Homeowners who bought recently may find the recent press about the residential home-sale market unsettling. Home sale activity is slowing from a fever pitch pace and listings in general are taking longer to sell.

Your best plan of action is to concentrate on a course that will ensure that regardless of whether the market goes up or down, you’ll be happy at home and in good shape when it comes time to sell.

Although no one knows for sure where the real estate market of 2006 is heading, most analysts agree that the rate of home price appreciation will diminish from the double-digit rate of the past couple of years. In 2005, home prices increased nationally by 13.6 percent, according to the National Association of Realtors (NAR).

David Lereah, NAR’s chief economist, predicts that the national median home price will increase by 5.8 percent in 2006. The median price is the price that is midway between the least expensive and most expensive home sold during a given period of time.  While this is a significant drop from last year’s rate, it’s more in line with a normal appreciation rate.

Historically, home price appreciation in this country has tended to run about 2 percent above the inflation rate. According to NAR, inflation as measured by the Consumer Price Index is expected to run around 3.3 percent this year.

Recently many homeowners who did virtually nothing to their homes made a healthy return on their investment within just a few years. But, if predictions for a lower appreciation rate going forward are indeed correct, you may need to take action if you want to ensure that you make rather than lose money when it comes time to sell.

HOMEOWNER TIP: There are basically three ways to preserve and enhance your financial position in real estate. One way is to get your home into top condition. Many who purchased a home during the past few years bought the property in its “as is” condition. If you sell in a more balanced market, you may find that buyers aren’t as willing to overlook deferred maintenance.

Now is the time to carefully review your inspection reports. What defects should be repaired in order to ensure that your property maintains its value? The houses that sell for the most money in any market are those in prime condition.

After you take care of correcting deferred maintenance, set up a plan for home maintenance. Most buildings require routine tune-ups. For instance, water damage can cause serious problems. So, before the rainy season each year, make sure that your home is watertight.

Many homeowners put off dealing with property problems until it’s absolutely necessary. It will usually cost less if you’re proactive and make repairs before minor defects become serious.

Making home improvements can increase your enjoyment of the property while you live there. But, improvements don’t always add value. In order to increase your bottom line when you sell, your renovations should be cost effective and they should be done with an eye to their resale value.

Homeowners who ignore the market value of their improvements may actually diminish the value of their property. Ideally, consult with a savvy home designer for advice on how to make modifications in good taste that will hold their value over time.

Interest-only loans became popular in recent years as home prices rose. However, if you pay only interest on a mortgage, the amount you owe does not decline. You will increase your wealth by reducing your debt.

THE CLOSING: Now, relax and enjoy being the proud owner of a well-cared-for home.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

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