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Kitchen and bathroom remodeling projects are returning more of a
homeowner’s investment than ever before, according to a new report
released by the National Association Of Realtors and Remodeling Magazine.
Bathrooms Are Profitable!
Many homeowners who complete midrange bathroom remodels can expect to
make money; the cost on a national average for this project is $10,499,
and the return is $10,727, or 102.2%, compared with 87.5 percent in 2002.
On average, major midrange kitchen remodels cost $43,862 and return
$39,920, or 91% of the costs to remodel, up from 66% in 2002.
Nationally, homeowners who add an attic bedroom spend an average of
$39,188, and on resale, they recoup 93.5% of the cost. Master suites,
however, do not fare as well; an upscale addition, which costs $137,891 on
average, returns only $110,512 on resale, or approximately 80.1% of the
remodeling expense.
America’s homeowners spent more than $139 billion on home
improvements and repairs in 2005, according to data from Harvard’s Joint
Center for Housing Studies.
However, these figures are national averages. When regional variations
are examined it's clear that improvements to homes in higher valued
markets such as New York, Boston and San Francisco will typically provide
a better return on investment than homes in lower value markets.
Regional Variations
The desirability of different remodeling projects varies by region and
metropolitan area. In the West, window replacements are highly
valued, perhaps due in part to insulation and cooling concerns in desert
regions, with nearly 103% of costs recouped on sale. Westerners also
prefer remodeled kitchens and basements; in this region, for example, a
minor midrange kitchen remodel may return 112.3%, and a basement remodel
is estimated to return 108%.
In the Midwest, however, the same kitchen and basement projects
return only 85% and 73%, respectively. Midwest buyers appreciate homes
with updated siding; midrange and upscale siding replacements return 96%
and 98% of the project costs, respectively. Siding replacement projects
fared well at resale in all four regions, likely because new siding is a
relatively inexpensive way to update and refresh a home’s curb appeal.
Buyers in the South are partial to upscale bathrooms, which
return an average of 98.5% of project costs. When considering resale
value, however, Southerners may want to think twice about midrange window
replacements; this improvement, which is so popular in the West, only
returns an average of 83.7% of project costs in the South.
In the East, a midrange attic bedroom addition returns an
average of 98.1% at resale, but a home office remodel only returns 75%. In
fact, remodeling projects that involved home offices were among the lowest
returns on investment across all four regions. |
