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The New York real estate market should set how far you renovate, not whether your home works for you. We first wrote on this subject after a quarter when the reports showed Manhattan sales and prices down sharply from the year before. A report like that makes an owner wonder whether it is a bad time to put money into an apartment. The answer is the same in any market: a renovation is judged over the years you will live with it, and a quarterly report covers three months.
What the market reports measure
The reports that make the news are counts of closed sales. The appraisal firm Miller Samuel, whose reports are among the most quoted, describes its Manhattan report as a quarterly analysis of co-op and condo sales based on closed, arms-length transactions. A closing comes weeks or months after the buyer and seller agreed on a price, so a report describes decisions people made a season earlier. It tells you where the market has been. It does not tell you what your own apartment will fetch in five years.
If you are staying
Most people who renovate do it to live in the result. If you expect to stay for years, a slow market is no reason to keep cooking in a kitchen that does not work, and a hot one is no reason to spend beyond what suits the apartment. What matters is whether the plan fits how you live, whether the building will approve it and whether the budget is one you can carry without counting on a sale.
If you plan to sell soon
Here the market matters more, and restraint pays. A buyer may not repay the full cost of a new kitchen done to your taste, and may plan to redo it anyway. Before a sale, put money into what every buyer notices and nobody argues about: sound floors, fresh plaster and paint, a clean and working bathroom, good lighting. Leave the layout and the big finishes to the next owner.
If you have just bought
The best time to renovate an apartment is before you move in. The rooms are empty, nothing has to be stored or protected, and you are not living in dust. If you are buying a place that needs work, start the design as soon as you have a signed contract, and ask the managing agent how early the building will look at your plans, because the board’s review takes time whatever the market is doing. Our page on co-op renovation explains that review, and apartment renovation in NYC covers the work itself.
Keep the records either way
Whatever the market does, the paperwork from a renovation has value when you sell. The Internal Revenue Service counts improvements, meaning work that adds to the value of your home, prolongs its useful life or adapts it to new uses, toward the basis of the home, and lists kitchen modernization, built-in appliances and flooring among its examples (IRS Publication 523). A higher basis can mean a smaller taxable gain. Keep the contract, the invoices and proof of payment, and ask your accountant how the rules apply to you.
The short version
- Read market reports as history, not forecast.
- Staying for years: renovate for how you live, within what suits the apartment.
- Selling soon: repair and refresh; do not rebuild.
- Just bought: design and approvals first, construction before you move in.
- Always: keep every record of what you spent.
For putting numbers to a plan, see our guide on how to plan and budget for a home construction project, and our home renovation in NYC page for what a whole-home job involves.
Weighing a renovation against a sale or a purchase? Call us or send the request form, and we will tell you plainly what the work would involve.
Questions people ask
Is a slow real estate market a bad time to renovate?
Not if you are staying. A renovation is lived in for years, and a quarterly sales report describes three months of closings. A slow market only argues for caution if you plan to sell soon after the work.
Should I renovate before selling my apartment?
Usually only lightly. Repairs, paint, floors, lighting and a clean working bathroom help any sale. A full kitchen or layout change done to your own taste may not be repaid in full by a buyer, who may want to choose their own.