Huge Spikes in Home Equity Spawns Renovation Boom But Will it Bust You?


With home values at an all-time high in the US and in most parts of California, savvy homeowners are taking out Home Equity Lines of Credit to finance home improvements (HELOC).

A recent survey from TD Bank found that 80-% of these HELOCs are going toward renovation projects. With 2017 remodeling spending in the US hitting $159 billion, the projection is that the spending will increase by 5% in 2018.

"Major possible pitfall for homeowners that could be tackling renovations the wrong way."

That is great news for the building industry, a good incentive for homebuilders but a major possible pitfall for homeowners that could be tackling renovations the wrong way.

As we covered in great detail this month in our deep dive, not all home renovations equate to positive returned home value.  The $35,000 it costs to do a full kitchen upgrade only raises the value of the home by $20,000. Taking on $100,000 or more in home equity loans could put you in a serious home value negative when it comes time to sell.


If you are in your forever home, you have less to worry about. If you are in a two bedroom bursting at the seams and the kids are starting to drive you mad, your better option is to sell the one you are in and upsize to greater square footage rather than remodel. Something I can help you with.  

Could put you in a serious home value negative.

I love seeing classic homes get new life, homes deteriorate over time and they all need to be maintained. It is often I drive around Pasadena and see houses that are just in shambles, it is such a shame, so many hungry homeowners that would love to cherish a home while there are many homeowners that don't or can't maintain one.

The fact is, home values are at a crazy high, if you live in a home that you can't maintain or have a bunch of empty rooms, it may be the right time to sell.  With Proposition 60 and Proposition 90, there is an easy way to keep a low tax rate base and move to a new home. This will be the topic on next months deep dive. Follow Bungalow Agent on Facebook, Twitter, Instagram or YouTube for the latest coverage on all things homeownership.


Michael Robleto

REALTOR®-Podley Properties


Michael Robleto is a REALTOR® with Pasadena based Podley Properties. His analytical and open approach to sales has served his clients well in his twenty years of sales. Michael brings a modern data and technology-driven approach to real estate while focusing on the historic architecture of Bungalow Heaven. Tapping his experience in media and journalism, he publishes in-depth blog articles that will be of interest to homeowners and home-buyers. He can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog BungalowAgent or at For Sellers or Buyers Agent representation he can be contacted directly. 





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