Despite a lot of discussion surrounding the ways in which the housing market is cooling, many homeowners continue to experience equity gains from their properties.
The pace may have slowed somewhat, but property values are still appreciating on a year-over-year basis, especially in markets where inventory levels are tight. The latest edition of the Market Pulse, from real estate analysis service CoreLogic, explored the notion that pent-up supply and demand might be "the new normal." That means that in a recovering economy, where new home construction rates continue to lag behind historical levels, there's a lot of bubbling interest from buyers biding their time. This is a good thing, especially given the theory that all the so-called shadow inventory - homes stuck somewhere in the foreclosure process - will eventually become available to prospective buyers.
But for now, many regions have only so many properties to offer, as many current homeowners continue to reap the benefits of their appreciating property values. While they wait, anticipating that the market will eventually be flooded with a greater level of supply, many are investing in home improvements that figure to only further enhance the sales prices their residences fetch. The best way to ensure a return on such an investment, of course, is to not spend too much on the front end. Here are a few cost-efficient remodeling options you can explore as a homeowner in the interest of accruing more internal value, whether your ultimate plan is to sell or capitalize through a home equity loan.
- A fresh paint job. You don't need to go all-out and redo the entire exterior of your home in order to squeeze additional value out of it. Instead, you may be surprised how dramatically improved a single room can look with a revitalizing coat of paint - and that small investment can factor greatly into the overall value of the home. Similarly, you can touch up the front, back and side doors - maybe the shutters and trim - for a few hundred dollars and greatly enhance the home's curb appeal. Not only will these efforts make certain features of the home look younger and refreshed, but it can also serve as a way to mask minor imperfections.
- Creating extra light. In most cases, replacing or installing new windows is a more cost-efficient option than adding more light fixtures, especially if the goal is to improve the level of natural light in the home. Aside from generating a cozier, more expansive feel within the space, natural light can also help limit the use of other utilities, making a home more efficient. According to Redfin, DIY window replacements typically cost between $200 and $600 - a relatively modest expense given the potential payoff. The window type, such as whether it's single- or double-paned, and size will play large roles in determining the cost, but given the budding demand for eco-efficient homes, any home improvement measure that serves to reduce a property's long-term carbon footprint is a worthy one.
- Adjusting floor plans. One of the most pivotal features of a home's interior can be the flooring - particularly that of the bathroom and the kitchen. If either is beginning to wear or looking less than appealing, there are a number of approaches you can take in the interest or remedying the situation. But perhaps the most cost-efficient option is to re-tile, which you can probably handle on your own for under $2,000 depending on the size of the room in question. Professional services might be worth looking into, but if you have the time and resources, you can manage to significantly upgrade the appearance of your flooring at a relatively meager cost.