Will Upgrading Your Home Help You Sell It?

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WSJ: May 15, 2008; Page D1

Big remodeler stated in 2004 that people are spending 50K on bathroom upgrades and thus we can/are overpricing on room additions because much lower profit margin. Guess those days are over. Aw, so sad.

“If you're putting your home on the market anytime soon, you may want to rethink those plans to bump out the kitchen or add an extra bath. During the housing boom, such ambitious projects would recoup as much as 90 cents on the dollar.

Not today. The resale value of improvements in general is sliding, according to experts. In a departure from recent trends, homeowners are getting the best payback from relatively mundane improvements, such as sprucing up the exterior of their house or putting in new windows. After spending $400,000 remodeling the suburban East Greenwich, R.I., home he bought for $820,000 in 2002, Jonathan Salinger learned he probably couldn't sell it for more than $1.1 million in today's market. That's after posh additions that included landscaping, a pool, an outdoor kitchen, first-floor laundry and mud rooms, and custom cabinetry.

As a result, the 45-year-old district manager for a mortgage lender recently decided not to list his house for sale and scratched plans to move the family closer to his children's private school in Providence.” …. pay site link:

http://online.wsj.com/article/SB121081280615193817.html?mod=hps_us_inside_today

[Doofrat]

I think that there are a lot of parallels between the day traders of the .com bubble and the flippers of the housing bubble. The day traders just bought and sold and everything went up anyway so silly ol’ things like whether the company actually produced anything of value didn’t matter. The day traders weren’t actually doing anything special, they just couldn’t lose as long as they were long (if only for the day).

Same with flippers. They didn’t do anything either. They just bought property and then “fixed it up”, not by repairing anything major, but just doing cosmetic work and then by the time they went to sell the property, it had appreciated in price and it showed nicely to the next fool with the new appliances and granite counter tops.

So it’s not surprising that the upgrades aren’t fetching anything now, it’s back to Location, Location, Location.

[Doofrat]

I think that there are a lot of parallels between the day traders of the .com bubble and the flippers of the housing bubble. The day traders just bought and sold and everything went up anyway so silly ol’ things like whether the company actually produced anything of value didn’t matter. The day traders weren’t actually doing anything special, they just couldn’t lose as long as they were long (if only for the day).

Same with flippers. They didn’t do anything either. They just bought property and then “fixed it up”, not by repairing anything major, but just doing cosmetic work and then by the time they went to sell the property, it had appreciated in price and it showed nicely to the next fool with the new appliances and granite counter tops.

So it’s not surprising that the upgrades aren’t fetching anything now, it’s back to Location, Location, Location.

[Doofrat]

I think that there are a lot of parallels between the day traders of the .com bubble and the flippers of the housing bubble. The day traders just bought and sold and everything went up anyway so silly ol’ things like whether the company actually produced anything of value didn’t matter. The day traders weren’t actually doing anything special, they just couldn’t lose as long as they were long (if only for the day).

Same with flippers. They didn’t do anything either. They just bought property and then “fixed it up”, not by repairing anything major, but just doing cosmetic work and then by the time they went to sell the property, it had appreciated in price and it showed nicely to the next fool with the new appliances and granite counter tops.

So it’s not surprising that the upgrades aren’t fetching anything now, it’s back to Location, Location, Location.

[Doofrat]

I think that there are a lot of parallels between the day traders of the .com bubble and the flippers of the housing bubble. The day traders just bought and sold and everything went up anyway so silly ol’ things like whether the company actually produced anything of value didn’t matter. The day traders weren’t actually doing anything special, they just couldn’t lose as long as they were long (if only for the day).

Same with flippers. They didn’t do anything either. They just bought property and then “fixed it up”, not by repairing anything major, but just doing cosmetic work and then by the time they went to sell the property, it had appreciated in price and it showed nicely to the next fool with the new appliances and granite counter tops.

So it’s not surprising that the upgrades aren’t fetching anything now, it’s back to Location, Location, Location.

[Doofrat]

I think that there are a lot of parallels between the day traders of the .com bubble and the flippers of the housing bubble. The day traders just bought and sold and everything went up anyway so silly ol’ things like whether the company actually produced anything of value didn’t matter. The day traders weren’t actually doing anything special, they just couldn’t lose as long as they were long (if only for the day).

Same with flippers. They didn’t do anything either. They just bought property and then “fixed it up”, not by repairing anything major, but just doing cosmetic work and then by the time they went to sell the property, it had appreciated in price and it showed nicely to the next fool with the new appliances and granite counter tops.

So it’s not surprising that the upgrades aren’t fetching anything now, it’s back to Location, Location, Location.

[EconProf]

BobS
In the rapidly appreciating market of a few years ago, many flippers fooled themselves into thinking their improvements were adding to their house value. In actuality, inflation of 1 – 2% month was doing the trick. Some “improvements”, such as pools and weird paint colors, actually subtract from value by narrowing the market of potential buyers.
Best course is to concentrate on the basics: clean up, new paint and carpet with neutral colors, modern light fixtures, and street appearance, esp. front entry. And remove half your furniture and possessions and have all windows professionally cleaned. Square footage and location will then determine value.

[EconProf]

BobS
In the rapidly appreciating market of a few years ago, many flippers fooled themselves into thinking their improvements were adding to their house value. In actuality, inflation of 1 – 2% month was doing the trick. Some “improvements”, such as pools and weird paint colors, actually subtract from value by narrowing the market of potential buyers.
Best course is to concentrate on the basics: clean up, new paint and carpet with neutral colors, modern light fixtures, and street appearance, esp. front entry. And remove half your furniture and possessions and have all windows professionally cleaned. Square footage and location will then determine value.

[EconProf]

BobS
In the rapidly appreciating market of a few years ago, many flippers fooled themselves into thinking their improvements were adding to their house value. In actuality, inflation of 1 – 2% month was doing the trick. Some “improvements”, such as pools and weird paint colors, actually subtract from value by narrowing the market of potential buyers.
Best course is to concentrate on the basics: clean up, new paint and carpet with neutral colors, modern light fixtures, and street appearance, esp. front entry. And remove half your furniture and possessions and have all windows professionally cleaned. Square footage and location will then determine value.

[EconProf]

BobS
In the rapidly appreciating market of a few years ago, many flippers fooled themselves into thinking their improvements were adding to their house value. In actuality, inflation of 1 – 2% month was doing the trick. Some “improvements”, such as pools and weird paint colors, actually subtract from value by narrowing the market of potential buyers.
Best course is to concentrate on the basics: clean up, new paint and carpet with neutral colors, modern light fixtures, and street appearance, esp. front entry. And remove half your furniture and possessions and have all windows professionally cleaned. Square footage and location will then determine value.

[EconProf]

BobS
In the rapidly appreciating market of a few years ago, many flippers fooled themselves into thinking their improvements were adding to their house value. In actuality, inflation of 1 – 2% month was doing the trick. Some “improvements”, such as pools and weird paint colors, actually subtract from value by narrowing the market of potential buyers.
Best course is to concentrate on the basics: clean up, new paint and carpet with neutral colors, modern light fixtures, and street appearance, esp. front entry. And remove half your furniture and possessions and have all windows professionally cleaned. Square footage and location will then determine value.

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Great tips Bob

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Great tips Bob

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Great tips Bob

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Great tips Bob

[Author]

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