How to make your home worth more in 2007

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Given last year's smaller returns, the forecast for increasing your home's worth in 2007 may still not look promising, but your specific situation may put you at an advantage. "Many factors affect a home's value and, consequently, the resale value of any given remodeling project," says Pat Vredevoogd Combs, president of the National Association of Realtors, in reaction to the 2006 "Cost vs. Value" report.

As always, your local real estate market is one important factor to consider before remodeling your home. Last year, homeowners in the Pacific region (Alaska, Hawaii, Washington, Oregon, and California) saw the highest percentages of remodeling costs returned in resale. Minor mid-range ($19,000) kitchen remodels in that region recouped 106.4% of their project cost in resale, while mid-range ($15,000) bathroom remodels had 103.2% returns.

In general, hot markets, such as Seattle — which is expected to see a 3.6% increase in median home price and 4.7% jump in housing starts in 2007 — usually see higher returns on home improvement projects.
A good agent can spot buyer turnoffs, advise you what to improve, and figure out your home's true worth based on the local market. If you have made all the necessary improvements and you still don't like what you hear, simply wait for the storm to pass, and in the meantime, enjoy the fruits of your labor.

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"Real estate will always be a safe investment," says Rizzo. "If you can hold on to your property during the market's current state of softened appreciation, you will see the market turn in favor of sellers in the not-so-distant future."

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