For the second year in a row, Realtors report that exterior remodeling projects return the most money as a percentage of cost, as detailed in the 2008 Remodeling Cost vs. Value Report.
The 2008 Remodeling Cost vs. Value Report compares construction costs with resale values for 30 midrange and upscale remodeling projects comprising additions, remodels and replacements in 79 markets across the country, expanding from 60 markets last year. Data are grouped into nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 11th consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine, as Realtors® provided their insight into local markets and buyer home preferences within those markets.
On a national level, wood deck additions and all types of siding replacements – upscale fiber cement, midrange vinyl, and upscale foam-backed vinyl – returned more than 80 percent of project costs upon resale. Of these, the most profitable project was upscale fiber cement siding, which recouped 86.7 percent of costs, followed by wood decks at 81.8 percent, midrange vinyl siding at 80.7 percent, and upscale foam-backed vinyl siding at 80.4 percent.
"Because today's buyers have much more to choose from in the way of inventory, any home for sale must make a positive first impression," said National Association of REALTORS® President Charles McMillan. "As a trusted source for real estate information, REALTORS® understand what attracts and motivates their buyer clients, which is why the results of this year's Cost vs. Value report underscore the importance of curb appeal in the buyer's eye."
In addition to wood decks and siding, window replacements and kitchen remodels also returned a relatively high percentage of remodeling costs on a national basis. All types of window replacements – upscale and midrange wood and upscale and midscale vinyl – returned more than 76 percent of costs. A major midrange kitchen remodel returned 76.0 percent of project costs, while a minor midrange kitchen remodel returned 79.5 percent of costs.
On a national level, bathroom remodels, while still a relatively good investment, do not return as high a percentage as in previous years. A midrange bathroom remodel was estimated to return 74.4 percent on resale, comparable to a midrange attic-to-bedroom conversion, at 73.6 percent of costs recouped, and a midrange basement remodel, at 72.7 percent of costs recouped.
The least profitable remodeling projects in terms of resale value were home office remodels, sunroom additions, and back-up power generators, returning only 54.4 percent, 56.6 percent, and 57.1 percent, respectively, of project costs.
The resale value of any given remodeling project depends on a variety of factors, including the home's overall condition, availability and condition of surrounding properties, location, and regional economic climate.
"It's important to consult an experienced and knowledgeable Realtor in your area when you want to enhance the value of your home," according to Silicon Valley Association of REALTORS® President Leannah Hunt. "Realtors see hundreds of homes every year and can provide valuable insight into what types of projects and improvements can make a difference with buyers. They also know what types of improvement projects are permitted and regulations involved in your particular area."
Results of the report are summarized in the December 2008 issue of REALTOR® Magazine. Full project descriptions, as well as national, regional and local project data for the 79 cities covered by the report are posted at www.costvsvalue.com. "Cost vs. Value" is a registered trademark of Hanley Wood, LLC.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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