The housing market is becoming a seller’s market again. Home values are on the rise and optimism abounds. Actually, according to, the housing market saw an eight-month high in July, evidencing that the economic recovery is officially back on track.

Experts actually predict the housing market to keep climbing in 2015. Altos Research predicts a 7 percent increase in 2015.

While some would assume the housing market increase would only impact real estate purchases, this overall optimism is actually fueling renovations, too.

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BEFORE: Kitchen remodels typically offer the highest return on investment. (Carlos Reyes, Renovation Design Group)

Transforming the American Home, a research study that surveyed 200,000 homeowners worldwide, states, “While people remain cautious about the economy overall, 74 percent of U.S. homeowners say the housing market in their area has improved in the past year. This sentiment is highest among homeowners in the West (85 percent).” The study shares that homeowners who reported an improved market are more likely to be planning a remodel (42 percent) than they are to cash in on the increased values by moving.

We found that interesting but not surprising. Improved markets give people more confidence to invest in their own homes. If your home is building equity, remodeling will essentially increase that equity even more down the road when you receive the return on your investment.


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AFTER: Kitchen remodels typically offer the highest return on investment. (Trina Knudsen, © 2014 Trina Knudsen, Photographer)

However, it is important to understand that the ROI doesn’t happen overnight. It generally takes time to see the return from a renovation investment show up in the equity accrued in your home. This is the difference between a thoughtful home renovation and “flipping” a house for an immediate profit.

Contractors who intend to upgrade a house for immediate resale need to limit their work to more cosmetic improvements. This results in higher quality finishes (such as granite counters and extra trim and molding), but the basic underlying problems (such as worn-out infrastructure and poor circulation) remain unchanged. If you are shopping for a new home, make sure you are not blinded by the bling, but inspect the quality of the work and think practically about how the house will function for your family.

Home renovation is a bit of a balancing act. It is important not to overbuild for your neighborhood. In the real estate world, it is better to be the most modest house on the block than the biggest McMansion. If there are no comparable houses to yours, then it is hard to determine your home’s value.

Overbuilding so that you have a house significantly larger than the other houses in your neighborhood could actually hurt your home value and make it impossible for you to eventually recoup your investment.

The best approach is to talk to a real estate agent before you plan a remodel to determine what changes or improvements to your home would be the most impactful in terms of real estate values. It is also critical to understand the current value of your home and what the market in your neighborhood will bear in terms of home prices; this will help set the budget limits of your project.

Many of our clients visit with a real estate agent in the beginning design stages of a home renovation. This piece of the puzzle definitely helps a homeowner decide what is best suited for the location and what improvements will positively impact the property’s value.

The improvements you choose to make to your home should not only make sense to your Realtor, they must also positively impact the daily life of your family. The Houzz survey determined that 66 percent of homeowners who are remodeling are planning to stay in their homes for the long-term. While 53 percent also state that they also have the remodeling goal of increasing the value of their home, they have no plans to cash in soon on that investment.

Remodeling is more than a financial investment; it is also an emotional investment. In the end, we find people choose to remodel rather than to move because they like where they are and want to stay.

Overall, good news about the recovering economy and the housing market is great to hear. Good news in the housing industry is good news to us. If you plan to remodel, consulting with experienced real estate and design professionals will result in a master plan that will assure that your investment will be in line with the housing market in your area.

Ann Robinson and Annie V. Schwemmer are the principal architects and co-founders of a residential architectural firm focused on life-changing remodeling designs at Send comments or questions to

Renovation Solutions: Housing market impacts home remodeling