I have the same nagging doubt everytime I think about how much I'm spending. It feels like a small rock in my stomach. But I try to chalk it up to knowing that I am "frugal" by nature and always worry we won't have enough money should some disaster come along.

Even though we haven't gone beyond our reach, and I love the kitchen, I worry about recouping if we sell and if we should of put that money to better use somewhere else.

Hopefully I'll put away these worries with time **fingers crossed**

My neighborhood is a "formica" area and I had the same doubts about putting in an expensive kitchen considering that I likely won't get my money back. I figure that because the real estate market is terrible right now, we're going to be stuck in this house for a while longer and I wanted a nice kitchen. We really haven't spent that much because we've done everything ourselves, except the granite. The things we spent the most money on, appliances, we can take with us when we sell. The new owners will benefit from the granite because I can't take that with me. lol

I feel pretty good about our kitchen and what we've spent.

I guess it depends. We bought pre-bubble so we have lots of equity. And our original 1963 kitchen was definitely hurting resale value.

We plan on retiring in this house - so resale value wasn't an issue. But in this economy diverting any money from savings goals (especially retirement savings) was a justification. Which is why we did it on the lower price scale compared to many here on GW. We're reusing our cabinets (just paint) and 3 of our appliances. But splurged on new floors, counters, range, and a new window.

We're mid-remodel - but I'm already planning baking a pie this weekend utilizing my new counters and new range. So quality of life is up for the eaters in my family.

My responses has been mixed. My dad has stopped speaking to me for some reason after an argument about the kitchen (I couldn't tell if he thought I was spending too much or not enough, but that topic could be a whole new thread or even messageboard anyway) but my mom was in full support since it was paid for in full with money that we saved over the past several years. Our remodel was done on a pretty limited budget (about $27K) so while I don't know that I would recoup every penny I put in, I don't have to worry that I broke the bank or cashed in my retirement fund for the remodel. We currently have no plans of moving, and I am sure that I will get 27K of enjoyment out of it. While I was remodeling, I did keep in mind the type of neighborhood and tried to keep the "overspending" and "overimproving" in check. I am pretty happy. I have read a lot recently about people focusing on remodeling these days because of the economy. That always made me feel a little bit better.

We purchased our home last year knowing that we are going to remodel. Here was our logic.. Our home was priced below average in a very desirable area because the house needed work. The interest rates were ridiculously low. Our view is long term and we feel that any $$ we invest in remodeling will more than pay off when the economy improves. We do believe that the economy will improve :). As I go through the process I am also finding that labor costs are more affordable and more skilled labor is available. Everything from custom cabinetry to plumbing is cheaper. Also the inventory of high quality appliances on clearance is on all-time high. So I feel the bang for the buck is also better now. But again.. Our timeline for this investment is atleast a decade and probably longer.

As long as you don't overextend yourself, I feel that what you do to your house should be primarily for your use and enjoyment. Not as a potential for return on investment.

Very valid concern. However, you do recoup your own use and enjoyment.

It's a funny paradox we're in. It's called the paradox of thrift. A household can improve its finances by spending less and saving more. But in a Depression like we're in now, if everyone does that, then everyone is worse off and can end up with less savings.

I would spend more if I planned to stay longer...but otherwise, chalk it up to your own personal happiness. Like taking a vacation...you don't get money back on that, either :)

In general nowadays it's a very bad idea to consider anything done to your home as an "investment". We spent a lot of money on this house, but the kitchen just doesn't function well. We're planning on staying here "forever" though so I know we'll get good use out of it. The project also won't negatively impact college or retirement savings. And, we use things for a loooong time. So when people talk about ignoring "classic" because you'll want to re-do a kitchen in 10 years anyway - I know that absolutely doesn't apply to us.

I second palimpsest's opinion. We can always hope to get a return on investment, but we also know it's our home and we are raising our kids here and we need to love it because we plan on being here for the long haul. We are using money we saved for a couple years. We are on a pretty tight budget, but we don't have to worry about a loan payment and we are doing it all diy except the granite. Doing it diy definitely lets us put our money into the actual kitchen instead of into labor, but it will take us longer. In our neighborhood, lots of peole have been upgrading the kitchens. If we ever did need to sell, it would be hard without the kitchen being updated. I'm pretty confident it's the right thing to do for us.

We hoped to stay in our house a long time, and we had to remodel because of a terrible dishwasher leak. So as long as we were doing it, we wanted to make it what we liked.

I have never considered a house as an investment. I see this to be true for most old people that I know. They live in the house 'forever' until they die or have to move due to health reasons. The money that is tied in the house is not useful except in a few rare circumstances. Therefore, your finances better be able to support your life without recouping the "investment" in your house. To me, the value of investment is ZERO if I can't use it to fund something else for me; retirement, college, etc.

Joaniepoanie,
More than anything else, you need to be comfortable with your financial plans for the retirement. It's not about the kitchen. It's about creating a financial balance. You say that you will sell when you retire. For some, this is not a good option, others have been dreaming and planning it for years. Only you know. If you can make the numbers work, you should do what makes you happy.

As a general rule, I believe that applying the very nomeclature of investing to household renovations is folly. (before people go crazy please note the word GENERAL)

Even in the best of times, kitchens were often called the best "investment" because you could supposedly recoup 90% of the cost (?!). I don't know about your portfolio, by an investment where my a priori expectation is to lose money, is not one I'd typically pursue.

The physical structure of your home is constantly deteriorating, and growing obsolete. Roofs have a 30 yr life, the clock ticks on it every day, the paint job on wood trim in my area of the country has a 5 yr life. As to functional obsolescence, we put a 10k surround sound AV system in our last house, and less than five years later it has the sex appeal and function of a grammaphone. . Add to that fashion obsolescence (i put in very high quality brass faucets 10+ years ago, replaced with all nickel a year ago, and I think any minute nickel is peaking and brass will be avant garde) and you can see the folly of reno.

As to the kitchen statistic, you will get back 90% if you are lucky and if you sell it the day after you remodel. But roll the clock forward 10 years and the kitchen will look dated, and won't recoup anywhere close to 90%.

When real estate does appreciate, most of that appreciation is land values. Not the value of the structure.

So when you do a reno, don't lull yourself into investment speak. Be honest with yourself about what you are doing and why. Don't try to justify an expense to yourself with an investment rationale. You are doing it for yourself to enjoy. It may, or may not, enhance the value of your home at that point you are liquidating. It will almost certainly NOT add value equal to what it cost you; so no matter what some portion of what you do is pure consumption.

Oh, yeah!! We have only started to "improve"our new property, and already feel we are "priced out of the neighborhood" with just the remodel.
However, we paid 70,000 less for the entire place( 50acres)than the replacement cost on the house, so we feel OK about initial remodel. A lot of our work has also been basic maintenance that was just never done over the 8 year life of the house, so that seems like a wash.

I have lived in a house that never felt like mine for 8 years, and mentally needed to be back in my own place, so i could be creative again. Worth every penny, I think!!

Nancy

You need "retirement" savings more than a spiffy kitchen since you can't count on the kitchen having any realizable cash value exactly when you may need it.

That retirement savings may turn out to be needed beforehand to fund unexpected catastrophic health-care costs (don't count on health insurance, even good insurance, to cover everything you may need if you get seriously ill) and/or lengthy unemployment that goes along with serious illness. You need to carry as little debt as possible so your carrying costs if you have an income disruption (for whatever reason) are manageable. The idea that was popular a few years ago of buying the maximum house/debt-load your current income could "qualify" for was, and remains, quite risky.

Marcolo is, as usual, right that individual savings is at odds with what might be best for the nation as a whole. However you are not in charge of the nation's financing, but you do have (some) control over your own financial security. Debt is always worse than debt-free (even if you can "afford" it.) Less stuff and more savings will always offer you more security and freedom when facing unexpected calamities.

Your home is NOT (or shouldn't) be thought of as an "investment". It is a shelter expense, like rent, that if you are lucky will maintain its value relative to inflation while giving you a place to sleep and eat in the meantime. The idea of a home as a prinicipal family investment vehicle is real estate industry cant and promoted by the trade to keep things spinning along since they only make money on the churn. It's true that we have just gone through a period where some people (and speculators) got lucky with huge gains. But that period should be understood as a freak event, not a certainty of personal financial planning.

Anything beyond a modest, immediately pre-listing, spiff up will always have significant un-recovered costs. Make sure you face that fact squarely in deciding what to do with your reno. Your pleasure in the improvements counts, too, but you can't expect future buyers to reimburse you for the pleasure you have enjoyed in the house over the years.

L.

There was a long thread on this subject called something like "remodeling in the age of decreased expectations." I know cause I started it, about two or three years ago! There were many responses from people who were going through the same thought process.

At the time we were considering a gut remodel that would have cost more than three times what we actually wound up spending by keeping the gum wood and doing it ourselves. (Finances was one of several motivators to change course).

I figure someone has to support the economy. I thank the good Lord that at the present time I'm willing and able to do it. :-)

I bought this house last year and I got a pretty good deal on it because it needed to be completely gutted. Back in the day someone would have probably bought it as a tear down. It's in a great location and I hope to get my money back if I sell but who knows what the future will bring. I've cut back on other expenses so I could hemorrhage more money into my house. :-) I think I did a good job not going over board with things. I also tried to stick with something that would appeal to everyone in case I had to sell in the future.

However you are not in charge of the nation's financing, but you do have (some) control over your own financial security.

True. And everyone is right to answer questions about kitchen renovation financing by immediately pivoting to retirement and safety cushion issues.

However, if you are solid on that front, there is no particular reason not to spend. That is part of the problem--withholding spending not out of careful calculation but out of anxiety. We have nothing to fear but fear itself, as someone might put it.

But I do want to stress the paradox. Every dollar your family cuts your spending adds to your cushion but also slightly increases the chance you will lose your job.

We did research to figure out how much to put in our house. I noticed homes in my neighborhood with granite went for about $10k more. We decided it would be a good investment to put in granite even if we eventually sell.

Buying new cabinets would not have been a good investment and we wouldn't see that money back. My cabinets weren't bad anyway since our house is only 15 years old. We painted them, replaced the backsplash with beadboard and subway tile (CHEAP!), replaced the sink to an undermount, changed the knobs and faucet, replaced some of the doors with glass, and replaced the countertops with granite. We could have saved a lot if we painted ourselves, but we hired painters because I was scared of ruining my cabinets.

We spent between $5000-$6000 and it looks a million times better. The trim we added to the cabinetry probably made the biggest difference and it was the cheapest. As much as I would love a from scratch kitchen to get exactly what I want, I can't say it would be worth the $40k difference. It still has the same feel. The best part is that it was a good investment!

If I read your post correctly, the money has already been spent so enjoy your kitchen. In six years your kitchen will no longer be new so you will not recoup your money but it might aide in selling your home more quickly if not for more money. But a homes value is for the most part based on your neighborhood's prices so what your neighbors have done to their kitchens is as important as what you have done when considering resale value.

Maybe 10-15 years ago I believe 7 years was the average length of time people stayed in a house before they moved. That today is no longer true. Most find that upgrading to a larger house are better neighborhood cannot be done because their existing house has not has not increased in value. That being said kitchen remodels may not increase the value, but make a house easier to sale in today's markets. What surprises me is the one item that everyone must have over anything else is granite counters. I may be wrong , but in ten years this will be known at the counters of the 2000's.
I like stone, but I have noticed that less expensive appliances, cheap lighting, middle of the road faucets, etc.
are being used just so granite counters can be installed. It will be interesting in 10 years if different counters come into style and new customers remark that I love the kitchen, but it is dated with granite counters. Stone is timeless, but the public and youth can change in a heartbeat. My feeling on kitchens is do what you want and buy the best you can afford. It is the most used room in the house so make for your family to enjoy. Remember when it comes time to sell the kitchen maybe 5-10 years old and dated by new customers standards.

As a real estate broker of 40 yrs. in the most affluent neighborhoods, I can say it does not matter what you do as long as you do not expect top dollar for the improvements.
I have seen 5 yr old kitchens get the snub from younger buyers when in front of them stands white cabinets, hardwood floors , granite and stainless. It wasn't good enough for them.
I have also seen complete renovations to a home done in a beautiful, tasteful manner to again get the snub and in one case, it was purchased. Then a $250,000 renovation of every thing took place.
Another listing sold for an average price and it had most updates done whereby the buyers added on and redid the whole house for an additional $485,000.
Now I am at the point where I shall be selling in the next five years. I am doing nothing more than freshening up.
Painted cabinets, HD laminate, stainless appliances, and LVT for flooring. When I sell, it will be at a lower price than others around me, because I know whoever purchases will want to buy low and make their own improvements. It is our neighborhood that sells. People usually do not want to pay top dollar for someone else;s taste. They think their taste is better.
With retirement looming, I see the value of having more saved than spent. Even if you can pay cash for your remodeling, can you imagine what that amount would do to your retirement bottom line if put there and not in pro-stoves or the latest fixtures. One cannot guess what impression that gorgeous backsplash will make in 5 yrs. but the ability to take a vacation with your family will be priceless.

This veers off topic but tags onto what pcweary said. One of the most successful real estate agents in my city has never owned a house.

i too have wrestled with this issue. my approach and conclusions:

i had to acknowledge the state of the housing market, my anticipated time horizon before selling and do an assessment of the issues the house needed addressed, recognizing i would not recoup my investment anytime soon, if ever.

my 1942 yr old cottage had the original kitchen (ie: no counterspace, no DW, poor lighting, no ventilation....).

mortgage will be paid off in 5 yrs, i plan to live in the house for 7-10 years, then depending on housing market can turn it into a rental until market recovers if needed. so i decided if i was going to be in the house that long a functional kitchen was an appropriate expense to incur. i love my kitchen, it gives me joy everytime i use it. i am a homebody, my environment is very important to me and i could not imagine living with an original 1942 kitchen for another 10 years. i did struggle with the expense, felt guilty but stretched out the horizon to complete so i could pay almost the entire project out of pocket so savings was not impacted. also put locals to work, who needed the work. so we all benefitted! and when the day comes to sell the house, while the kitchen will no longer be brand new, it will be miles ahead of what i started with and i am sure will help me sell the house.

Marcolo wants us to confront the paradox of thrift?

Goodness, don't try this at home folks. It belongs nowhere in your financial planning. Pessimism should rule your decisions!

Leave this work to the trained professionals. How about a more progressive tax system, putting more money in the hands of those who are most likely to spend it.

Just a comment ...

"can turn it into a rental until market recovers if needed"

You do realize you are assuming the market "recovers", whatever that means?

Also, if that market has not recovered, you may not be able to rent it at a price that covers your operating costs (to say nothing of the joys of being a landlord or paying someone else to unclog toilets). Rents and prices can decouple, as they are starting to now in some submarkets, but often a depressed market for one is a depressed market for the other.

I bought my house in 2004. It was built in 1979 -1800sq ft 3bed/2bath. The galley kitchen has the original cabinets with about 7 coats of paint on them. When I got married last year and my husband moved in, we discussed moving to a larger (more expensive) house so he could have a theater. Once he saw my mortgage amount and realized we could refinance and have this house paid off by the time we're in our early 40's (in 8 yrs), we decided to stay here and remodel. We understand that every dollar we put into this house is being 'thrown away'. But, every change we make helps it feel like 'our' house and not 'my' house. We plan on staying here forever. So, might as well do exactly what we want, spend what we want, and enjoy it every day. If we have to save for 2 extra months to get soapstone countertops and a $500 kitchen faucet (don't ask), then that's what we're going to do. You could say we should be investing this for retirement....but I think there's a lot of people out there that lost tens of thousands of dollars in their portfolios, and they don't even have a pretty kitchen to enjoy.

I really have no regrets about our addition/remodel. The addition has been planned for 15 years, the money has already been set aside, so it's not like we are going to be hurt by it, unless dh were to suddenly get laid off and that is not likely.

The remodel has turned into more than expected, but I look at it as catching potential problems before they got a whole lot worse.

Remodeling should be done for the owners enjoyment and not for resale. If you plan on flipping a house that is entirely another matter. I believe some do it because a kitchen or bath is beyond repair and they call it a remodel. Sometimes an untouched or non remodeled house is a better value because the new buyer feels he isn't throwing away materials he didn't want but paid for. I have lived in my house for 25 years and plan on many more so a kitchen remodel is for myself and not resale. A pro range or upscale appliances are for us to enjoy now. I have owned a miele dw for 17 years and have gotten my money's worth from it. The quietness of it was for my sanity not resale. If remodeling is for investment in today's economy look elsewhere. If you need to update a little for resale do it sparingly.

I don't consider my imminent kitchen reno (off to Ikea tomorrow to go over my plan) an investment but given the tragic 80s kitchen (beige laminate, beige melamine with integrated oak pulls = gorgeous) I'm sure to add some value. I've dubbed my reno my "living in my truth" kitchen (stolen from Suze Orman). Who knows what it will cost or look like in the end but it has been fun designing around a planned limited budget - so far I'm pretty psyched (it has some yellow so if I can get it together I might get the plan into the latest Design Around thread). I think it's about balancing real estate market realities with personal resources and then needs rather than over reaching wants that sometimes can have more to do with what other peope have than what is required to enjoy making great food in an attractive functional space in your own home.

Here is what I wonder--- when and why did the focus of what you do w/ the house turn into an investment? I'm not asking hypothetically either. What caused this to be the mindset? Was this because of HGTV's resale shows or because of the phenomenon of real estate flips or because people now can't afford to do remodels unless they can recoup the costs? I can understand if you borrow the money and can't pay it back unless resale value goes up (of course, should you be doing the remodel under these circumstances), but if you pay cash for it, why does it matter so much if you are going to get the cash back and why do you expect to get that cash back?

I love to make my house pretty and that is my hobby. I would rather remodel or upgrade the house than go on vacation, buy expensive cars, etc. No one buys a fancy car expecting to get their money back on it or expects to get their money back on any other hobby they have- why can't a remodel be the same way- do it for your enjoyment and because it is fun?

We had an appraisal done 16 months ago before we started building and we just got our new appraisal today for the as-built house. The appraisals were the same. For what we spent out-of-pocket on upgrades not factored in to the original appraisal, we could have bought a small house. None of that spending mattered in the appraised price. I have no regrets. I would do it again.

The house in FL we just bought, the owners redid the kitchen before we bought it. I wish to heck they hadn't. Now we have a boring, builder's grade new kitchen that I feel too guilty to tear out (not to mention, I don't think DF would see the point in doing it). I would so much have rather they left the 1970's cabs in so I could justify tearing them out of there! We certainly did not pay for their remodel. After we made our initial offer, they kept coming back to us and saying "but we spent X" We said "too bad, here's our offer." and they took it. They'd been trying to sell the house for months by that time.

Babushka cat replying back:

Should have not used the word recovers as I agree the market will likely never or take a hell of a long time to generate the numbers it did in the heyday. My point is I have options and can ride out the storm in a soft market should I need to. While a rental is not my preference it is an option for me down the road. I will be mortgage free in 5 years and if I do choose to turn it into a rental the going rent covers all expense incl prop taxes, maintenance and property mgmt with a profit of 1k a month. Hopefully by then I will be retired so an extra revenue would be appreciated and gravy

I've been wrestling with this too. Frankly, I wish I wanted a cosmetic-type makeover. It would be easier to tell myself no, and if I said yes, it would be cheaper. For me, my desire to remodel the kitchen stems from the fact that the layout is disfunctional for how I use the kitchen today. I didn't realize that when we bought the house, because how I used the kitchen pre-kiddos was very different.

Barring some sort of financial windfall, we'll be in this house for at least the next 15 years. I am choosing to look at my decision to remodel, and my budget planning, as "How much would I be willing to pay each year for a more functional kitchen? What would that be worth to me in terms of quality of living? Is it worth less extravegant/frequent vacations? Is it worth driving the car another year or two before getting a different one?"

I know that doesn't account for the "magic" of compound interest/returns. Then again, conventional wisdom about that "magic" doesn't take into account that timing is everything. Woe to the one who is close to retirement when the Greek financial system collapses (or some other thing regular folks have no control over) and your 401k takes a nosedive.

We bought in 2010 for a steal in a neighborhood that is reasonably stable (the previous owners were following their moving truck to North Carolina when we made the offer). This neighborhood started in the mid-1960s and has a lot of second and third generation families who bought houses there when they settled down. Good schools and a great area in general. I don't feel bad about putting so much money into this house--I don't view my house as an investment, for one, and for another, I'm going to be here for at least 15-20 more years, so I might as well have it exactly how I want it.

There's sure a lot of enjoyment power to $$ spent on a kitchen, it certainly brings me more joy than $$ spent on other things. You can't take it with you and you certainly don't know how long you'll have.

the couple of friends who are also realtors have alluded to the idea that a kitchen[in disrepair or done-up] does not make a sale. Contributing factor to overall appeal? A factor in price negotiations with potential redo's? Likely better to put your own personality in,make it work properly, and watch your budget constraints.Potential buyers can look over products/how-to's and make selections just like anyone else. For one person that doesn't want a "project" there may be 3 that do,or vice versa.

We just remodeled our house. We bought it pretty cheaply 3 years ago knowing we'd remodel. It's in a desirable neighborhood in what has been referred to as one of, if not the, best school district in the area. We took out a construction loan which enabled us to use the value of the house post-remodel. We actually have more equity now than pre-remodel.

That being said, our previous 3 houses were---over a span of only 8 years-- were on the whole, losses. We moved for jobs and for quality of life issues. After all that, we had no thoughts that this remodel would be an investment. We just really love the neighborhood and the house. I truly feel like we are taking care of a treasure...the house is 140 years old and very modest. It feels good taking care of it...like an investment in preserving history, not our own financial future. We tried to honor the house and neighborhood and hope we did okay. My only hope is that we don't have to sell....not because of finances but because I really do love it here.

I feel viewing the home as an investment is and always had been a panacea for those who live beyond their means. Before Home Equity loans, 2nd mortgages were almost whispered as though one had committed murder and buried the bodies in the basement.

Out-pricing the neighborhood. Ok. Tell me. Should you not improve your home to enjoy it and feel comfortable, functional and simply take pleasure in beautiful things just because everyone else's home is 20 years+ out of date, made of crappy, 20-year old then-builder grade materials? Keeping down with the Jones'?

There is such thing as standing out from the crowd. Ever heard of regentrification, for example?

I want to live in my home until I drop dead installing cabinets. Well, hopefully I'll be on to installing trim by then, BUT you get my point. My home pays me about $2K a year from solar energy production. Who can say that? I live on the slummy end of my road with the McMansions on the other end. Doesn't mean I can't make my home everything my imagination wants it to be.

Investment? No, I'm 3 mortgages underwater. Safe? Warm (now)? Mine? [waving arms wildly] YES! ALL MINE!!!

IF you bought your house as an investment, then yes...you need to be very carefull about what "improvements" you make. Not just to the kitchen, but, ANYTHING.
Then again, what happenned to the economy? Lots of things, and one of them being...A million folks buying way too much real estate AS an investment only. No different than "playing the ponies". Not all gambles/bets turn out in your favor, and, if it's not actually your money? (we've all seen how that worked out in 08).

The problem with any remodel/upgrade is it CAN be a matter of opinion to some extent. You are remodelling to what YOU like. Which, may be acceptable to somebody, but, not to others. "I see you spent $20k on your kitchen, and, it shows, BUT....I think it needs remodelled".
Like selling a car with a brand new Green paint job. Sure it's awsome, and I love the car, BUT....I hate green. The 1st thing I'm going to do is repaint it Red. (so, your money spent means very little to me).

It's okay to invest in a house. Just carefull what you spend and how you spend it. Think "investment" when you do.
Otherwise, improve as you wish, spend as you wish. A house needs a constant flow of money thrown at it. If you plan on living there and making it a home. Throw money at and make it the way YOU want it, and don't look back.

BTW: In "this economy" you can sure get some sweet deals on appliances and stuff. Especially if you don't HAVE to have NEW, and ESPECIALLY on upper/high end stuff.

I have lived financially conservative in the past decade and I have 'invested' in 'income generating' real estate. I do NOT consider my primary home an investment. I have spent a lot of money (not as an investment but as an enjoyment factor) on my primary residence and have since paid it off. No mortage on where I live.

From my income generating 'real estate' investments, I have enough current income to pay for one of my 2 kids prep school tuition and will have enough to pay for both my kids private college tuition when/if they go. To me THAT is 'real estate' investment. Investment is supposed to give you money that you can USE.

Primary houses rarely gives you money that you can use in your lifetime. If there is any money, for most middle class folks, the money goes to heirs after his/her death. Even in the best case scenario where you sell at the height of the market, you HAVE to live somewhere after you sell, so you buy another house. That does not give you money in your pocket

The only way you can actualize the gain in your house is if you move out of a high cost of living area to a low COLA after you have cashed in on the house. That only happens if you retire, get fired or lose your job and by chance move to a lower COLA, or chose to move for personal reasons because there is enough money to live without a good salary in a high COLA.

That elusive concept of living without a high paying job is what most people cannot achieve. So most of us, even if the house prices GO WAY UP, we really can't actualize it. For many folks, there are not enough jobs in a low COLA where you can justify the move. My DH is one of those folks. He has a PhD and it would have been extremely difficult for him to find any job outside of an expensive metropolitan area where he can use his training and expertise. We have actually considered this concept because my high paying job is not dependent on living in a large metropolitan area. We contemplated the idea of moving off the coast to a midwest city where the COL is lower. But we are spoiled city folks that live near the water (Seattle, WA) and I wanted to live in a city that I love. Had we moved to MN,IL,IW etc 10 years ago by selling our house, we would have bought a mansion in those areas for our puny house! I have a job that can be found nearly anywhere with a similar salary. We could NOT justify the move with the actualized gain in the house at that time because we did not want to move away. Some folks make this move at retirement.

So there goes your house's gain in the market! The convinience of the living in the town you love trumps the value of living in a low COLA where you could live like a king.

We've already spent the money. It could have been applied as extra to our mortgage as pay down to principle. In my mind, the money is gone and is strictly for our daily enjoyment.

If we get any money back, or at least don't lose any more value on our home (hard to do at $60/finished sq ft) that would be a win, but I don't see it happening. I bet we are overpriced for the market as it is considering all the other work we have done on our home.

"Before Home Equity loans, 2nd mortgages were almost whispered as though one had committed murder and buried the bodies in the basement."

Christine, this was hilarious! Yes, that is exactly true. I remember when you needed to be employed to have a credit card, too....

To answer the original post, no, our kitchen was so past dead, people were cheering for us. We considered our kitchen to be in place of 2-3 years of vacations. And an investment in peace of mind.

"I love to make my house pretty and that is my hobby. I would rather remodel or upgrade the house than go on vacation, buy expensive cars, etc. No one buys a fancy car expecting to get their money back on it or expects to get their money back on any other hobby they have- why can't a remodel be the same way- do it for your enjoyment and because it is fun?"

This ... times a thousand. We are about to REPLACE the second floor of our house. No - not add, not remodel, REPLACE. It's a long story but the delta between remodeling & replacing was $10k - $15k (depending what you included). But we have not taken a vacation away in years, I travel for work & have to head overseas every other month (if not more often). I don't WANT to leave home on vacation, I want to stay home.

Sometimes your property has intangible aspects that are nearly irreplaceable ... for us it is that we are "farm front" real estate. We don't have acreage, but the land behind us is protected farmland and even on a winter's night I can't see any house lights behind us. Average lot size in my town is 1/3 of an acre, so this is a flipping miracle.

Owning a home is a lifestyle choice - it would almost always be cheaper to rent a small apartment your whole life than to buy a house. But I wouldn't go back to apartment living unless it was the only way to afford groceries & pet food. I love having a yard & space around me, I love that my dog has the chance to chase squirrels and our cat can lay in the sun on the deck.

And it feels good to spend money (that we have saved up) on LOCAL businesses. Although I do hear the negative voices in my head often, when I think about the alternatives I am happy we are doing what we are doing.

Marcolo is right. Absolutely. The economy is driven by individuals making choices, based on their own self interest...but those decisions impact us all. So, let's all be focused on our own self interest, remodel our kitchens and get the economy back on track! This will raise the price of housing (again) and we should see a return on the investment.

Otherwise, it might take another World War...which is the only way we pulled ourselves out, of the last depression.

The endpoint to Not remodeling (in any economy) can be this:
Thanks to UROBOROS5 for this picture, and link to the house:

Or this, a house that kicked my search into high gear a few years back:

While these kitchens probably functioned for meal preparation, where would the enjoyment in it be. In my picture notice that the range and pots are quite clean. As was the Front of the microwave. We were shown through the house by the owner, who was actually rather proud of it, and proud of the idea that he had moved in 40+ years prior and not done a thing unless it was absolutely necessary.

"This economy" has turned around quite a bit in the last year when it comes to remodeling projects. I've been busier in the first 3 months of 2012 than I was in total for all of 2011, and that in turn was better than 2010. More people are abandoning the "property ladder" type of moving and staying put and putting money into their existing homes. So while the real estate market at a whole is still very anemic or even still in free fall, and new building is very very scarce, remodeling is HOT HOT HOT in the budget to median home priced communities. The higher priced market is pretty frozen for just about anything unless the home owners are really in that % of top income bracket that didn't have to worry about weathering the downturn.

People have never been loathe to spend money on luxuries for themselves, and remodeling has now become one of those luxuries rather than buying the new car or taking the exotic vacation. "Being a homebody" is now the new cool thing to be. Surprisingly though, I'm seeing less DIY now than I was during the boom when it had to be part of the equation to manage to stretch your dollar to be able get into a home that was above your budget. Part of the "luxury" process seems to be paying others to do the job for you rather than stressing yourself out by DIYing it. I'm seeing a lot higher quality renos with great quality material and workmanship rather than ones focused on disguises for the surface that will only hold up to a quick flip.

We drive older cars and do not go as far away as we otherwise would or for as long as we could in order to do our house the way we wanted so it would work for our family. When we went to Disney 2 years ago, we used Priceline and stayed in a fabulous almost new hotel about a half hour out for $42 a night. That included a very nice breakfast for the 4 of us. We rented a car from Rent-a-Wreck and saved over $450 for doing so. It was an ugly Taurus, years out of date, but it got us where we needed to go. We spent time together but were frugal.
My point is, that we could have stayed in a resort on the property and blown a lot more money. Instead we economized and were able to go for 8 days in a row to Disney and really had a blast.
We all have choices throughout the year where we could spend more or less. We choose to spend more on our house and less on other frills. A $1 dvd rental from the grocery store works just fine for us rather than hitting the movie theater for a family of 4. Sometimes we borrow a dvd from the library. Most of the time, we have shows saved on our tivos, which were bought 10+ and 8 years ago with lifetime service (total service for both of $450 or so).
My dh's car is a 99 Acura bought used 7 years ago. Mine is a 2003 Honda SUV bought used 5 years ago. They are not chic by any means, but they work reliably and we have no payments. Other people I know lease cars for a couple of hundred $s a month and yet think we are odd for paying that same amount more on our mortgage for having remodeled.
We made our house bigger when we renovated and those aspects are not going away or getting dated. Our house will be worth more for having done that. It is not oversized for our area and yet, we have all we need and want.
Just last night, I spent several hours baking with my son in our kitchen. There was room for both of us and we had a really good time. We have to delay any big vacations for a while, but our day to day lives have gotten better with having a better layout and more room. Our new oven has 3 rows of racks and convection, so we needed to spread out to bake the many batches we needed (we are hosting dh's baseball draft tonight and I have an open house tomorrow, so we made a ton of cookies).
Even though our reno went horribly wrong on many fronts, I enjoy the new space much more than the old cramped bad layout. We are pursuing the gc for compensation, so hopefully, it will be finished within the year.

In concept, one should not count on their house for their investment, then again, I know many people who would not properly save money any other ways. If it is in their pockets or bank accounts, they view it as spending money.

We have faith that economy will improve over time. By staying put, we will save on closing costs and hassles later on. Our house was designed so that we can age in place when we are older. We will never need any larger and it was designed for energy efficiency. We hope to add solar for the electric in the next few years.
We have retirement accounts and will get social security and dh's pension, but if something ever went wrong, we could borrow against the house, or if we were seniors, could get a reverse mortgage. If you rent, you don't have that option. The people I know our age who do not own a house, do not seem to have loads stashed away. Money has a way of being spent if you don't have something specific for it. Those lattes, designer pocketbooks and expensive restaurant meals really add up. We eat out with a coupon most of the time and rarely pay full price. We enjoy eating at home with the room to cook and eat comfortably. Since having more space to entertain, our social lives don't have to revolve around eating out or going to bars because we don't have space to fit everyone. Dh's draft today will involve 14 men and we will be able to feed them dinner and refreshments easily. In our old setup, we'd have had to clear out the living room to get that many in and it would have been tight. In our new layout, they can fill the dining room, den and kitchen table within view of each other and be able to proceed with their drafting comfortably. When the kids have playdates, there is plenty of room for each kid to have friends and not be in each others' way (or mine!).
I get a kick out of seeing people's faces when they come over and see the new layout. It has transformed the house from needing an apology about the condition to accepting compliments. It is not even completed and people can enjoy how far it has come. I walk in the house from work and enjoy seeing my dh and sons doing their thing in the new spaces. When I empty the dw or do laundry, it is not such a task any more. I really enjoy cooking more and that is with only 1 portable burner because we are not hooked up to propane. The extra space and new oven compensate for that.

I guess I am going on too long, but the short answer would be, we enjoy the renovated/extended outcome and know it has improved the value of our house. We would not get back the money put in, but we also made our choices wisely and have a better return than if we "invested" in cars, fancier clothes, mani/pedis, etc...

Babushka cat replying back:

Should have not used the word recovers as I agree the market will likely never or take a hell of a long time to generate the numbers it did in the heyday. My point is I have options and can ride out the storm in a soft market should I need to. While a rental is not my preference it is an option for me down the road. I will be mortgage free in 5 years and if I do choose to turn it into a rental the going rent covers all expense incl prop taxes, maintenance and property mgmt with a profit of 1k a month. Hopefully by then I will be retired so an extra revenue would be appreciated and gravy