Interest rates are up, the real estate boom has petered out, and so, it appears, has the remodeling frenzy. "Kitchens generally tend to recoup their cost, and bathrooms too," says Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate. "Those are widely appealing to the marketplace, and they tend to be more standard in form. Things that are very idiosyncratic and are customized to the home owners' individual tastes ... don't appeal to a wider audience." That can include wine cellars, home theaters, au pair living suites and other fancy add-ons. Some buyers may see them as fabulous extras, but others may see them as unnecessary and not be willing to pay a premium for them. "With putting in a fancy swimming pool or tennis court or something like that," Baker says, "some buyers might want it. But other buyers think it's a liability."
July 12, 2006