Everyone seems to have nailed it.
You generally get a better return on remodeling kitchens and baths. But, I wouldn't remodel just to sell a house. That's crazy, especially in this market where people look past things like out-dated kitchens and baths.
Today's buyer wants a clean house that doesn't have a lot of fixes. (My, how a few years can make a difference.)
A more relevant question in this market might be: How realistic do sellers have to be?
There is an inventory shortage. We know this. However (dramatic pause), I recommend sellers price realistically - especially because sales of higher priced homes are not flying out of the MLS (at least for the moment). For homes $200,000 and below, Realtors don't even have time to get a sign in the yard. The million and above are doing well. In between? Not as sweet as those sweet spots.
If you want to sell a home at $300,000, adding to the price (by including granite counters and painted cabinets) might be precisely the wrong strategy. In fact, pricing closer to $250,000 is a good strategy. With so many agents and buyers out there looking, what happens? Maybe a feeding frenzy (which is a good thing for the seller)?
I've worked the sellers who were just so determined to get "their price." We price what they hope to get. Then the house sits ... and sits. If everyone in the neighborhood has nice floors, updated kitchens and nice paint, you should be asking why is someone going to pay more to the one person who is out of step? If the price is too high, the traffic thins out. Then nothing happens until ...
Invite your Realtor to tour your home. Have the Realtor do a market analysis. A good Realtor will show you what is realistic and has the time to discuss marketing strategy.