Are We Pushing Renovations Too Far in Today's Tough Real Estate Market?
Gray Houghland • August 1, 2025
How to Determine How Much of Your House to Renovate
It definitely feels like Charlotte’s real estate market and, in fact, the housing market across the nation, is in a bit of a standstill right now. With interest rates high and affordability an issue for many buyers, people are hesitant to make a move. Sellers are reluctant to list their homes because they don’t want to give up their lower mortgage rates, while buyers are wary of paying a premium due to the higher rates.
This current market is leading to some difficult decisions regarding home renovations and additions. Unfortunately, these choices often do not lead to a strong long-term return on investment.
Given the challenges of finding a new home, many homeowners feel forced into renovating, and as a result, they’re not always making wise decisions. Often, they’re simply trying to do too much. This can create significant problems when they eventually try to sell.
For example, a $200,000 kitchen renovation in a $600,000 neighborhood is unlikely to recoup its cost upon resale. Another trend we’re seeing too frequently is the addition of a full second story above a small ranch-style home. The inherent limitations of those 1950s ranch floor plans are difficult, and sometimes impossible, to overcome.
Regardless of your specific housing challenge, we caution clients not to push their renovations too far. If the proposed solution doesn’t pass the “sniff test,” it likely won’t deliver a good ROI in the future.
To help clients think through this dilemma and avoid being driven to poor decisions by the current housing market, we recommend working with a team of professionals. Here are some key steps to take:
- Hire a real estate agent to perform a comparative market analysis (CMA) of your existing home. This will provide an estimate of your home’s current value. While online tools exist, their accuracy is often questionable, especially when the stakes are this high.
- Hire an architect to sketch out one or two design solutions that address your desired improvements.
- Hire a builder to provide a cost estimate for the proposed renovations.
- Hire the real estate agent (again) to run a new comparative market analysis based on your renovation plans.
- Compare the estimated increase in your home’s value to the cost of the renovation to evaluate the wisdom of your project.
Notice the word hire. In my opinion, all of these professionals should be compensated for their time, especially given the purpose of this exercise and the uncertainty of future work.
Armed with a market analysis, a design plan, and a cost estimate, you’ll be equipped with the data needed to make an informed decision. While this process may cost a few thousand dollars, it could save you from losing $100,000 or more on a poorly planned and illogical renovation.
In the past, such a thorough exercise may not have been necessary. The real estate market was fluid enough that homeowners weren’t often backed into corners. But today, with high construction costs and tighter market conditions, the risks are greater.
So, in the words of our parents: Do your homework… do your homework…
Examination of the value and accuracy of pricing houses based on a cost-per-square-foot method.
We discuss the importance of comparing apples to apples.
What does an architect cost in Charlotte? Most residential fees run 6–15% of construction cost. Here's how the range works, and what you get at each level.
Learn to maximize a Myers Park infill lot with custom home design. Contact us for expert architectural solutions today!
Where you can put an ADU on a quarter-acre Charlotte lot, plus the UDO rules that shape your options.
Where homeowners can find reliable answers to the construction questions that come up most often.
Drowning in Pinterest and Instagram ideas? How an architect turns inspiration into a clear design.
Six essential tips to streamline the process of building your custom home in Charlotte, NC.
The real difference between architecture and interior design, and how each shapes your custom home.
Surprising, useful data builders & developers can get from an architect's building information model.
From discovery to final design: how a Charlotte renovation and addition project actually unfolds.
