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The MG Group Chicago

Real Estate News for Chicago, Suburbs, and Beyond

By Mario Greco | Broker in Chicago, IL

Remodeling Your Home? Follow The Trend And Aim For Practical Over Glitzy

People will still remodel their homes in the coming years. But the odds are that they’ll be more practical about it.

At least that’s what Abbe Will, with Harvard University’s Joint Center for Housing Studies, recently told Chicago Tribune real estate columnist Mary Umberger.

According to Wille’s research, those dramatic housing renovations – the ones many homeowners took on during the heights of the housing boom – are becoming less common. Instead, homeowners are taking on smaller-scale renovation projects that don’t cost a small fortune.

Here’s an example: Instead of gut-renovating their kitchens and installing top-of-the-line refrigerators, ovens and countertops, homeowners are more likely to refinish their existing cabinets and paint their kitchen’s walls. If they’re splurging, they may buy some new faucets for their kitchen sinks.

There are two main reasons for this: First, the economic downturn means that homeowners have fewer dollars to spend.

Secondly, the housing market’s correction has sent the prices of condominiums and single-family homes falling, even in strong real estate markets like the one we enjoy in Chicago. This means that home sellers can’t expect to increase their asking prices by tens of thousands of dollars just because they paid for a costly master bedroom remodel.

The big-ticket remodeling projects – even those that create sparkling new kitchens, bathrooms and master suites – are no longer bringing in the big bucks at resale time. It’s true that these renovations will still increase a home’s value. And they may lessen the amount of time it takes to sell a condo or single-family home. But it’s more difficult than ever for sellers to nab a big enough price increase to justify spending the big dollars on a top-of-the-line renovation.

Now, those homeowners who want to splurge on a kitchen or bath remodel because they plan on living in their homes for 10 years or more and want to enjoy their time there as much as possible? That’s a different matter. Homeowners renovating for their own enjoyment, and who aren’t thinking about resale value, can do what they want with their money.

All others? It’s best to think a bit smaller when it’s time to tackle a renovation project.

Comments

By Jerry Cibulski,  Thu Feb 24 2011, 05:37
I have seen the same trend in our market. People are looking at finishes and materials that are classic and long lasting instead of trendy. They are talking about past investments that became outdated in 10 years and had to be replaced again.
By Timothy M. Garrity,  Thu Feb 24 2011, 05:42
Practical sells these days. Buyers don't want to pay for expensive upgrades in which the seller expects to recoup his/her money on.

They want a deal.

TG

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