Nothing sells a house faster than a hot market. Just ask anyone who sold in the sizzling '70s, a decade during which prices for existing homes soared 170% across the nation--27 points higher than inflation.
But the party's over.
In fact, for much of the country it ended several years ago. Despite strong regional gains in California and the Northeast, median prices for existing homes actually declined slightly during the '80s, after accounting for inflation.
Now we're facing the '90s, when house prices, at best, are expected to eke out a one-point gain over the consumer price index.
Whether you plan to sell your home in six months or six years, you face the challenge of getting top dollar in a slow market.
Making your house stand out can be as simple as laying on a new coat of paint or as ambitious as knocking down walls to enlarge a kitchen.
If your house is in need of real repairs, attend to those first.
Before you pick a project, check out what your neighbors are doing and what features are popular with buyers of new homes in your area. Above all, make only those changes that please you.
Adding a third or fourth bedroom or a second bath is likely to be a good investment. Changing lifestyles indicate that extra rooms may be used as home offices, exercise rooms, home entertainment centers or separate apartments for parents or returning children.
Overall, don't spend more than 20% of the value of the house on remodeling and upgrading, recommends Carole Eichen, of Carole Eichen Interiors in Santa Ana. The cost and pay-back for individual projects will vary widely, depending on your market. Here's what to expect:
Kitchens: Buyer interest in modern kitchens is high. If your kitchen is 15 to 20 years old, a make-over can pay off handsomely.
Remodeling newer kitchens may improve salability but won't pay back as well. Your return can vary from under 40% to over 100%, depending on your market, the age of the kitchen and the size of the house, according to Remodeling and Qualified Remodeler trade publications. Estimated cost: $10,000 to $24,000.
Bathrooms: Adding a second bath is a big selling point, particularly if you have three bedrooms or are adding a third or fourth bedroom. Sometimes, an additional bath may even increase your home's value by nearly twice the cost of the addition. The return from a third bathroom isn't as great. Estimated cost: $3,500 to $11,000.
Master bedroom suites: Sometimes a combination of two smaller rooms, these may include a Jacuzzi, exercise room, home entertainment center or kitchenette. The expected pay-back is about 80%. Estimated cost: $21,000.