How much money will you make on that lovely new kitchen or bathroom when you go to sell your house? Oopsy — likely not one penny. In fact, according to the 2011–12 Remodeling Cost vs. Value Report (www.costvsvalue.com), released last week, you will lose 30-35% — or more — on most home remodeling projects, even “mid-range” ones. This gap is the worst in nine years, since the survey began in 2003. For example, a ”minor” $19,588 kitchen remodel? Expect not to recoup — that is, expect to lose — more than $5,000 on that “investment” when you go to re-sell. Debbie Downer reports…
This much-cited Remodeling Cost vs. Value research report is completed annually by Remodeling Magazine, and includes data gathered in collaboration with HomeTechPublishing, the National Association of Realtors and Realtor Magazine. It looks at 35 popular home remodeling projects, year after year, to assess the returns (read: losses) of each project upon resale. The magazine does a really nice job reporting the data and explaining the survey on their website – see it here for info on costs vs value for each project.. and there are regional reports, too. Ugh, I think that I am also reading that the gap between remodeling costs and value recovered on resale (loss) is the worst since the research was started in 2003.
One of the biggest pet peeves in my life, I’m serious,
is the way these findings are soft-pedaled every year
For example, Reuters covered this 2011 Cost. vs Value report, and here is one of their sentences:
Remodeling projects earn back 57 percent, on average.
True enough. So I cannot argue. But, this is definitely a “glass half full” way to state the findings.
Hey, let’s pretend they were talking about the U.S. stock market — say, the Dow Jones Industrial index — instead. Would we see this headline:
The Dow Jones Industrial Average earned back 57% last year.
Or this one:
The Dow Jones Industrial Average plummeted 43% last year (sending the world into another global Great Depression.)
I repeat, hitting thee over the head: ‘Earning back 57%’…means you just lost 43%. Every project, every situation is going to be different, but taking these numbers at face value, chances are, you are not improving your home’s value with remodeling projects if you count the money you put into the update. You are going to come out with le$$, not more $$.
In other parts of the Reuters article, the message was ‘more in your face’ about the gap. But to me, the story did not seem ‘alarmist.’ It was kind of… peppy. Ack! These numbers are dismal, shocking. Even in “bubble days,” the return was only 76%, that is: The loss was 24%. Am I missing something?
One of reasons this blog’s tagline is “Love the house you’re in” is that I *think* I have long understood that unnecessarily “updating” your home to reflect what is trendy today is not a particularly sound financial investment. In fact, what’s trendy today… will likely be ‘hideous’ in about 10 years. In the same vein, I also read somewhere that even getting the 50%-80% return/20%-50% loss indicated by these figures assumes near-immediate resale… that is, today’s updates begin to depreciate, immediately. So, contrary to a lot of what’s in the mainstream: We talk here about keeping your “outdated” vintage bathrooms and kitchens, if they are in good shape. And if renovations are required, I am an advocate in choosing styles that are harmonious with the original architecture of your home — in this way, your interiors will be “dated” to match the date of your house.
Spend money on your house? Of course! Americans love their homes, and are likely to continue to want to improve and update them. Moreover, a home can be one of the greatest life-investments you will ever make — in creating memories for yourself, family and friends… for providing a creative outlet… for building and being part of a community. So, you will want to make it “yours.” But, get back all the money you put into the modern new kitchen and then some? No no no! Read the report, and be thoughtful and realistic about the goals of your remodeling projects … unless money is just not an issue.
Data cited © 2011 Hanley Wood, LLC. Complete data from the Remodeling 2011–12 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.
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I bought the little house in 2007, a year before the crash. I have put money into the house, making it a more efficient, comfortable place to live. If I listed it today, I would be lucky to get what I owe the bank & closing costs out of it. Foreclosures have driven housing prices down. I used the 28% rule when I bought my house, not buying more house than I could afford. Lots of other people around here took advantage of lax housing credit available and ended up with more house than they could afford, hence all the foreclosures. I feel like the responsible adult who ends up being stuck paying for others foolish choices.
I agree with the above comment, as I said before we remodeled our entire house for five years. We put the best of everything because we thought this was going to be it, then my husband got transferred. It took us 2 years to sell, we lost about 50k and sold it for 5k more than we paid for it. Now this is the great part, the people who bought the house had a Rural Development loan, therefore they didn’t have to put down a single penny plus they asked us to pay 5000 for closing, so these two actually walked away with money at the sale of our home! We paid to sell our house, to two people who couldn’ t even save up to pay closing costs on a home. Talk about feeling like the grown ups in a situation.
I prob won’t make ANYthing when I sell, since I’m restoring the house. Who wants a pink and gray mosaic til on the bathroom floor with coral built-in shelves? Who wants steel cabinets and subway tile backsplashes in the kitchen?
Esp since my house was just devalued 17000!!!
Pam, you are so correct in what you are saying! A house that just recently sold in my own neighborhood is a prime example. (and I am in a great area…location, location , location applies here!)….
One of my not so savy neighbors bought a small cottage in 2007, and put in “high end ” updates (posted on zillow for the world to see..), she bought for 141,000, “invested” 65,000 and sold this past spring, for 162,000. Thats a lot of money!
I’ll say it again, I am so thankful for retrorenovation.com. Your sie has me looking at my house with new eyes. I no longer listen to those that dont appreciate the “dated” look of my house.
Some things are inevitable…like you said, we have to take care of our homes…roof,s leaky widows, plumbing…are musts and have to’s. but I will be keeping both my pink and acqua bathrooms, my retro broken tile floor, AND my vintage cabs and faux butcher block countertop. Its a lot cheaper to do a little “backdating”, but even with that the only return I will expect for my efforts will be “the enjoyment of my home”.
We built a new, entry level home in 2004 on almost 7 acres. In 2008, we decided we needed to move to the next county, which has really good services for my son, who has severe mental impairments. My husband was able to negotiate with a buyer a price that was just below what it cost to build the house. Then the buyer’s bank refused the loan and told us the house wasn’t worth that much, that we had to lower the price. If we hadn’t had an enormous down payment and 50% equity in the house from the day we moved in, we would still be there. We are now in a vintage 1962 home in a great neighborhood with great schools and don’t regret the move. My son’s teachers and school are totally awesome and completely competent and work miracles every day, they put so much love in their work, so it well worth a loss. A major rehab, if done primarily to impress the neighbors or for resale value, isn’t!
We recently had to sell our home due to a work relocation. Luckily, we’d been there for 12 years, so we could price to sell. Nevertheless, we put around $10K into cosmetic “improvements”. We knew we wouldn’t get a dime back – what that money got us was a sale.
This strategy I understand. But underscores the point that “dated” starts happening the day after you install whatever is current “today.”
Absoultely. Some were things that needed to be done (replacing carpet that really was worn out), but some was “make the beige bathroom shower etc. white”. It was frustrating, but that just seems to be this current yuck market.
Luckily we purchased a very nice 1973 home in Ft Lauderdale that has been “re-done” in contractor blah. We are making it a mid-century glory since south Florida homes are really a blank slate in terms of “period.”
Times are tough….but I think alot of folks were led into false luxury lifestlyles
I think we DO live a better standard than our parents….It is just easy to forget that our mothers (and fathers) seldom had more than $10 bucks in their pockets.
Very little discretionary cash
I never understood putting 50k into a room used soley for a microwave and coffemaker. How much cooking is being done in these Spas?
A family of 4 at Red Robin -eating burgers- is spending 75% of my weekly food budget on one meal. This makes no sense.
Wow, Gavin. Absolutely correct. Here in San Diego and its surrounds it’s nothing to shell-out 100k and then tire of actually using the kitchen after a few heady months of inviting over guests and entertaining them with takeout gourmet from Whole Foods.
After a while, it’s coffeemaker/fridge/microwave…coffeemaker….
Wash, Rinse, Repeat.
Smart investments remain room additions or conversions of tasteful in-law flats or efficiency studios with separate and discrete entrances (with off-street parking).
One more thing:
We all have to live somewhere. And it costs money.
Think of it in terms of renting…..
While renting- all you get- maybe- is a tax write off. Otherwise, thats $1,200 a month . Gone every 30 days.
We paid 189k in cash seven years ago. I figure every month I am saving money and building a (wait for it…) LONG TERM INVESTMENT.
Also….folks under 25, what ever happened to the “starter” home?
I think this is a very very complicated topic, gavin. Will post soon.
When I was “under 25″ 23 to be exact, I bought a starter home. It was 800 sq ft, a complete dump, and in a borderline safe area of the city that had a lot of artists, musicians and creative types in it. Being a new to the working world graphic designer, I didn’t have/make much money for a big house (nor did I need one). I spent 4 years learning how to do projects around that house by myself or with the help of my parents, very few times did I hire a contractor. I also was the block watch “captain” so I was trying to improve the safety of my block as I improved my house. I refinished floors, put in all new plumbing, heating, a/c, totally gut remodeled the tiny kitchen and bath, new front porch, new windows, etc. I worked HARD.
Then I met my husband, we got married and with two incomes and the thought we might start a family someday have now moved to a safer neighborhood and are living in my dream house (a 1962 ranch that is 1,900 sq feet-plenty of space for a family) We didn’t pay too much for it (plus I sold my old house in a WEEK in 2010-likely because I updated the right things and it was in a really good location), it is in mostly original, decent condition and we are working to do things little by little to make it our home and more comfortable for us to have a family in. So yes, there are young people who do things right (buy only what they can afford, work hard to fix it up, move up when the time is right and not just because they want a giant house, etc.) We may be a minority, but we still exist.
Way to go, RetroRanchRevamp!
I am a realtor in the Colorado Springs area. My main advice to clients is 1) stay in your house. Don’t buy thinking that you’ll sell for a profit in 3-5 years. Those days are OVER. Your house is a place to live that is yours and currently still a terrific tax break. 2) Do improvements that you want for YOU. Don’t do them with an expectation that it’s a money maker. 3) Focus on things that “button up” the house and make it efficient. Insulation, windows, doors, etc. 4) Paint can do wonders and it’s CHEAP! The upside to owning is that you can paint any color you want. Keep permanent surfaces as neutral as possible, and paint away (and here, I refer back to #2. If you want the boomerang formica – go for it – because YOU like it. Not for the next guy.)
I’m lucky to have lived in my house 10 years, and actually have seen a significant jump in value. But that’s offset by the fact that we’ve made about 60K in improvements over those 10 years. And the deck is falling off the back of the house and still on the list. But you know what? I LOVE the house I’m in!!
You sound like a very wise advisor indeed, Mary!
I learned from my parents – they spent 30+ years fixing up a house! And left the pink tile/lavender-grey accent bathroom intact the entire time!
This is exactly what I was going to say. Love the house you’re in. Don’t move if you can help it, you usually lose money that way.
My husband and I fixed up an 800 sq ft apartment that we bought for cheap and sold it for twice what we paid, including the price of the updates. BUT! This was in Norway, in an area where people have a lot of money, we did all the work ourselves (removing 8 layers of wallpaper and skim coating the walls, laying tiles, tearing down walls, etc). And most of all, it was before the crash. This is not going to happen again!
We now live in a rather run-down place with a lot of land but no mortgage at all, and we apply the same philosophy to our cars as to our house. We keep them and fix them because buying a new one will make you lose a lot of money. Don’t buy into the philosophy that you have to move or buy a new car every few years.
Enjoy what you have.
Yup!
AMEN Brig….
In addition to everything else posted above, it seems as if 90% of the DIY or HGTV shows focus on “fix to sell”, or “I bought a hellhole” type houses.
In 2006, I bought a horrible house in a great neighborhood. It needed everything. I was mostly a ” give myslef something to do while my new bride was deployed to Afghanistan” type thing. I was able to get the seller to set aside a goodly sum for repairs, and I di most of the work myself. Fortunately, the house is in a high military area, so we’ve been able to keep long term renters in the house with zero gaps. If I sold today, I MIGHT recover the purchase price, but certainly none of my investment.
A big problem is that folks don’t seem to stay anywhere for long anymore, so the remodelling/updating timetable gets compressed. Our current house, which I am trying to drag back to it’s 1965 roots, is one we’ll be in for a minimum of 15 more years, so the investment gets spread out over time.
Thanks for your comments, Glenn. Obviously, if you can do the work yourself, you will save a lot. Your comment about folks moving so much — I think this contributes a lot to the issue. If “new” buyers continuously want to make updates to replace “outdated” kitchens and bathrooms — then previous updates never get fully amortized!
Ok, now here is a good point. Rental property is always judged on updates. Your ability to get top dollar and keep it occupied is directly correlated to the perception of value, i.e. pretty and new. Single family homes, It can’t apply. Buyers that walk through (just watch the shows) always pick out what they hate or would change first before even considering what they like about a property. No body looks at a rental and says “its a fixer upper”. You wouldn’t put money into a house someone else owns.
I am guessing that most buyers dramatically underestimate how much money they are going to have to put into their fixit and renovation projects. In contrast, a renter wants to see that stuff in their rental property isn’t about to break, because they will be dependent on the landlord to fix it.
Most people do not realize that house is typically a depreciating asset. Historically, home prices track the inflation rate (because inflation is tied to wages and the amount of home people can afford is directly related to what they earn). That said, almost all of the money that you put into the home to maintain it will usually just push it back to the inflation adjusted value (which is where the depreciating part comes in–you need to spend money to keep your homes value rising at the rate of inflation). But at the end of the day there is a cost associated with living and we must pay it in either rent or maintenance. That said, you should buy only the amount of house you truly need and only put into it things that you feel make your quality of life better. Flipping houses, and spending money on remodeling in hopes of achieving never ending increases in value only works in bubbles. I just hope that neutral renovations and McMansions remain in the past as well.
Agreed. Well said.
Because of life complications the house I’m in was bought because I knew I could resell it and not be out of pocket in the year after the purchase. Being in a large government town with a water view I was the winner in a bidding war, something I swore I’d never do. For me it was about location, close to downtown but coming back into town from the country it was still not so big city. Supply and demand applies a lot around here so I know, at this point, I’ll get all my money back should I have to sell but not make scads due to the 80 grand the renos cost….most of them now hidden behind walls and floors….yes, it had been renoed but not exactly in the right way unless holes under the basement flooring, leaking bathrooms, no insulation and tons of mold were the plan.
I agree with Gavin, spa kitchens escape my ken and not only because there only seems to be about a dozen designs. Kept the kitchen the former owner put in even though it isn’t my dream kitchen because it was new and she did it to go with her teak furniture so it works.
Love where you are, certainly, but I’m very grateful as well.
I’ve been to too many Recycled building supply places where there are complete sets of brand new kitchens that have been ripped out of remuddled homes to fall for that trap. People who want a new kitchen will want ThEIR new kitchen – not something you think they might like.
All the improvements we have done were because they were necessary (new gas furnace after the oil company said they wouldn’t service the old one, breaker panel to replace fuse panel, new plumbing) or because we wanted to do them (opened wall between kitchen and dining room, repaired deck, expanded the basement “toilet room” into a 3/4 bath)
Never try to guess what the next owners will want. That’s a losing bet.
Well said, Dan. We have followed the same philosophy and spending rationales. You should do only what you need and personally want, because the eventual new owners are likely to rip out whatever you changed.
Yes, this is why we have so few time capsule houses. New owners invariably “don’t get it” and rip old stuff out. The more often a house has changed hands, the more likely you are to see change, after change, after change. Time capsules are almost always owned by original owners, or have changed hands few times…
Well said, Dan. We have always made home “improvement” and renovation decisions based on what we want, with a limit on spending. And as Gavin said above, “You have to live somewhere,” so don’t remodel for resale – remodel for yourself and don’t go overboard trying to anticipate what future owners would want. They’ll probably rip it out anyway.
Darn interface: my first comment didn’t show until I posted again! Sorry for the virtual duplication!
I won’t be disappointed in whatever I get for my house when it sells (way in the future!) because I remodeled it to LIVE in, not to meet market trends. I wanted a June Cleaver house and that is what I created with sunny colors and vintage looking tile schemes and what I consider to be classic design elements. I never liked the granite and stainless look anyway–it doesn’t look homey–so I created my home to represent the things that make me feel ‘at home’. Shining hardwood floors with beautiful area rugs, classic traditional furniture, pictures of my family and friends–no one comes into my home and doesn’t mention that they love it because it ‘feels so good in here’. Happy and homey.
As a cook myself, I never understood the granite thing: stone counters are horrible on dishes, knives, etc. if you drop a wine glass and it lands on a Formica counter or even a linoleum floor, you have a chance of it surviving, or at least breaking into manageable pieces. If it lands on stone or tile, you’ve got a million shards to deal with.
And tile floors are horrible on your back If you are cooking for a long time. That’s why commercial kitchens have mats in work areas.
With that said, our house has the original tile counters. The only good thing about them is that you can set a hot pan on them and not have to worry (handy for basting the T-Day turkey). When we eventually redo the kitchen we’ll keep the tile backsplash, but the counters will probably go in favor of Formica. There’s nothing more dreary than bleaching the grout
Styles and fads aside, you want to be practical.
I agree with the thoughts expressed here for the most part. I do wonder how you measure the pleasure you might get from using a tiled shower restoration versus a fiberglass shower stall replacement?!
Remodeling for “pleasure” is a whole different animal than remodeling for “profit.” Another way to consider whether the money you plan to spend is “worth it,” is to calculate how many hours it will take you to earn that money – but back out taxes, commuting, work expenses, too. Do you want to work that much longer to earn that money? (And do you otherwise, have the wiggle room to spend that money that way?) If so, go for it.
And hey, just to be clear: I am a house-lover and have spent mucho dinero remodeling my house! In retrospect, the only expenditure I would “un do” would be the purchase of two, new oversized slipcovered sofas and matching chair-and-a-half circa 1995. Oh, and that distressed TV armoire, too. See a trend: New, fashionable furniture. Now stored in my basement. Everything else in my house is vintage…
I love the tiled shower we put in our new master bath so much, we are putting in a similar one in our winter retreat. It really does add to my day somehow to shower in such a beautiful place. The first shower replaced a tub with with tile surround and frosted glass doors, the winter retreat one is an addition. These are definitely “for pleaure” more than for investment. ‘Tis true the style will doubtless change before we ever get ready to sell.
Not to worry, the original tile surround was plain white 4″ tiles.
And then…..you have CALIFORNIA. A state seemingly unto its own with regard to real estate prices.
I commend everyone here who has bought what they could afford, and who has not gotten sucked down the “new and bigger is better” rabbit hole. However, I’d venture to say that few posting here are in the Bay Area, where a shoebox house on a postage stamp lot in a decent neighborhood will run you upwards of $500k to $700k. And when I say shoebox, I really mean 800 to 1200 sq feet, not anything more. Postage stamp lot? 4000 to 7000 square feet.
There is NO such thing as buying what you can afford here, much less having any money left over for basic repairs and/or very modest improvements. Such is the price we pay for great weather and not a lot else. Certainly there are MANY great houses here, but unless you have at least $100k in the bank to meet your 20% down payment, you’re probably just going to stay in renter’s land. This in spite of the real estate downturn. I’d guess that housing costs here would need to take another 30-40% dump before we return to “affordable”.
So many people here bought houses 2-3 hours away just to live the “American Dream” because the houses were 50% cheaper and probably 50% larger than here in the Bay Area. I see them ensnared in horrible commutes of 2-3 hours EACH WAY just to get back to their home after they leave their Bay Area / San Jose jobs. No thanks!
So, I’m going to lose just about every nickel I put into the 30 year old mobile home I bought in San Jose, but then again, I’m only losing $100k maybe (after improvements), rather than sitting on a 1/2 mil mortgage I can ill afford, even though I have a really great job, or losing that same $100k in paying out pure rent every month.
I do dream some days of chucking it all here, but the paycut to go to another state is probably too drastic at this point. So, I am left to Love the House (Trailer) I’m in! And ever thankful for this blog!!!
I just don’t understand California. Housing prices need to dovetail with wages, as another Commenter previously mentioned.
I agree Pam – if I had my salary now in ANY other state just about, I’d be living in a pretty grand house, of the vintage I prefer, and probably on acres!
Had to laugh this morning, right after I posted, I just received the November 2011 Sales Report for Silicon Valley real estate in my email box:
Condo/Townhomes, Average Price: $357k
Median Price: $318K
Single Family Homes, Average Price: $716k
Median Price: $549k
99% of listings sold received their asking price. Ugh. It’s ugly out here, no question.
Silicon Valley is yet a whole ‘nother animal, I bet!!!
Wouldn’t house prices also reflect location as well as supply and demand, like N.Y. City to northern N.Y. ?
On Main St. in my sister’s wee town you could buy an American 4-square with over a quarter on an acre of land for 38,000 asking but where I live something equivalent on a tiny lot would be 600,000 plus and need lots of work.
YES! I live in the NY metro, and until the bust, a crap house in a crap area was in the 400,000′s. We waited and got ours in the low two’s but it is a teeny house, and totally not updated, which is fine with us. We like it the way it is.
I agree, the “low times” of a trend are 10-30 years after the fact, so the chances of the improvement being current and in vogue when you sell is low. I go with getting what you like, whatever that may be.
I actually should have started my prior post with my basic point: Be thankful if you own a house and can afford to remodel / redecorate, even modestly over time, and even at a loss! There are many responsible people who just cannot afford to own a house where I am, so they have nothing to remodel.
Pam, this is a great look at this issue. Thank you.
I made my peace with this several years ago, when I remodeled my kitchen to a look contemporary to my 1939 house. I sweated the details; would a future buyer want a kitchen built around a 40 inch range and 5-foot tall, 1947 fridge? Would they want linoleum counters or floors?
Then I realized I didn’t care. It’s MY house. I did the kitchen and my only regret is that it’s too small for a table because it’s my favorite room in the house! I got 110% return on satisfaction.
As I mentioned in the story, Paul, I fundamentally believe that Retro Renovating — or “dating” — a kitchen or bathroom to the original date of your house is the smartest way to go. Put in a “2011 kitchen”, for example, and in 5-10 years — it will look “dated”… those next owners will think it’s “hideous” LOL not. The “updating” to what is trendy “today” cycle NEVER ENDS. In contrast, 50 years pass… and ORIGINAL architecture and “historic renovations” becomes prized and in demand. Hence: This blog!
Also, Paul: Good on you!! As time passes, more and more and more folks will want original architecture, features and thoughtful, appropriate restorations. It ALWAYS happens.
Yay, Paul! We also have a 1939 house and while we originally started our kitchen “remodel” to make it more efficient (we do, after all, really like to cook), I realized that nothing I was being advised to pursue fit the house’s personality. Which is how I found myself in the retro-renovation universe. And then I was advised NOT to do certain things because of “resale” value, but while I know I can’t predict the future, this is OUR HOME, a place we plan on being for a very, very long time, if not for the rest of our lives. And we want the space to reflect the spirit of the house and our tastes. And the closer we get to finishing the kitchen, the more it looks like it was always that way. (Fortunately, while the previous owners played it safe with their “updates”, they left the original cabinets, if not the original counters and appliances.)
We were so lucky to see a sale-by-owner sign in our neighborhood in 2009 for a 1954 ranch, only two owners who had done great maintenance but no updates. It was being sold as a tear-down, so we were able to get it below what we sold ours for.
With the extra $ we re-roofed, finished the hardwood, added new laminate counter-tops over the original kitchen cabinets, painted and freshened the landscaping. We’ve got original bathrooms, light fixtures, metal cabinets in the laundry and a Clipper exhaust fan in the kitchen! The original windows are in perfect shape, though not insulated, but we are working on adding low-profile storms as we go.
We love this house, get lots of compliments. There’s a great ranch on the next block that’s for sale as a teardown. Am so hoping someone rescues this house…
Way to go, Louisa! The house is so lucky to have found you!
Pam , I also want to thank you for the listings you highlight from ebay. We bought two Schlage Riviera escutcheons with the 5″ off-set for $5 each. They were the identical replacements for our front door.
We also bought the Griswold black mailbox with the brass ring that you ebay-featured, and I found a used Rejuvenation Otis light fixture myself on ebay, so our front door is looking pretty spiffy.
The original door was a great three-panel square, one light , but had taken water from the bottom and was warped. We got a blank fiberglass door and used Crestview’s 16″ sq. lights so the door looks very much like the old one.
We did take the old door and its hardware to the Habitat Restore and it sold the first day to someone who must be a much better carpenter than we are, so we’re happy it’s found a new life.
Thanks for the site and all the great resources you and everybody else brings. We had a good time searching for just the right items and then putting them all together.
You’re welcome! I love hearing how my finds get purchased and put to good use!!!! Send me some pics of your entry, Louisa — sounds fabulous!
Hey all,
I don’t think that this applies to everyone as I see a lot of comments that defy the statements in the article. I also think the days of real estate speculation of joe and jane homeowner are long gone. As a DIY-er and small contractor, I tell people to consider a few things:
First, Is your house a museum or do you live in it. An old friend of mine said this to me once, “I never bought a new shotgun” (he liked and used fancy ones)..”I couldn’t bear to be the one to put the first scratch on it” ! The Mrs and I have been slowly rehabbing – “Backdating” our 1959 Burton Duenke in StL. The arrival of our first child, now two, forces the thought process in a different direction. We have had to make updates and improvements that benefit the utility of the house. Speculation on values has long since been a mute point. But many of us here have saved homes form the wrecking ball and the Mac Monsters. Personally, we have plenty of house, almost too much to keep tidy. We bought at the teardown price, and by the way it was well kept and neat as a pin. Sure we did the kitchen, because we cook, serious cooking, another way to live in style for a fraction of gourmet dinning. We have done two out of three baths, one for guests.. endless stream of grandparents, and one for our daughter. We did floors, to cover or remove asbestos tile, and improve the over all appearance. But you go in knowing its going to get used and abused and someday even worn out. Indeed, we re-sided, out of necessity. Boring insects and weathered cedar was impossible to keep up with. Did the resale (bite my tongue) factor in. Yes the thought played a role in certain choices, but the main thing is having a home to be comfortable in that doesn’t consume you. I get frustrated when the dog scrapes his nails on the hardwood, I cringe when the baby runs the scooter into a corner, I fear the day when her art appears on the walls, I spaz out on my stainless, every scratch, fingerprint, and vulcanized stain. But I tell myself we live here, it is a home, and it is well loved.
Next, I think your readers are much more savvy, Pam. I don’t see too many of them running out to Home Improvisation for run of the mill home trends and fixtures, nor many who pay full boat for contractors. Your fine readers are looking for the things the others cast off.
Go find a set of steel St. Charles Cabinets in a tear down, stash em, and have them restored when you are ready to gut that 1980′s laminate kitchen. Let’s see, you just saved $5K. I found whole mid century home being gutted. A friend of mine took down the flagstone on the fireplace stone by stone. I got a 36″x 50″ mirror for 5 bucks. But your readers, know all about that kind of thing.
If you aren’t a DIY-er you should be. If I can do it anyone can. Say your just not that talented, or don’t have the time, then seriously spend some time before you spend any money. If you brought these stats and this current housing market back in time, when folks really DIY’d out of necessity, these numbers wouldn’t hold up. There is a world of thrifts and deals out there. I keep a list of future projects, and stash of bargain finds to make them happen, eventually. Three years ago, I found a $499 one piece Kohler commode on sale on Black Fri. Negotiated with the manager to take the display, and got it for $50. It sat for 14 mo. before we were ready to use it. CL has it all too. Overages from new job sites end up in Habitat for Humanity stores. Tradesmen, barter all the time for anything. I found an electrician that just wanted someone to take him fishing. I could give plenty more examples. Most folks just don’t think that far ahead. Some don’t consider their home as much of a hobby as we do. But I attest first hand, high end living can be had at a bargain discount if your willing to invest the time and energy. So even with bargains and barter, will you get your money back at time of sale? No, but you might break even, and you get to live in comfort and style, without having to make it back on the sale.
Sharing skills is a good idea too, you can frame and drywall, your friend can tile or wire….I have an Italian friend who told me that his father and his friends just trade off jobs to the point that material costs are all they ever pay and they usually have friends who sell the materials…..
Going over these comments I have to say I am pleased. I see comments that are uplifting in that the readership share the values of past generations. I would say a lot of us are products of baby boomers, who were products of the “Greatest Generation”. Some of us remember how things were a bit tight as children, moreover folks expectations, lifestyles, and needs were not even close to the trends today and far exceed those of the generation before them. A big part of this is this “having it all right now” mentality. Unless you are loaded, there is no reason to think that you need to gut every room before you move in. For some that makes more sense financially. But for most of us we could live like our grandparents. Buy a nice house that fits our needs, grow a vegetable garden, and stay there until assisted living. You have years to plan, save, and make strategic changes that fit your lifestyle. Its part of the whole screwed up mess we have now, this notion that a 1500 sq ft ranch isn’t enough for 2.4 kids and a golden retriever. Instant gratification, and unbridled greed, has gotten us in the big hole.
This notion that we must strive for MTV cribs. What a waste the monstrous manors are. Austerity is the word we should all learn. Ha Conservatism, there is one for you. How many folks claim this moniker and blow 75% of their income on a mortgaged Starter Castle or a hood ornament, like on the vehicle they paid twice as much for than one of equal functionality. Pam your readers share the tenants of reduce, reuse, and recycle. Funny how the “now” term “up-cycle has hit the trendy lexicon!
Bottom line brothers and sisters, we could all take a lesson form our grandparents, or the “Greatest Generation”. They persevered the depression and carried those survival techniques throughout their lives. But moreover, they make sense, and is just smart living. Thank God for them, those that took great care of those houses, and furniture, and pink bathrooms knowing that with care they’d last a lifetime. Those values are responsible for us being able to enjoy these awesome relics of the past.
I think you are a first time commenter, Mid Mod Jobs, so I am not sure how long you have been reading the blog. Yes, in general, there seem to be a lot of believers here in the idea that a house like gramma and grandpa had was both “good” and even, “good enough.”
LOL @ “Starter Castle” !!! I’ll have to remember that one – great description of the “gotta have it now” mindset.
We have a 1964 colonial and have put over $50,000 into improvements, plus many more megabux into maintenance. We converted our big screened porch into a four season sun room, and we gutted our master bath and replaced it with all new, up to date tiles and fixtures. We have all new roof, siding, HVAC and windows. With the housing crash, we might just break even on the original cost plus improvements, considering current market prices in our neighborhood. Only our four season sun room and the new master bath are likely to be attractive selling points, the rest of the house (dated, restored and serviceable) will likely be rehabbed by buyers who watch HGTV. Thing is, we did the work for US, not the buyers, so we have no complaints if we do lose money.
Things like new siding, roof, water heater, HVAC are all upgrades, but not particularly recoupable at sale. They are just things that make one house more attractive than a similar house without the upgrades.
Now, the 1963 time capsule in FL is supposed to be “an investment.” Mind you, the decor is pristine 1960s, which we want to preserve as much as possible. It was very well built. We got it at a magnificent price because it was sitting empty and deteriorating and the kids were tired of trying to keep up with it. So, it immediately needed the neglect taken care of, new roof, HVAC and plumbing and electric work. $$$$. We budgeted $30,000 to “bring the systems up to date.” That would bring the cost of the house up to the original asking price. Neighborhood prices were running about $20,000 higher for updated houses. At this time, though, prices are still dropping in that area.
Now that’s done we can look at making it work for us while we enjoy our winter escape and investment. Replacing the shag carpet which was loose but not in real bad shape was done after it tried to hurt me (tripped me and threw me on my knees on the cement floor, it did). Plus, I loved that look in the 70s, but am over it now. Unfortunately it was just plain cement underneath, not terazzo. We put warm creamy ceramic tile throughout. We took down part of a wall to open up the kitchen and then rearranged the kitchen, and we are adding a shower and laundry to the half bath off our bedroom. The laundry was actually on the back porch, not uncommon in Florida but not doable for me. I think that will do it, and will put our costs about where we expected. The house will be a lot more sellable, but we do plan to keep it and enjoy it as long as we can.
Way to put it, Pam!
If the stock market – or the US dollar dropped 43% we’d be screaming in the streets.
Imagine this.
You need a quarter so your kid can get a gum ball.
You give the cashier a dollar and she hands you 57 cents back!
Thanks for all the info – everyday!
Dana
(Repentant destroyer of 2 pink bathrooms)
All I know is I bought my little 1950′s Ranch house in a great location on the outskirts of the historic section in the City of Aiken. Some of the realtors and others thought someone with money would buy my house and tear it down….I bought it, and spent 50 grand on updating the systems in the house. From Roof to Drain lines. I still “thought” I had to redo the orginal bathrroms and put in a granite counter top etc etc….Now I dont believe that anymore. and Its a RELIEF…..so much easier to replace the new tile in my kitch with hardwoods? and I’m done. I kept the orginal cabs, had them refinished, and put on “new” vintage look alike pulls…will keep the faux butcher block counter top and the orginal bathrooms…so much cheaper…and such a relief. and they are not going to go out of style anymore than they already are! I dont care about who looks down their nose…I have come to peace with my little retro house, in fact I LOVE it!
Wow, so many wise people who are careful about how they spend their money – makes you wonder why there was a housing bubble
You folks in CA might not want to read this – we bought 25 years ago for just under $30K. (This is Michigan) 3 bedrooms, 1 bath, 2.5 car garage, small yard.
We’ve only spent on what I’d call maintenance – e.g. new furnace, new roof (did that myself) New non-retro appliances as needed.
The house was worth more 7 or 8 years ago than it is today, but it’s still worth more than we paid – unless you consider the interest on a 30 year fixed mortgage. We’ll pay off a couple years early, but we’ll still be behind when interest is considered.
OTOH, mortgage payments will stop, and all that money will go to remodeling/redecorating – until we have it the way we want it. We’ll be able to afford the renovations and they’ll be undertaken for our own pleasure, not for resale value.
Even so, I expect well loose less than 43% simply because we are going to do 98% of the work ourselves.
Though we have always made money on the houses that we’ve moved in to, fixed up, and resold, that was never our intention at the times of purchase. We bought the homes because they were what we were looking for. When we remodeled and decorated, we didn’t go ‘trendy’, we simply remodeled to make the homes more livable, and more of what we had envisioned. I have been told more times than I care to count, that we should remodel with resale in the back of our minds at all times. Maybe to some extent a homeowner should do that, but if plans are to live in a house for any length of time (and sometimes you end up staying longer than you expected to), I’ve always thought the home should be updated to suit the current homeowner, not with an eye towards what someone else may want. I don’t plan to live with white walls and boring decor to suit some future buyer. I’m the one living here now.
Keep things classic (I say the same thing about clothing), and make a home comfortable, aesthetically pleasing, and as livable as it can be. For you.
Don’t go into it expecting an investment. Do it because you and the house deserve it (or need it).
*quote*this notion that a 1500 sq ft ranch isn’t enough*unquote*
What’s funny to me about that comment is that I’ve always lived in ‘smaller’ homes (1700 sq ft or under). I’ve never found them lacking, but very comfortable and easy care (except during remodeling time ~ sigh ~). Some small homes do feel cramped and dark, but that’s generally not the square footage that’s to blame, but the layout.
I have never wanted a house so big that I feel isolated from everyone else in it. Besides, I don’t like to clean house that much anymore. lol Smaller homes are easier, in more ways than one.
Ah, the “greatest generation.” My WWII vet father and mother bought their first and only home in 1952 (1200-1400 sq. ft. story-and-a-half brick bungalow) and lived there until my dad retired (a teacher) at 55 in 1980 or so. They never did ANY major remodels. The most they ever spent was probably new living room furniture a couple of times, besides regular maintenance like a new roof, etc. They had the same linoleum floor and brown tile kitchen counters the whole time. BUT, they paid it off and raised three kids in the meantime. They retired to Florida to live in the home my grandpa left them. My dad is now 87 and has been retired longer than he worked!! That won’t be an option for most of us ever again!
I bought my first home in 1981 for $45,000 and my monthly mortgage payment was just under $800 (17.25% at the time!). I’m in my fourth home now and it’s a small brick story-and-a-half 1952 bungalow and my mortgage payment is roughly the same (a little less) with a 5.325% interest rate. As we sold and bought new homes (well, they’ve all been built in 1948-1952) any profits we made just went into the down payment of the new homes, so it’s really been an even playing field along the way (except my last home where my 2nd husband put a $65,000 2-bedroom/1-bathroom addition to accommodate all the kids). We lost money on that one.
Not really realizing until I started following this blog, but EVERY house I’ve bought has been as a second owner. I realize now why. I LIKE the fact that each house really didn’t have many updates and were all pretty much original to the late 40s/early 50s time period that they were built. I just wasn’t attracted to homes that had multiple owners and MULTIPLE updates from multiple periods of time. Weeks away from finalizing my 2nd divorce (not to be a “Debbie Downer”) and I’m living in my bungalow by myself. It’s just the right size and easy for me to manage and do updates. I used to joke that I’m middle aged and in a starter home, but it’s more realistic to live in a smaller home as a “finish” home. I’d much rather spend my time doing things I enjoy than worrying about how I am going to take care of my home. Although I just discovered a roof leak and need to deal with that. ugh.
Wow! What a great topic. It’s so interesting to hear how others are riding out this depressed housing market.
I really am thankful for this blog and finding it. I used to look for the faults with my house but now I think of all the great things about it. And when I want to redecorate, I go with what I like and keep it as cheap as possible without losing the effect I was going for. For example, I used some free white tile and added some not too expensive delft tiles as accents in my kitchen backsplash. It’s homey, old fashioned, unique, and not a bit boring.
Also, I’ve always complained that we never made any money on our houses when we moved for job reasons. But I am so glad we were able to stay in this house for 16 years as opposed to the 2-3 year average in our previous houses. And as I mentioned before, I’m loving it more each year.
I’m struggling with this dilemma now. We moved 2 yrs ago due to a corporate relocation & we lost a TON of money on the house we sold (close to $90k). As a result we bought a house that is dated & needs some help.
I’ve always been the kind to say, “If I’m going to do it, I’m going to do it right.” So I buy the more expensive windows & doors, I insulate the heck out of the place, and I stick with the same level of trim on the outside.
We have the money to do a dormer addition, and we need the extra light & space & air circulation upstairs. We never plan to move – I’ve told my company that I’m staying put (and since that was my 3rd move for them, I’m well within my rights). But I almost want to cry when I think of the money leaving our savings and never coming back.
I can’t say I regretted the previous homes & the work we did on them, but I know we’re $90k behind where we would be if we’d chosen to rent. It’s making it hard to feel good about renovating again – even though I want to.
I know I am a day late to this conversation but wanted to add something about the “starter home”…do other people on this site think that the whole concept of a “starter home” is a crock? Or do you all support that idea, of buying small and then “trading up” later on?
I am 28 and my spouse and I just bought our first house, a 1968 rambler with a walk-out basement…4 beds, 3 baths, 3 living rooms (ha!), fireplace, 2-car garage, deck, patio…because the basement is finished, the whole place is approx 2,300 square feet.
We got a steal of a deal on this thing! This is not a starter house! We decided that, since we are young with student loans up the wazoo and the economy is…unpredictable at best, we should find a house that we could LIVE IN for a loooooong time. This meant that we had to expand our search outside of our beloved city limits and find something in the (gulp) suburbs. Yeah well who knew living in the suburbs was so awesome! We love it! (I know there is a lot of support on this site for pro-suburbs.)
Coincidentally, we both got pretty sizable pay increases after we closed on the house. So instead of paying $1,100 per month (which is what our mortgage is), we pay $1,400 a month and plan to make an extra payment at tax time. It’s a great feeling to look at that total the next month and see it actually MOVE.
So, the starter home…isn’t that just a concept coined by the real estate industry anyway? Or am I totally off on that one? What happened to buying a house that you can raise your kids in, retire in, even die in? (Because it’s a rambler, we really could grow old in this house, minimal stairs and whatnot.)
Anyway, I don’t want to make anyone mad or step on toes. Just voicing my humble opinion.
I for sure have an opinion. Maybe we should do a whole different story about this topic….
Recently wrote about the joys of my 70s suburban neighborhood on my blog. Moved there for the same reasons you did–it’s practical and affordable. I can’t believe there aren’t more people who’ve figured this out! (Well, I predict it’s the next big thing…) We got a great house for a great price. Our only complaint: The “updates/upgrades” that are the topic of this post. We’re the 4th owners, and we’re trying to figure out what to restore, what to keep, what to go new with, and where the sanity line is (so we can walk it). We hope to be where we are (and love it) for a good long time. I see myself only making one more move in my life–to a smaller place once our kids are grown and gone. Maybe that’s the ender house?
Hi Rita, see my recent story on 70s houses being the next big thing: http://retrorenovation.com/2011/10/10/renovating-1970s-houses-the-next-big-thing/
I say: Renovate 70s style. That way, your interiors will always be “dated” to your house.
Great topic. We had our modest ’59 ranch on the market for awhile this year. We don’t have to move, we just would like to be in a similar house in the same part of town that has a better floor plan and more garage space or a basement for my husband’s hobbies. We took the house off the market after a few months when we got so little interest. We knew going in that any profit that we made on the place would go toward the agent’s fee, but, we had been willing to do that to get into a house that would meet our needs better. But when we realized we’d be dipping even deeper into the equity to cover that fee plus closing costs on the next place, which was also going to have a bigger price tag, we got less interested in moving. On top of that, most of the houses we were interested in had had kitchen and bath renovations that we disliked, with ceramic flooring in those giant squares that seem way too big for the size of the room. Those renovations were a big reason why the houses, which were similar in size and location to our current house, had the bigger price tags. I found I can handle living in a house that has an old kitchen/dining area I don’t like. But I can’t handle moving into a house that has a newly renovated kitchen/dining area I don’t like!
Oh — so we took the house off the market, and our Realtor was great about it. She thought we gave it a good try. Now, we have a bunch of stuff in a storage unit that we cleared out of here to make the place look better, and we don’t want to bring it back in because we love how open and clean the house feels now. So, I think we will do like Gavin shared in a different post, and dispose of things and feel less burdened. It certainly makes this house much easier to live in.
Interesting this topic came up yesterday. I bought my 1946 house 8 years ago,I was in my 20′s and making a lot less money than I do now. I had my heart set on a descent 40-50′s house in a nice neighborhood that was mostly original.
This was back before the bubble really grew,but even houses then were selling within a few hours of going on the market.I had my heart set on a couple neighborhoods in particular. I wanted a keeper house. I put an offer on a few houses,one a time capsle that even though I bid over asking price,someone came with a cash offer. (Turns out a flipper who renovated it and made it a rental..then selling it. aaargh! At least I got the Youngstown cabinets off the curb )
I ended up “settling” for my house. It’s not in the greatest location,and had had renovations over the years. Oh well,it had potential and I figured it was a “starter” and I could fix it up and profit to trade up to a house I want in the neighborhoods I wanted.
While the boom was in full,I felt like a fat cat,and was VERY happy I bought when I did because I’d be renting.
Fast forward to now,I look online at houses for sale in the neighborhoods I wanted,now they are dirt cheap and have been on the market for months. Interest rates are also down. Houses I could only wish to have are well within my reach-If only I didnt have to sell my current house! Good luck doing that now and have enough to pay realtor fees and closing etc.
Frustrating,but at least I’m not upside down or lost tons of money like some of you guys have. I don’t feel quite as bummed now.
If you are not upside-down, then why don’t you try to sell and move?
Good question. It’s something in just the past few days I’ve started to really consider. I need to stop speculating and being discouraged ,and look into it to see if I can pull it off.
There’s a semi- time capsule 1940 house in the neighborhood I originally wanted to be in that’s calling my name. My sister and her fiance really like my house,I’ve been putting the bug in their ear to buy it the past couple days.
If you can sell directly to your sister, you would avoid real estate agent commissions….that’s a 6% saving (as I recall) that you could “split” with your sister as an incentive right off the bat!
Great post, Pam. Another point to consider is the life time cost of the loan. We bought our house (in Iowa) in 2006 with a considerably higher interest rate (6.75%). When we decided to do some work on it, we were able to refinance with a modest cash out (to do the kitchen) at a much lower rate (4.8%) and a shorter (20 vs. 30 year) term. By doing that, we are actually paying $32K less over the course of the loan and will have a new/old kitchen to boot.
And just as an aside, every one thought we were crazy when we left Seattle to go to Iowa, citing, among other things, the fact that housing didn’t much appreciate here. But we were buying a home, not something to flip, something we could never have done on the west coast. And you what? In one of the worst economies we’ve seen the value of homes in our town has significantly increased … by nearly a third in many cases. So sometimes when you buy a home for all the right reasons (a place to live!) rather than to make money, you’ll do okay. And we do so love the house we’re in.
Ugh! I cringe when those realty shows have prospective house buyers whining because the kitchens have formica instead of granite and stainless. All for show! I’ll let the next owner of my home worry about the house being current and trendy. I intend to stay put until I fall off my perch. All my money has gone into basics – roof, furnace, etc. The houses in my neighborhood that have gone up for sale have been priced too high, I believe that the owners are trying to recoup reno dollars – the emphasis is placed on New, New and New finishes.
Hi Lauryn!!! I think you must be the one I know who made that same move to Iowa.
I love this blog but have never posted because our new historic house is a 1909, so many of the style tips here don’t really apply. But the advice to stay true to your house is right on! We have lots of infrastructure work to do, so our budget is going to roof, electrical, etc. But after that if any money is left we are turning to the tarted up kitchen asap. Luckily they didn’t put in anything really pricey that I will feel guilty ripping out, but the faux French is really unlovely and way too frilly for the clean Arts and Crafts lines of this place. I will probably leave in the fake Victorian window trim and molding because thankfully it is confined to the kitchen and only about 2 decades off period for this place.
Most of this house has been left alone except for what must have been some wild paint colors over the years. Red! Green! Chartreuse! The baths are newer but renovated obviously for love not resale, and I like them as they are.
Welcome to commenter-club, Lisa! I would LOVE to tour around Iowa some day!
Okay, I knew a fair number of Lisa’s in Seattle (which is where I’m assuming you’re from!). Hints, please???
And welcome to a great — and my personal favorite — way to see your day slip away! Love, love, love RetroRenovation!!
I’m the parent of Julian — that might be enough hints. Love RetroRenovation! I usually take it in small chunks throughout the day because I peek in at work.
And so odd, because “Iowa” (your particular quadrant, even) and the name Lauren/Lauryn have come up multiple times for me today in different venues. Must be in the stars for us to connect like this.
Thought it might be you!! Shoot me an email at our website (still the same one). And give Julian a hug for me.
And Pam … do come to Iowa! Lots of great mid-century homes here, not just old farm houses (which are wonderful too).
Hello! I just stumbled across this blog while doing some reno research. Great blog for resources!
My husband and I recently bought an architect designed 1958 mid century. The home had only one owner so the original mahogany cabinets and vintage yellow bath fixtures were all still here. Unfortunately, they had done some remodeling – they put granite in the kitchen, and some unattractive tile on the fireplace surround. They also installed wall to wall carpet, a giant wall of mirrors in the dining and kitchen, and put awnings (!) on the wall of glass windows. No wonder we got a bargain! So far we spent money to restore the hardwood floors and resurface the concrete on the lower floor. I felt it was worth it to do those things while the house was empty. We also did some needed plumbing and electrical updates, roof repair, installed a new furnace, new w/d, new tankless hot water heater, and sump pump. Those were things that were upkeep/repair of old, worn and dangerous items that came up during the inspection. In decor, we managed to remove the ugly fireplace tile – underneath was a gorgeous original concrete treatment. The awnings and mirrors came down, and I’ve carefully patched and repaired the tile, the wood walls, touched up paint, replaced hardware, replaced hollow core doors (hate those). It’s really fun for me to do. So far, I would expect to break even on all these things since the sale price was below market (due to the house needing all that stuff, plus the ugly mirrors and awnings
.
We really wanted to update the kitchen and bathrooms. We would do a careful job, keep what we could and stay true to the house, same footprint and character, it’s just the appliances are over 20 years old, and the leaking (just a tiny bit) fixtures in the bathrooms need replacing. Once you start looking at plumbing, it has been my experience that you end up having to open up the walls and floor — there’s always a leak hiding somewhere.
With a 56% rate of return like cited here, we decided to do what repairs we can and wait for the economy to improve. The only problem with that is the deals to be had these days on fixtures and appliances, plus good plumbers, carpenters and electricians are available and eager for work right now.
I think if your house has character, it’s important to keep and restore that. Thanks for having this blog with so much information on where to find the materials to do so.
Welcome, Christa, it sounds like you have a gem of a house and that it has gem owners! Hey, be careful with the *u*-word, though, because there are lots of us that luv our awnings and walls o’ mirrors. It all just depends on your house and taste! Re renovating the kitchen and bath — I would always tend to advise live in your house at least a year before you go gutting anything — you can’t undo it — lots of regrets. Unless there are enviro or safety issues, of course! And, start hanging out here, dear, we’ll have you loving those old appliances in no time!
Thanks for the welcome. No offense intended to awnings and mirrors in general, just mine in particular. Imagine purple scalloped awnings on an Eichler A-frame type of window, and you may understand why I thought it wasn’t quite right. And wall-o-mirrors glued over mahogany paneling — not a great remodeling choice for the home. If I could learn to love those appliances, it certainly would save me some time and money.
I’m not worried. We bought our house in 8 years ago and it’s still worth more than we paid for it.
In addition, we’re not going anywhere. This is the house that our kids are growing up in and someday, when my husband and I kick the bucket, we’ll just leave it to them. That’s our plan, anyways.
I’ve never had the “resale value” mindset. My idea is to maintain the 1958-ness of the house and keep it in good condition. We’ve installed a new roof, insulated the house, switched from an oil furnace to a gas furnace – and some day we’ll replace the windows.
I’m curious – does anyone else not care about “resale value” when making decisions about their houses?
Well, Claudia, when my ex walked in on my reno once he said…..”Well, you’re certainly not worried about resale.” So, no I didn’t worry about it, but I also know that given a month I can make the place generic market ready just like all the other houses I’ve had or leave it alone outside of fresh neutral paint and accept a slightly smaller buyer pool.
Like you, I plan on leaving it to my son….if it’s long enough then it will most likely be sold to someone who’ll level it anyway…..there are two wee places a couple of streets over that are being sold as building lots for 26,000 less than this house cost. Transitional in town neighborhood by the river so I suspect all the older houses are on borrowed time. Sad.
NOPE!
I have owned 2 homes…one for 23 years and this one; the last stop, for 8.
My ex-realtor called my style….”Dollhouse”, and it seems to appeal to many.
If your State offers it: I hope everyone has an Act of Homestead and a that your property is in a Trust.
People in this country have short memories and, once conditions have changed, they soon forget that they were ever any other way. Historically, people have bought homes in order to have a place of their own to live in, not to flip them and make money. Under ordinary (non-bubble) conditions, you have to add value to something in order to increase the price – and, even then, there are no guarantees. Flipping houses is no basis for an economy. It’s an aberration that soon runs its course, as we’ve just seen, and leaves destruction in its wake. We have to change our thinking and stop viewing our houses as investments that will sooner or later make us rich. House prices will, in general, never return to what they were when janitors were buying million dollar houses and trying to resell them at a profit. Those house prices were inflated vastly beyond the actual value of the homes or of anyone’s ability to pay for them. If you think those prices will ever return, ask yourself this: what would it take for that to happen? The answer is that it would take a huge drop in unemployment and everyone to get enormous raises. Just how likely do you think that is?
I’m smack in the middle of a renovation of a 1950 bungalow (bought 2.5 years ago) and I’m getting that money pit panic feeling. The home inspector either missed or didn’t mention some major problems that would’ve made me back out of the contract. I saved for 2 years to fix what I was told were “minor” cosmetic issues and restore the 1950s charm that was stripped away in a 1970s remuddle.
It turns out the whole foundation needed fixing and there are more things than anticipated on a very long list. It all has to be done. I’m doing a lot of weather proofing and I already added insulation, solar screens and a new electrical panel.
The good thing is I picked an excellent neighborhood and an otherwise great little house. I know I won’t get all of the money back and that most of the big-ticket items are things people will never see, but I’m making the house livable for me for as long I’m there. I don’t plan to sell any time soon, and if I had to sell, I wouldn’t be able to without having all these things fixed anyway.
So one way or another, the money will be spent. I choose to spend it to make the house what I want it to be.
You are doing good by this house..
Pam, I truly understand why people are so upset these days with housing prices and many have been hurt including members of my family and myself (sold condo in FL for 15% less than we paid in ’88 but in FL, three-quarters of the state is underwater … and my father-in-law is turning 97 and doesn’t want to go back).
On the other hand, let me offer this comparison. Put $20,000 into the minor kitchen remodel, enjoy the new room for 5+ years and it will cost you $5,000. Instead of remodeling your kitchen, buy a new car for same $20,000 and 5 years later you’ve lost more than $10,000.
If you eliminate the housing bubble and look at trend lines from 10 years ago, they’re mostly still positive but only the 3 to 5% growth that’s been true for many (pre-bubble) years.
PS Fun seeing you hear after our fun at BlogHer.
Over the past 100 years, home prices have, on average, risen only 1% more than inflation. And, I don’t think that calculation takes into account the cost of maintaining of home and paying taxes on it. Another story to come on this topic. The point of this particular story: Don’t think of remodels as a way to make money, they are a way to lose money. Note, I was not at BlogHer….
I wonder how gentrification of neighbourhoods would factor in.
If I look at the house we had before we moved to the country we bought it for around 150,000 but it’s worth, or, more correctly, would sell for around 550,000 or more now as it’s become a very hot area of town.
Yes, clearly there are exceptions. Averages are averages…there are homes that will do much better, homes that do much worse…Hence the 3 most important features of real estate: location, location, and location.