There was a time just three years ago that no one would consider a luxury kitchen upgrade without considering granite counter tops and stainless appliances. Oddly enough, when the market turn a turn for the worse, neither of these upgrades brought much to the resale value of a home.
The primary reason for this was of course the gut of distressed properties, and the rapid decline in properties across the board. The added value of such upgrades is impossible to measure relative to the decrease in overall property values, but it is safe to assume these properties did retain some value, or were at least on the market for a shorter time; however the fundamentals of real estate decision making were of greater importance in how quickly properties moved (location, square footage, etc.)
Now that real estate has turned the corner, and prices are on the rise (if only slightly), kitchens and bathrooms are once again playing a role in the maximum value of a home. If you are considering selling your home, it is an upgrade worth considering. It should, however, only be considered under some conditions.
1. If your property values have declined below your remaining balance of your mortgage, you should not consider doing a major kitchen upgrade. It is unlikely to increase the value equivalent to the investment.
2. If you have equity in your home and values have not declined dramatically, it may well be worth considering a remodel of your kitchen. This depends, however, on the comparable listings in your neighborhood. If competing properties have upgrades, the value of your home will be minimized in comparison to those homes. If competing properties have not been upgraded, the value of your home will be less adversely affected.
3. If you must sell your home quickly because you are carrying another mortgage, an upgrade will likely help to sell your property more quickly. In addition to the selling price of the home, it is important to also consider the cost of paying for a mortgage for a longer period of time. Kitchen upgrades can often be done at a cost lower than two months of the typical mortgage payment. If the average days on the market for your area exceeds 60 days, and lowering the price of your home is not an option, an upgrade may indeed help to speed up the sale of your home.
So while there was once a time when upgraded kitchens were a “no-brainer”, times have changed. While there is still value in kitchen upgrades, the cost of such an upgrade must be weighed carefully based on the individual circumstances.
If you are not yet sure if you are ready to sell, but believe you might in the next few years, I’d like to suggest you consider doing the upgrade while you can enjoy it. Many of my client have performed upgrades only when trying to sell their home, and regret having had the opportunity to enjoy the upgrades themselves. You deserve the update more than the new owner!!