Cost vs Value / 2005

What Renovations Add Value at Resale?

The amount that a remodeling project adds to the sales price depends on the condition of the rest of the house as well as the value and condition of comparable homes nearby. In some cases, the value of a remodel at resale is more than 100 percent of its cost. This generally happens in markets where property values are rising rapidly, but it can also occur when buyers regard certain types of amenities as standard for the area. For example, in a neighborhood where most homes have an updated kitchen, remodeling may well increase the value of the home beyond the cost of construction. Conversely, having an outdated kitchen in this case could cause the home to sit on the market for longer and eventually sell for less than similar homes in the area.
Four renovations produce the greatest return in our region. Two projects, siding and window replacement, reflect the importance placed on appearance and efficiency; the others, kitchen and bath renovations, are consistent performers in almost all markets. In the eastern U.S. updating a 200 square foot kitchen, including new countertops, cooktop and wall oven but replacing only the cabinet fronts costs $15,172 on average and recoups 100.9% of this when the house is sold. Improving an outdated bathroom including replacing fixtures, a tub with ceramic tile surround, standard toilet, solid surface counter with double sink, recessed medicine cabinet with light, ceramic tile floor, and vinyl wallpaper will run $10,978 on average and add 104.4% at resale. Replacing 1,250 square feet of existing siding with new vinyl siding, including all trim will cost $7190 and recoup 103.7%. Replacement of 10 existing 3-by-5-foot double-hung windows without disturbing the interior trim will run $9831 and will recoup 90.4% of it’s value at resale.

Renovations can be a smart investment, but ultimately the best reason for a remodel is to enjoy the improvement of your home. If you would like a copy of the complete 2005 Cost vs. Value Report, please send an e-mail to sean@smre.net.