Report Out on Remodeling Costs and Resale Value

[missmanors]

Remodeling Magazine issues a report each year, and has done so for the past two decades. The report called "Cost vs. Value Report" is a detailed analysis of key projects, including the cost and the typical value that is recouped from the home's sale by having those projects done.

The report from 2003 stated that the average home improvement project returned 82.5% of the money spent. In 2007's report the figure had dropped to 70%. Part of this decline can, of course, be due to the troubled real estate market.

A spokesperson for the report said that a shift can be seen, as the housing market cools, fewer upscale projects are being done and more projects that give a home curb appeal are being seen.

Some of the remodeling projects which will help in selling your home are: decks, windows, siding and roofing which all remain solid projects. With interior projects such as kitchen, and bath projects still being popular. What is now missing from today's report? Big-budget projects.

Many projects won't give you 100% return on the money that you invest, but these projects will help you to sell your home more quickly, instead of sitting on the market.

Five typical projects which are included in the survey and some advice from some New York real estate experts and other professionals are:

Please note: these are from Remodeling magazine, costs are based on the price of labor and materials in the mid-Atlantic region of the country.



DECK

Project: Add a 16-by-20-foot deck supported by 4-by-4 posts on concrete piers. Include a built-in bench and planter, three-step stairway and railing with posts and balusters.

Cost: $10,676

Amount recouped on resale: 83%

What the experts say: Surprisingly, although a deck is one of the cheapest home- improvement projects, a number of Long Island real estate agents are of the opinion that it's often not worth the effort. "If a deck is old or rotting, you're better off just tearing it down," says Mark Malsky, owner of Babylon-based RE/MAX Signature Real Estate. "No deck is just as good as a new deck, even if everyone else in the neighborhood has a deck. Most buyers can imagine what a deck would look like and cost."

SIDING

Project: Replace 1,250 square feet of existing siding with new fiber-cement siding - a more upscale and durable siding. It should be factory- primed and -painted. Include all 4/4 and 5/4 trim, using either fiber-cement boards or cellular PVC.

Cost: $13,359

Amount recouped on resale: 86%
What the experts say: This kind of project falls squarely in the realm of curb appeal - the kind of project every real estate agent tends to favor. Outdated - or, worse, damaged - siding can be a liability from the moment the buyer sets eyes on the home. This is where it's worth spending money and, comparatively, the price of the project is still on the low end. With painting, siding is "the No. 1 place to make an improvement for a sale," says Dottie Herman, president and chief executive of Prudential Douglas Elliman Real Estate.

WINDOWS

Project: Replace 10 3-by-5-foot double-hung windows with insulated, vinyl windows
Cost: $11,083

Amount recouped on resale: 77.8%
What the experts say: Windows are like siding - extremely important in first impressions. As a prime curb-appeal project, they return a high rate on dollars spent. "What you notice first is usually the impression that lasts," says Hofstra's Robert Campbell, who teaches real estate. "Windows are always important."

BATHROOM

Project: Add a new bathroom - in Remodeling magazine's example, it is 6 by 8 feet. Include a marble vanity top with molded sink; standard chrome faucets; fiberglass tub/shower with ceramic tile surrounding.

Cost: $40,290

Amount recouped on resale: 55.4%
What the experts say: The return on investment numbers here is not great, but local experts suggest you not base your decision on numbers alone. "It's like trying to convince someone to continue investing in a stock that is declining in value," says Robert Campbell, who teaches real estate and finance at Hofstra University's Frank G. Zarb School of Business. "Except you already own the home," he says. And spending the money on a project may mean the difference between a quick sale and a home that lingers on the market for many months. So those who look at just the numbers to calculate a return are probably missing the point, he says.

KITCHEN

Project: Update kitchen - in Remodeling magazine's example, it's 200 square feet - with 30 feet of cabinetry, as well as countertops, sink and faucets. Replace cabinet fronts with new wood doors, and change drawers and hardware. Install new energy-efficient appliances. Replace flooring.

Cost: $21,908

Amount recouped on resale: 77%
What the experts say: Dottie Herman, president and chief executive of Prudential Douglas Elliman Real Estate, points out that money spent on renovating kitchens and baths can be crucial. "People notice an outdated bath or kitchen very quickly," she says. "But you don't want to do anything out of the ordinary. " A restrained approach is best. "We recently had to sell a home where the seller had just built her dream kitchen. What she didn't realize was that her favorite yellow was not to everyone's liking," Herman says.

[flip_it_fast]

It seems as though there are pros and cons of doing many of the projects you listed. They will help you by the way of making the home possible easier to sell but will cost you money off of your profit by doing so. I would imagine though that you would be better of by doing these things and getting a quicker sale instead of having to pay taxes and so forth for a house sitting on the market.

[Lady Flipper]

Boy, they sure spent a lot of money on those projects. I just got through building a new house of better quality than what they describe and didn't spend near as much for those things. Except the deck, which is timbertech larger and two levels, 2 sets of stairs, railings etc and partially roofed and enclosed.

Maybe it's the location...

Timbertech decking is the way to go, holds its color (other composite deckings do not) and is pretty carefree and will look good indefinitely. Plus it's "green".

Soon I'll post a bunch of pics...

[missmanors]

This is why I made sure to say that this is in the mid-Atlantic area of the country.........seems that costs there are much higher than in most of the country.

I can't imaging paying those costs for these remodeling projects, but I'm from a small town in Ohio, so costs aren't nearly as high. (Plus hubby is good at building so he can do most of these things himself.)