Whenever the housing market goes into a slowdown where either the fair market value of homes goes down or the inventory of unsold houses increases, it actually presents an opportunity for existing homeowners.
Except for life changing events, existing homeowners should stay put and wait it out until the housing market recovers. During this housing slump, it is simply an opportunity for existing homeowners to take a look at home improvement. It can be opting to make needed repairs, updating certain rooms in the house, or improving the landscape.
However, depending on the severity of the market contraction in your area, it is important not to over-improve the home where you can not recoup your investment for years to come. Some areas of the U.S. such as Florida have come down in the market value where you may not have much equity in your house.
It is a good idea to either get an appraisal or a free market analysis from a local real estate broker. Ask the appraiser to give you a value for the improvements you have in mind. Once you determine the present and future market value of your house, and conclude that you still have equity in the house, the next step is to decide what improvements or repairs should be done.
Doing the right kind of home improvement during a market slowdown will make the house more marketable as the market recovers and more than likely, will increase the value of the real property as well.
Kitchen and bathroom updates almost always recoup the cost of labor and materials. But there is a right way, and a wrong way to go about it. The type of counters, sinks and cabinetry may over-improve your kitchen compared to other properties in your neighborhood. The best strategy is to improve it where it stands out just a little bit better than the other kitchens in your neighborhood.
If one improves by first taking the neighborhood into account, kitchens usually return around 80 percent of your investment. Bathrooms return around 90 percent of your investment. There is even a much greater return if you can do some of the work yourself.
Paint remains one of the best investment improvements. While painting the same color throughout your home can seem plain or drab to some buyers it is still recommended to steer away from bold, dramatic colors that will not appeal to the average buyer. In order to do it right, remove paint chips, and repair cracks before painting.
Vinyl siding is long-lasting, resilient, and looks great. Vinyl siding is a good investment if most of the newer houses in your neighborhood have vinyl siding. Otherwise, it is best to repaint.
Updating windows with window replacements can be a good improvement. Window replacements are a type of window unit that fits into the frame of an existing window. It can be a do-it-yourself project. These replacements are better at keeping the heat in the winter, and cooler air in the summer thus saving energy costs. Windows made today are sealed tighter and often need less maintenance than older type windows. There is even a convenient way to clean the outside of these windows. This may be an expensive proposition if you hire someone to install the windows.
Concentrating on either small improvements such as painting or larger improvements such as kitchens during a housing market slump will give you the edge once there is a recovery in the housing market.
Know your legal rights and consumer rights before making any commitments.