How to make your home worth more in 2007

How to make your home worth more in 2007

Amid soft demand, improvements require focus and a bit of elbow grease.

By Maya Roney

Boosting the value of your home is never an easy task. It takes time, money, and — when your kitchen's covered in plastic tarp — weeks of pizza delivery. And with home prices still sliding in many parts of the country, getting a return on your investment is now tougher than ever. Luckily, there is a secret to smart remodeling in a buyer's market: Do as much as you can with as little as possible.

Homeowners may have learned this lesson last year, when big spending on home improvement did not lead to big profits. According to Remodeling Magazine's 2006 "Cost vs. Value" report, prices for most remodeling projects increased last year while their resale value decreased. Major, mid-range kitchen remodels, at an average cost of $54,000, returned just 80.4% in 2006 vs. a 91% return on $43,862 in 2005. Even the most profitable project in 2006 — upscale fiber-cement siding replacement — recouped just 88% of its total cost.

Americans spent $155 billion on home improvements and repairs in 2006, a 2.8% increase over 2005's total, according to Harvard University's Joint Center for Housing Studies. The Center estimates that we will spend over $160 billion in 2007, but if resale prices continue to lag behind remodeling costs, the pricey projects won't pay off.

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