By Paula Ebben

BOSTON (CBS) – The real estate market is back and that has a lot of people weighing their options. Should you sell, or remodel? Experts say there are a lot of things to consider, but most importantly is to remember the mistakes that led to the last real estate bubble.

The Greater Boston real estate market is sizzling, just ask Jan Dolan, a real estate agent with clients chomping at the bit to buy.

“It is challenging because there are very few houses on the market and when they come on there’s a lot of buyers rushing to get to them,” says Jan.

That lack of inventory means big business for contractors like Doug Hanna of S&H construction.

“We’ve seen a large increase in inquiries for work in the last couple of months,” he says.

The turnaround in market also means many homeowners have new-found equity in their homes to pay for additions or renovations.

According to the Federal Reserve, home values have climbed to the highest-level since 2007. Homeowners gained 8.2 trillion dollars in equity just last year, an increase of 25 percent.

If you have decent credit, you’ll be able to tap into that value that’s been building in your home with a home equity loan or line of credit.

But there are three things to keep in mind so that project doesn’t spiral out of control.

First and foremost be honest with yourself about what you can afford. Second, once you have a plan, stick to it. Third, don’t tap all of your equity.

And finally, remember what happened just a few years ago. Just because you have the equity to add that master suite, doesn’t mean you should.

If remodeling won’t work and you have to buy, be prepared to act fast. Many new homes are selling before the open house either at or above the asking price.

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