2009 Real Estate Guide
A white house with large windows, a brown roof and trees surrounding it on top of house plans
real estate
New realty reality: Small is the new big

"Our large projects, which typically include additions, have really slowed down," he says. "The focus today seems to be on updating a house, which usually requires less money than to blow out and expand it. The trend seems to be to keep what you have in terms of square footage and just make some improvements to it."

Partial kitchen or bathroom remodels are the norm today rather than full-scale, down-to-the-studs makeovers, Schloegel says. Instead of adding on, his customers now are more likely to update family rooms with new cabinets or built-ins.

"It's more about livability than salability," he says. "Homeowners may not be as aggressive in making their house bigger in a market where values may not be going up or may be going down."

One upside to the economic downturn: Remodeling is a bargain. Schloegel says his prices are down by as much as 10 percent, and construction materials, which were on an upward curve, have not increased this year.

"It's a great time to take advantage of pricing for remodeling," he says. "One of your best returns always is updating your home. It not only makes it more enjoyable, but if you were to resell it, nothing moves better than a home that has been kept up and updated."

Corcoran, a veteran Manhattan real estate broker, may agree with Schloegel in theory, but she's a realist when it comes to the recession.

"One thing that works against that theory is, people are very reluctant to spend money on their home -- even for their own comfort, even now -- because they really believe they won't get it back," she says. "Home improvement is seen as a losing proposition, which is a shame because it's not really true. Improve a kitchen smartly, and you'll still get that money back. But people don't believe it anymore. They're waiting it out."

Gauer sides with Dorothy: Dollars and cents aside, there is no place like home.

"The scale of our homes should derive from the real needs of our daily lives, not from vanity, insecurity or a need for public display," he says. "Home should be the setting for life, not the measure of it."

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