Dec. 9, 2005: In the Phoenix real estate market, home improvements don't necessarily mean a higher selling price
Most home-improvement stories are substantially improved.
When your new neighbors brag about how much extra they got for the remodeling they did on their last house, they know you're in no position to check the facts. They're not being vain, it's just that every story gets better with age.
Here's the truth: Home improvement is usually not a good financial investment. Instead, remodeling will normally have lifestyle value as you use and enjoy your improvements while you live in the home, then pass them along to the next buyer at a discount.
How big a discount? You may get dollar for dollar for tasteful upgrades to kitchens and bathrooms. A well-maintained pool can trade at its replacement value. For everything else, you'll do very well if you get 50 cents on the dollar.
There are ways to improve these results. The worse shape the house is in, the greater the relative value of intelligent remodeling. If you can upgrade the market value of the property at the same time - for example, adding a master suite to a two-bedroom house - so much the better.
On the other hand, it is possible to spend a lot of money and make the house worth less. I was in a home where the sellers had redone the kitchen with black marble tile, black cabinets, a black porcelain sink and, as the crowning glory, black Corian countertops with bright red accent stripes. They couldn't understand why they kept getting low-ball offers.
A house is worth what it is worth to a buyer. If you overimprove for the neighborhood or if you make improvements appealing only to eclectic tastes, you will cost yourself money.
If you do things that essentially unimprove the structure, such as do-it-yourself garage or patio conversions, you will cost yourself money. And no matter what you have done, your home will probably sell for just about the same amount as comparable neighboring homes.
What you tell the folks in your new neighborhood is your business.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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