small slice of the real-estate pie. Only 9% of sales at all price points took place without an agent in 2014—a number that hasn’t budged since 2012 and is down from 14% a decade earlier, according to the NAR survey. And only 2% of sellers first tried to sell their homes solo before using an agent, the survey found.

Sellers with multimillion-dollar properties are among those likely to want to control the process. “Owners of those properties tend to be professionals—lawyers, as an example—and they feel well-equipped to handle and self-manage their own sale,” says Steve Udelson, president of online real estate for Altisource, the company behind, a FSBO listings website.

In terms of Web traffic, had almost 2 million unique visitors in April and had 189,000, according to comScore, an Internet analytics company. (Mr. Udelson says the number was closer to 319,000.)

By comparison, real-estate website Zillow had 55.2 million unique visitors in April.—which pulls listings from 800 MLS’s but does not let individual homeowners advertise their homes without an agent—followed with 33.8 million unique visitors. No. 3 Trulia had 29.6 million unique visitors, the comScore data show. ( News Corp, owner of The Wall Street Journal, owns Move Inc., which operates and mobile products for NAR.)

Mr. Udelson says more sellers have embraced the “quasi-FSBO” approach: They skip the listing agent but pay a commission—often 3%—to the agent who brings the buyer.

Commercial Real Estate Forecast After The Fed Tightens

Investment real estate has been generally appreciating in this environment of expanding economic activity and low interest rates, but what will happen when the Fed tightens?  Commercial investors should be fine for the first and second year of Fed tightening. After that, look for sluggish returns.

Real estate investment trust prices have dipped the last few months, probably on expectations of rising interest rates on commercial mortgages. On the positive side, total returns for investment real estate, which include both operating earnings and price appreciation, have averaged 13 percent over the past four quarters, based on the properties surveyed by National Council of Real Estate Fiduciaries.

Office vacancies continue to decline gradually, as do retail vacancies. Loan default rates on such properties continue to be low. Hotels are doing well, with average revenue per room up by 6.4 percent in the past year.


In short, this current environment of moderate economic growth (excluding the first quarter) and low interest rates has been positive for commercial real estate investors. The graduated improvement in vacancy has delayed new projects, so competition is not too strong.

Higher interest rates are always feared by commercial real estate investors, but it is important to understand why interest rates would rise. If a malevolent pixie scattered monetary tightening dust, then real estate values would fall. Today’s value of a property is the discounted value of future earnings, and higher interest rates discount those earnings by a greater amount. Another way to think of it is that many purchases don’t work with higher interest rates.

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However, the Federal Reserve is hardly an evil pixie. The Fed will raise interest rates only when they see further strength in the overall economy. That strength in the economy will boost occupancy and rents, improving operating earnings. In the early stages of Fed tightening, the stronger economy dominates. In two years or so, the slowdown in the economy combines with the higher discount rates to hurt commercial real estate.

Although the Fed can peg short-term interest rates, such as the one-year treasury, it has less control over longer-term interest rates. The 10-year bond, for example, is driven more by global demand for credit and supply of savings than by Fed policy. Thus, it may not be Fed policy that pushes up commercial mortgage rates.

Commercial investors will most likely see good total returns in the next two years, but it’s worth considering what could go wrong. International recession, originating in Europe or China, could trigger a downturn in the United States, ruining occupancy and rents in 2016. Looking farther ahead, if the Fed’s tightening proves to be too much, too soon, then a recession would begin in 2017, most likely. Thus, the positive returns that are the best forecast right now are not guaranteed. And if you didn’t know that already, you have no business investing in real estate.

Macy’s Real Estate Has Shareholders Salivating

A string of recent deals has resurrected an old investment idea: that much of the value in retail lies in the bricks and mortar.

The most recent came Monday when Hudson’s Bay Co. agreed to acquire the German department store chain Galeria Kaufhof for about $2.7 billion. That price was almost entirely covered by a side deal in which Hudson’s Bay will sell at least 40 of Kaufhof’s best stores to a joint venture with mall operator Simon Property Group.

Eyes are now turning to Macy’s Inc., which owns some of the world’s most valuable property and is being urged by investors to unlock that value. The company is wrestling with how to structure a deal without giving up control of the properties or saddling itself with expensive lease payments.


Estimated values of three of Macy’s flagships, according to Buckingham Research Group

  • Herald Square, New York: $4.34 billion
  • State Street, Chicago: $1.74 billion
  • Union Square, San Francisco: $740 million

For Macy’s investors, the short-term benefits of a deal could be considerable. The chain owned or had ground leases on more than two-thirds of its 823 department stores as of Jan. 31. Its three flagships in New York, Chicago and San Francisco are valued at nearly $7 billion, according to a report from Buckingham Research Group, equal to almost a third of Macy’s market value.

The typical solution is to sell the stores to a property company and then lease back the space. Macy’s executives have weighed the pros and cons of such deals over the years, but didn’t want to give up flexibility or burden the company with debt-like lease obligations, people familiar with the situation said.