When radio stations start playing Christmas music 24/7, I know it’s time for Remodeling Magazine to release its annual cost vs. value report. In it, they compare remodeling costs with resale values for the 25 most popular home improvement projects.
Remodeling Magazine surveyed 10,000 members of the National Association of Realtors (NAR). Of that, 2,188 responded and supplied the data to compile the report. The figures are based on cost of labor, materials, subcontractors and gross profit. This year, the report concludes that although the price of remodeling costs is increasing the cost recouped at resale is declining, which shouldn’t come as a shock, considering the current state of the housing market.
No Reason to Worry
According to REALTOR Magazine, an industry publication available to NAR members, we shouldn’t be overly concerned about the report’s findings. They site the fact that "a home improvement project costs only 20 cents to 25 cents on the dollar. The other 75 to 80 cents spent on the project goes directly back into the home through increased value–not to mention increased owner enjoyment."
Deciphering the Data
The report, which is broken down by nine regions and sixty major cities within those regions, lists easy to compare figures of job cost, resale value and cost recouped. So, for instance, say the cost of a minor kitchen remodel in Metropolis USA is $19,699 and the resale value is $16,294. The cost recouped of the the expense would be 82.8%.
What it Means for DIY’ers?
These figures mean profit for DIY’ers, because we can eliminate the outlay of labor and possibly subcontractor expenses from the cost-to-construct figures. Can you say cha ching! But on the practical side, taking into consideration the survey’s findings might help you decide the best project in which to invest your money. This year’s numbers determined some of the best returns were found in replacement projects such as siding and windows for esthetic reasons as well as rising fuel heating and cooling costs. Of course, the enjoyment of a remodeled kitchen cannot be disputed. Which leads to this interesting fact: consistently, minor kitchen remodels have higher cost-recouped value than a major kitchen remodel.
Where to Get the Information
Go to REALTOR Magazine for further information as well as a table for the regional cost vs. value table. For figures for specific cities, visit Remodeler’s Magazine where, for 10 bucks, you can order a detailed report. If the 10 bucks is an issue, you could get in touch with an obliging realtor who would be able relay the information from their December issue of REALTOR Magazine. But be prepared to be added to their contact lists.