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MONEY

6 Acronyms Every Beginner Real Estate Investor Should Know

H-O-M-E letters in wooden blocks
Image Source—Getty Images

Pretty much every time you learn something new, you also learn a whole new vocabulary to go along with it. Real estate investing is no different. Real estate investors must understand the terms and investment vocabulary. Here are some definitions of common acronyms to get you started:

1. PITI

Principal (P), Interest (I), property Taxes (T) and Insurance (I). This is basically the “bottom line” or the minimum you need to calculate when thinking about purchasing an investment property with a loan. Usually it is calculated overall and on a month-to-month basis.

The overall number is what you would potentially spend on the property over the life of the loan. Month-to-month is the portion of PITI you have to pay each month to stay in good standing. This information will help determine how much rent you should charge.

Related: Trying to Choose The Right Loan? Stop Looking at Just The Rates!

2. LTV

Loan-to-Value, also important if you’re taking out a loan on your investment property, is calculated by dividing the loan by the property’s value, then expressing that as a percentage. For example, if the loan is $200,000 and the value of the property is $250,000, the LTV is 80%.

The lower the LTV, the more equity you have in the property, which means you have more room to negotiate should you decide to sell.

3. GOI

Gross Operating Income is the actual annual income collected from the property, which includes all sources of income (laundry, parking, storage, etc.) and takes into account any vacancies.

4. NOI

Net Operating Income is the income left over from your rents after paying all your monthly operating expenses. So, subtract your expenses from your GOI to get you the property’s NOI. For example, if you take in $10,000 in rents on all the units and spent $8,000 on maintenance, janitorial duties, supplies, accounting, insurance, taxes, and utilities, your NOI for the month was $2,000.

5. DCR

Debt Coverage Ratio is a term commonly used by lenders in underwriting loans for income-generating properties. It’s calculated by dividing the NOI by the total debt. Ratios of 1.20 and higher are considered average.

Related: Understanding Debt Service Coverage Ratio

6. CCR

Conditions, Covenants, and Restrictions are promises written into contracts where the parties agree to perform, or not perform, certain actions.

CCRs can occur in several contexts. There can be CCRs written into a deed when you purchase a property. Also, your tenants could sign a rental agreement in which they agree to certain conditions (such as “no pets allowed” and “you can live here as long as you pay rent, otherwise we can evict you”).

I’m sorry to disappoint you on that last one. CCR on the radio is much more exciting than the real estate investing version of CCR. But it’s an important term, so I hope I’m forgiven. Either way, I hope the acronyms listed above will help you in your quest to invest in real estate.

More from BiggerPockets:
10 Things I Hate About Working From Home
10 Rules For Investing in Real Estate Without Looking Like an Idiot
6 Tips to Turn Bad Tenants Into Amazing Tenants

This article originally appeared on BiggerPockets, the real estate investing social network. © 2014 BiggerPockets Inc.

TIME Economy

Millennial-Driven Housing Boom Could Be On The Way

A new study says as the economy improves many millennials could soon be leaving home — causing a housing boom within the next decade.

+ READ ARTICLE

Young adults, so-called “millennials,” have been pushed by the recession to live with their parents into adulthood–but they really want to move out, according to a study by Harvard’s Joint Center for Housing Studies. That study found that millennials could form 24 million new households by 2025.

Three main factors have been holding millennials back from moving out, said the Harvard study: A weak job market for recent graduates, high debt from student loans and tightened lending standards.

The report also found that the number of young people who buy homes increases as their incomes grow. As and the economy improves, millennials–which the study defined as those born between the years of 1985 and 2004–will make decisions about their living arrangements that will, by extension, affect the economy.

But don’t foresee a mass exodus from parents’ homes, the authors said. Millennials will probably just trickle out of their parents’ nest in what would look like a steady, slow recovery.

 

 

MONEY mortgages

30-year Mortgage Rates Edge Down For Second Straight Week

Mortgage rates declined slightly over the past week.

Average rates notched down slightly to 4.14% with an average of 0.5 points, down from last week’s 4.17%, according to Freddie Mac. A year ago, rates on 30-year mortgages were 4.46%.

The rate on an average 15-year mortgage was 3.22% with 0.5 points, down from 3.50% a year ago. For adjustable rate mortgages, a five-year ARM this week averaged 2.98% with 0.3 points and a one-year ARM averaged 2.40% with 0.4 points.

image (4)
Source: Freddie Mac survey.

 

MONEY buying a home

5 Reasons the Highest Offer Won’t Always Get You the House

140626_REA_5reasons_1
iStock—iStock

Conventional home buying wisdom says that whomever throws the most money at the seller will snag the house. That’s not always true! Here's why.

When it comes to buying a house, the highest priced offer gets the house…right? Not always! Sure, a hefty sum on an offer is the first thing that every seller wants to see, but any good real estate agent will advise their seller that each offer is a sum of its parts.

Here are five reasons why you may just beat that higher offer:

  1. Cash Is King

    If you can buy with all cash, you will likely win out over a higher-priced offer. According to RealtyTrac’s latest data, 43% of all home sales in 2014 have been all-cash deals. Savvy sellers know the benefits of an all-cash buyer: there is no issue involving mortgages and lenders, the escrow closes faster, and there is no appraisal to worry about.

  2. The Next Best Thing: A Pre-Approval Letter

    A pre-approval letter is the confirmation from your mortgage broker or bank that you’re ready to buy in a set price range and have been pre-approved for the loan. In essence, the pre-approval letter turns you into a virtual cash buyer, as mortgages are harder to come by these days. Someone may be offering to pay more, but if they are not pre-approved, you will have the leg up, even at a slightly lower price.

  3. Timeline Flexibility

    Closing is generally 30, 45, 60, or 90 days. Customizing the length to suit the seller’s needs can often seal the deal over a higher priced offer. A seller generally wants a fast closing. If you have all your ducks in a row, you may be able to pull off 30 days. But what if the house they are moving to won’t be ready for 60 days? They’ll need more time. Find out what they need, and then give it to them. I’ve seen many lower offers win using this tactic.

  4. The “Please Let Me Buy Your House” Letter

    I know, I know, you are thinking this is soooo cheesy. However, a friend of mine had three similar offers on the table when he was selling his house. Two of the offers came with very heartfelt letters.

    Related: Wanna Win a Bidding War? Write a Letter That’ll Crush the Competition

    He was actually put off by the buyer who didn’t send a letter because the others did and it made a huge impact—and he sold to one of the letter-writers, even though it was a slightly lower-priced offer than the non-letter writer. Writing a letter may not get you the deal, but if you are the one offer that doesn’t put pen to paper, it could lose it.

  5. Don’t Overload On Contingencies

    Contingencies are negotiating tools that give you an opportunity to walk away without consequence. The most common: the inspection, the financing, and the appraisal. However, every contingency you add makes your offer weaker, because it makes it that much harder to close the deal. Make sure you really need them before building them into your offer.

Here are’s some more details on specific contingencies and how to handle each:

    • Contingent Upon Inspection – I have heard other experts give you the “tip” to forgo the inspection contingency to make your offer more attractive. Here’s my advice: NEVER give up this one. After your inspection, you give the seller your list of problems, current and potential, along with the opportunity to fix them, adjust the price, or give you a credit back. If the seller does not agree to any of your requests, you can walk. You take a huge risk if you waive this. A much better option: offer to do the inspection in the first few days after opening escrow and to give a response to the inspection results within a few days.
    • Contingent Upon Financing – Don’t omit this one either, unless of course you are paying all cash. With most 30-to-45 day closings, you will usually have 17-to-21 days to get your mortgage approval. Having that pre-approval letter will make this finance contingency less of an issue for your seller.
    • Contingent Upon Appraisal – It’s very possible that the house may not appraise for what you have offered to pay. However, if you have done your homework, analyzed the comps of the neighborhood, and are comfortable with the price you have offered, then consider waiving this one. The risk is that you will have to come up with any difference between the appraised value and the negotiated sales price. Waiving this contingency really gives you a leg up over the competition, especially in a hot market where the seller is trying to get top dollar.

More from Trulia:
Style Your Vacation Home With Tips from Homepolish
8 Ways to Screw Up Your Home Sale
International House Hunters Shift to Urban Neighborhoods

Michael Corbett is Trulia‘s real estate and lifestyle expert. He hosts NBC’s EXTRA’s Mansions and Millionaires and has authored three books on real estate, including Before You Buy!

MONEY Housing Market

Housing Market Recovery Moving Forward, Except for This One Thing

For the first time during the housing recovery, four out of five of Trulia's Housing Barometer measures are at least halfway back to normal. But young adults are still struggling to get jobs.

How We Track This Uneven Recovery
Since February 2012, Trulia’s Housing Barometer has charted how quickly the housing market is moving back to “normal” based on multiple indicators. Because the recovery is uneven, with some housing activities improving faster than others, our Barometer highlights five measures:

  1. Home-price levels relative to fundamentals (Trulia Bubble Watch)
  2. Delinquency + foreclosure rate (Black Knight, formerly LPS)
  3. Existing home sales, excluding distressed sales (National Association of Realtors, NAR)
  4. New construction starts (Census)
  5. The employment rate for 25-34 year-olds, a key age group for household formation and first-time homeownership (Bureau of Labor Statistics, BLS)

The first measure, home prices from our Bubble Watch, is a quarterly report. The other four measures are reported monthly; to reduce volatility, however, we use three-month moving averages for these measures. For each indicator, we compare the latest available data to (1) its worst reading for that indicator during the housing bust and (2) its pre-bubble “normal” level.

4 Out of 5 Measures Improve and Are At Least Halfway Home
All but one of the Housing Barometer’s five indicators have improved since last quarter, and all five have improved or remained steady since last year. Prices and the delinquency + foreclosure rate made the biggest strides:

Housing Indicators: How Far Back to Normal?
Now One quarter ago One year ago
Home price level 79% 68% 44%
Delinquency + foreclosure rate 74% 63% 53%
Existing home sales, excl. distressed 64% 61% 64%
New construction starts 50% 45% 41%
Employment rate, 25-34 year-olds 35% 39% 30%
For each indicator, we compare the latest available data to (1) its worst reading for that indicator during the housing bust and (2) its pre-bubble “normal” level.
  • Home prices continue to climb, though at a slower rate. Trulia’s Bubble Watch shows prices were 3% undervalued in 2014 Q2, compared with 15% at the worst of the housing bust; that means prices are nearly four-fifths (79%) of the way back to their “normal” level of being neither over- nor under-valued. Even better, as prices approach normal, price gains are slowing down and becoming more sustainable: for the first time in almost two years, no local market has had price gains of more than 20% year-over-year.
  • The delinquency + foreclosure rate was 74% back to normal in May, up from 63% one quarter ago. While fewer foreclosures means fewer discounted homes for sale, delinquencies and foreclosures have caused great pain for millions of households and the financial system. For the foreclosure crisis, the light at the end of the tunnel is getting brighter.
  • Existing home sales (excluding distressed) were 64% back to normal in May, up from 61% one quarter earlier. Distressed sales have plummeted as the foreclosure inventory has dried up. Non-distressed sales also stumbled from their peak last summer as higher home prices and mortgage rates reduced affordability, but in the past quarter non-distressed sales have resumed their climb.
  • New construction starts are 50% back to normal, up from 45% one quarter ago and 41% one year ago. Multi-unit starts — mostly apartment buildings — are leading the recovery: in 2014 so far, multi-unit starts accounted for 35% of all new home starts, the highest annual level in 40 years. This apartment boom started last year, and last year’s starts are now being completed, which is increasing the supply of apartments for rent.
  • Employment for young adults, however, took a step back. May’s three-month moving average shows that 75.6% of adults age 25-34 are employed, which is just 35% of the way back to normal. That’s down from 39% one quarter ago, though still an improvement from one year ago. Because young adults need jobs in order to move out of their parents’ homes, form their own households, and eventually become homeowners, the housing recovery depends on Millennials getting jobs.

What’s Missing from the Housing Recovery

First-time homebuyers are still missing from the housing recovery, making up just 27% of existing-home buyers according to NAR’s May report. That’s down a bit both from last month and from last year.

How has the recovery gotten this far without first-time buyers? Investors and other bargain-hunters bought homes near the bottom of the market, in late 2011, which boosted sales and home prices. Now that prices are near long-term norms – just 3% undervalued – the bargain-hunting engine is sputtering. Repeat buyers, who are trading in one home for another, are taking more of the market.

Would-be first-time homebuyers are stuck: rising prices and mortgage rates have reduced affordability before young adults have been able to recover from the jobs recession. A full recovery that includes first-time homebuyers is still years away; many young adults still need to find jobs and keep them long enough to save for a down payment and qualify for a mortgage. Until that happens, the clearest signs of recovery will be apartment construction and renter household formation, not first-time home buying, as young adults move from their parents’ homes into their own rental units.

NOTE: Trulia’s Housing Barometer tracks five measures: existing home sales excluding distressed (NAR), home prices (Trulia Bubble Watch), delinquency + foreclosure rate (Black Knight), new home starts (Census), and the employment rate for 25-34 year-olds (BLS). Also, our estimate of the “normal” share of sales that are distressed is 5%; Black Knight reports that the share was in the 3-5% range during the bubble. For each measure, we compare the latest available data to (1) the worst reading for that indicator during the housing bust and (2) its pre-bubble “normal” level. We use a three-month average to smooth volatility for the four indicators that are reported monthly (all but home prices). The latest published data are May data for the employment rate, existing home sales, new construction starts, and the delinquency + foreclosure rate; and Q2 for home prices.

See the original article, with more charts, here.

Jed Kolko is the chief economist of Trulia.

MONEY Housing Market

The Cities Where Zombies (Foreclosures, That Is) Are Still Lurking

140626_REA_zombies_1
Everett Collection

They’re the housing market menace that won’t seem to go away – homes abandoned by their owners, not yet taken over by the banks. Even now, well into a two-year recovery in home prices, there remain 141,406 “zombie foreclosures,” according to data firm RealtyTrac.

That’s down 16% from a year ago nationwide, which sounds pretty good. Still, zombie foreclosures increased this quarter in 10 states plus D.C. The problem is particularly persistent in some regions—Florida accounts for more than one-third of all zombies—where upwards of 30% and even 40% of foreclosures are vacant.

Metropolitan areas (keep in mind, these are generally much larger regions than cities themselves) with the highest percentage of vacant foreclosures, reports RealtyTrac:

Metro Area %Vacant
Homosassa Springs, Fla. 43%
Portland 37%
Birmingham 37%
Ocala, Fla. 36%
Destin, Fla. 35%
St. Louis 34%
Worcester, Mass. 33%
Port St. Lucie, Fla. 33%
Punta Gorda, Fla. 33%
Binghamton, N.Y. 33%
Las Vegas 32%
Melbourne, Fla. 32%
Daytona Beach, Fla. 32%
Gainesville, Fla. 31%
Fort Wayne, Ind. 31%

 

Vacant foreclosures were a downright plague during the worst of the housing crisis—homes overgrown with weeds, windows boarded up dragged down property values and in some cases deteriorated into hotbeds of crimes. From a 2008 U.S. Conference of Mayors report: “These properties are a drain on city budgets. They detract from the quality of life, as well as the economic opportunities, of those living around them. They are an impediment to individual neighborhood redevelopment and, ultimately, to achievement of city-wide economic development goals.”

Five years later, a swarm of local and national initiatives and streamlined foreclosure procedures have helped; so has a flood of investor buying. Rising home prices and an improving economy have kept fewer homes out of foreclosure in the first place.

Still, real estate analysts and community advocates fear that the last batch of zombies are going to be the hardest to kill—they may be in the worst shape and in the least desirable neighborhoods. Investors don’t want them, and the properties require way too much work for traditional buyers.

And, community redevelopment types fear, banks are taking their sweet time foreclosing on them at all, putting off the moment when they have to pay all the back taxes, code enforcement fees and other liens that have amassed over the years.

“The banks are hoping the market will keep turning around, or they’re looking for alternatives that lessen the red ink on their portfolio,” says John Taylor, CEO of the National Community Reinvestment Coalition. “There was a time the banks were just giving away these properties trying to get them off the books. Now, they don’t want to add to that.”

Not surprisingly, the longer the foreclosure process lasts, the more likely the owners are to abandon the homes. And where are foreclosures taking the longest? New York and Florida, a 418 and 411 days on average, respectively, followed by New Jersey (378 days), Illinois (272) and Hawaii (249).

Zombie Foreclosures in the Largest 20 Cities

Metro Area %Vacant
New York City 13%
Los Angeles 8%
Chicago 19%
Dallas 25%
Philadelphia 22%
Houston 12%
Washington D.C. 18%
Miami 18%
Atlanta 30%
Boston 20%
San Francisco 8%
Detroit 28%
Riverside, Calif. 6%
Phoenix 25%
Seattle 29%
Minneapolis 22%
San Diego 4%
St. Louis 34%
Tampa 30%
Baltimore 28%
MONEY The Economy

Wealth Inequality Doubled Over Last 10 Years, Study Finds

An analysis by researchers at the University of Michigan shows a drastic increase in wealth inequality since 2003.

A new study finds wealth inequality among U.S. households has nearly doubled over the past decade.

The analysis, performed by researchers at the University of Michigan, shows households in the 95th percentile of net worth had 13 times the wealth of the median household in 2003. By 2013, this disparity had increased almost twofold, with the wealthiest 5% of Americans holding 24 times that of the median.

In dollars terms, the median wealth of a US household was $87,992 in 2003, and by 2013 had decreased 36% to $56,335. In contrast, the richest 10% actually saw their net worth increase from 2003 to 2013, with the highest gains going to the top 5%. The median wealth of the households in the top five percent grew over 12% during the same time period, from $1,192,639 to $1,364,834.

The study also shows similar wealth inequality growth between median and poor households. In 2013, the 50th percentile held 17.6 times the wealth of the least wealthy 25%—over twice the disparity found in 2003.

A principal reason for the rapid increase in wealth disparity over the last 10 years is the different ways various economic groups invest their money. According to the study’s lead author, Fabian T. Pfeffer, more than half of the median household’s wealth in 2007 was in home equity. By comparison, the median household in the richest 5th percentile held only 16% of their wealth in home equity, with the lion’s share being kept in real assets, including business assets (49%) and financial instruments like stocks and bonds (25%).

Pfeffer explains that because stocks have recovered more quickly than the real estate market—the S&P reached its pre-recession high in March of 2013, while home prices are still far from their 2006 peak—average households were hurt far more than richer Americans when the housing bubble popped. When home equity is excluded from household wealth, the impact of the housing crash on average Americans is especially clear. A median household’s total net worth declined by $42,000 between 2007 and 2013, but their wealth held in non-real estate assets declined by only $6,900. The Great Recession’s disproportionate impact on real estate allowed the richest households, who could afford to diversify their investments, to grow wealth even during a deflating housing market.

Source: YCharts

Another concern for middle class households is that many sold off investments during the recession in order meet expenses, and are now less able to enjoy the benefits of a recovering economy. “Part of the lack of recovery is that they [median American households] had to divest,” says Pfeffer. “The troubles will stay with them for the next couple of decades as they try to reclaim these assets.”

Will wealth inequality continue to increase at its current pace? Pfeffer believes it would take another deep recession for inequality to double again in the next 10 years, but says his research confirms what economists like best-selling author Thomas Piketty have been saying for years: that returns to capital have been increasing at a rapid pace over the last century, creating a persistently swelling gap between the wealth of the haves and the have-nots. “I don’t see many hopefully signs that we’re going to get back to where we were 10 years ago,” Pfeffer says.

Some have claimed inequality is less important as long as all Americans see wealth gains over time. The rich may get richer faster, but that might not matter if the poor and middle class are also seeing their wealth increase. Pfeffer disagrees. A rising tide may lift all boats, but the Michigan professor points out that wealth not only tends to determine political influence, but also that wealth inequality greatly affects the opportunities available to the children of the middle class, especially in terms of education. “The further families pull apart [in net worth], the more disparate the opportunities become for their offspring,” he says.

MONEY home improvement

Which Areas Will Spend the Most on Home Improvements This Year?

The homebuilders association estimated home improvement spending for this year. Porch adjusted the numbers to take cost of living into account. So who will spend the most?

We talk a lot at Porch about how much money is spent on home improvements, but the National Association of Home Builders’ estimates of 2014 spending on improvements by zip code is a good breakdown of just how much money is being spent, even all the way down to your local neighborhood.

According to the NAHB, the average zip code in America will see over $5 million spent on home improvement this year. That’s a lot of new roofs, landscaping, and remodels.

On average, total spending on improvements in a zip code is projected to be about $5.1 million in 2014. The top 5 total-spending zip codes are all in Maryland, Texas, or Illinois. Each of these top 5 zips contains at least 15,000 owner-occupied homes and home owners who average at least $145,000 in income and are 60 percent or more college educated. Most of these top 5 zips don’t have an unusually large share of homes in the key vintage for remodeling (homes built from 1960 to 1979), except for the zip at the very top of the list—#20854 in Maryland, a close-in suburb of Washington DC. 20854 is the only zip where over $60 million in spending on improvements is projected for 2014, and over half the owner-occupied homes in that zip were built 1960-1979.

See NAHB’s heat map of average remodeling spend per home by zip code. Lots of heavy activity in the northeast, Colorado, SoCal, and San Francisco Bay Area.

Here’s the NAHB’s list for all 50 states plus the District of Columbia. Read on to see how I adjusted these figures for cost-of-living.

NAHB 2014 Spending Projections by State

RANK STATE HOMES SPENDING (M) PER HOME
1 District of Columbia 110,668 $299.6 $2,707
2 Connecticut 913,482 $1,961.7 $2,147
3 New Jersey 2,099,380 $4,471.1 $2,130
4 Maryland 1,459,393 $3,106.4 $2,129
5 Massachusetts 1,583,170 $3,351.2 $2,117
6 California 6,863,765 $14,053.1 $2,047
7 Hawaii 260,435 $529.5 $2,033
8 Colorado 1,320,302 $2,659.0 $2,014
9 Virginia 2,059,305 $4,136.8 $2,009
10 Alaska 161,691 $315.9 $1,954
11 New Hampshire 372,053 $723.4 $1,944
12 New York 3,894,151 $7,569.7 $1,944
13 Washington 1,690,642 $3,203.4 $1,895
14 Rhode Island 248,947 $470.3 $1,889
15 Minnesota 1,536,021 $2,840.5 $1,849
16 Vermont 185,244 $340.5 $1,838
17 Illinois 3,195,820 $5,866.9 $1,836
18 Utah 653,230 $1,189.1 $1,820
19 Oregon 953,810 $1,735.2 $1,819
20 North Dakota 199,492 $362.5 $1,817
21 Texas 5,825,370 $10,288.5 $1,766
22 Delaware 249,624 $436.2 $1,747
23 Nebraska 498,327 $861.8 $1,729
24 Kansas 750,703 $1,295.5 $1,726
25 Montana 278,602 $478.7 $1,718
26 Arizona 1,555,284 $2,669.8 $1,717
27 Georgia 2,310,104 $3,953.1 $1,711
28 Wisconsin 1,558,251 $2,628.8 $1,687
29 Pennsylvania 3,444,645 $5,805.0 $1,685
30 Florida 4,867,931 $8,165.4 $1,677
31 Wyoming 158,372 $265.6 $1,677
32 New Mexico 526,208 $864.4 $1,643
33 Oklahoma 986,719 $1,619.6 $1,641
34 Missouri 1,614,450 $2,636.4 $1,633
35 Ohio 3,045,022 $4,969.2 $1,632
36 North Carolina 2,534,475 $4,132.5 $1,631
37 Nevada 580,080 $942.8 $1,625
38 South Dakota 224,676 $363.2 $1,617
39 Idaho 415,126 $670.6 $1,615
40 Iowa 898,866 $1,451.5 $1,615
41 Michigan 2,739,690 $4,420.4 $1,613
42 Louisiana 1,161,174 $1,873.1 $1,613
43 Maine 402,697 $646.4 $1,605
44 Tennessee 1,694,955 $2,684.2 $1,584
45 South Carolina 1,264,229 $1,997.5 $1,580
46 Alabama 1,292,936 $2,017.3 $1,560
47 Indiana 1,747,919 $2,697.0 $1,543
48 Kentucky 1,159,697 $1,787.3 $1,541
49 Arkansas 771,194 $1,178.6 $1,528
50 Mississippi 755,676 $1,131.7 $1,498
51 West Virginia 538,188 $782.4 $1,454

In general, the states at the top of the list are mostly high-cost areas, and those at the bottom are lower-cost areas. So I adjusted the list based on first quarter 2014 cost of living data to get a better sense of which states are going to be doing more home improvement in 2014.

NAHB 2014 Spending Projections Adjusted for Cost of Living

RANK STATE COST OF LIVING ADJ. PER HOME
1 Virginia 97.0 $2,071
2 Colorado 100.4 $2,006
3 Utah 93.0 $1,957
4 District of Columbia 139.6 $1,939
5 Illinois 95.5 $1,922
6 Texas 92.8 $1,903
7 Kansas 91.3 $1,890
8 Nebraska 91.7 $1,886
9 Washington 102.6 $1,847
10 Georgia 92.7 $1,846
11 Minnesota 101.8 $1,817
12 Oklahoma 90.4 $1,816
13 North Dakota 100.4 $1,810
14 Maryland 117.7 $1,808
15 Wyoming 93.2 $1,799
16 Tennessee 89.7 $1,765
17 New Mexico 93.4 $1,759
18 Iowa 92.5 $1,746
19 Massachusetts 121.3 $1,745
20 Missouri 93.7 $1,743
21 Montana 98.6 $1,743
22 Ohio 94.1 $1,734
23 Michigan 93.9 $1,718
24 Connecticut 125.2 $1,715
25 Idaho 94.2 $1,715
26 Kentucky 90.0 $1,712
27 Wisconsin 98.8 $1,708
28 Mississippi 87.8 $1,706
29 Indiana 90.7 $1,701
30 Louisiana 95.3 $1,693
31 Alabama 92.4 $1,689
32 Arizona 101.8 $1,686
33 Florida 99.7 $1,682
34 New Hampshire 116.1 $1,675
35 New Jersey 127.6 $1,669
36 North Carolina 97.8 $1,667
37 Pennsylvania 101.6 $1,659
38 Delaware 105.7 $1,653
39 Arkansas 92.5 $1,652
40 South Dakota 98.3 $1,645
41 South Carolina 96.1 $1,644
42 Nevada 100.2 $1,622
43 California 127.1 $1,611
44 Vermont 117.2 $1,568
45 Rhode Island 120.9 $1,563
46 Oregon 121.7 $1,495
47 Alaska 131.8 $1,482
48 West Virginia 98.6 $1,474
49 New York 132.2 $1,470
50 Maine 109.7 $1,463
51 Hawaii 162.9 $1,248

After adjusting for by how expensive each state is, the top five for home improvement activity in 2014 are Virginia, Colorado, Utah, the District of Columbia, and Illinois. The bottom five are Alaska, West Virginia, New York, Maine, and Hawaii.

Bottom line: If you live in a state near the top of the list, don’t expect that you’ll have a lot of flexibility on schedule or price when working with a pro for your home improvement project since lots of your neighbors are probably planning similar projects, too. If you’re in a state near the bottom of the list, you might have a little more leeway.

More from Porch:
Tips to Conserve Water in Your Home
Should You DIY Your Bedroom Remodel?
These 5 States Love Pianos Almost as Much as TVs

Tim Ellis is a data journalist for home improvement website Porch.

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