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  Remodeling Projects: 

    FEATURE: 2005 COST vs. VALUE REPORT

Remodeling's Payoff

The annual report compares construction costs with resale values in 58 markets.

The “Cost vs. Value Report,” published each year in conjunction with Remodeling magazine, gives you a city-by-city guide on what various home projects will pay back at resale. This year’s report features data for five more markets than last year* and a new project—a mid-range home office remodel.

On a somber yet optimistic note, we included New Orleans’ results, compiled before Hurricane Katrina, with the firm belief that in time the Big Easy’s real estate market will once again be thriving.

Where we get the data

Cost data for the report come from HomeTech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors and employs an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, sub-trades, and contractor overhead and profit.

Resale values (“cost recouped” in the tables) are aggregated from estimates provided by National Association of REALTORS® members. E-mail surveys containing construction costs and median home price data for each city were sent to more than 20,000 appraisers, brokers, and salespeople, yielding data from more than 1,600 respondents (an 8 percent response rate).

Specpan, an Indianapolis-based market research company, hosted the Web-based survey and collected and compiled the data. Farnsworth Group, a sister company to Specpan, analyzed survey data and provided pre- and post-survey consulting.

What do the numbers mean?

If some remodeling job cost figures appear too high or too low, one cause is the leveling effect of averaging. The demand for—and cost of—remodeling services can vary greatly within a given metro area.

Averaging also affects the value side of the equation. The amount recouped for an actual remodeling project depends on the condition of the rest of the house, as well as the value of similar homes nearby, the availability of new homes, and the rate at which property values are changing. Location in an urban, suburban, or rural setting will also affect a home’s value.

In some cases, the value of the remodeling project at resale is more than 100 percent of its original cost. This usually happens in markets where property values are rising very rapidly, but it can also occur when buyers regard certain types of remodeling projects as “standard.”

For example, in a neighborhood where most homes have an updated kitchen, remodeling a kitchen may well increase the resale value of the home beyond the cost of construction. In some cases, in fact, not redoing the kitchen could cause the home to sit on the market for much longer than normal and to eventually sell for less than similar homes in the area.

Keeping up with the Joneses can be a savvy investment move. But ultimately, the best reason for a remodel is to enjoy it.—Sal Alfano, editorial director of Remodeling magazine, and Christina Hoffmann Spira, managing editor of REALTOR® Magazine

Confidence is high

National figures have a confidence level of 99 percent (+/– 4 percent), according to Farnsworth Group. Dividing the results into regions effectively reduces the number of responses and likewise the confidence level. Data for cities are the least reliable because of the smaller number of responses.

Survey confidence levels
National: 99% (+/– 4%)
East 95% (+/– 7%)
Midwest 95% (+/– 7%)
South 95% (+/– 4%)
West 95% (+/– 5%)

Note: The confidence level is a measure of statistical accuracy. The national level of 99 percent (+/– 4 percent) means that 99 percent of the time, national results for this survey will fall within 4 percent to either side of the national numbers published here.


Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.

Minor Kitchen Remodel
Project Description: In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new raised-panel wood doors and drawers. Replace wall oven and cooktop with new energy-efficient models. Replace laminate countertops. Install midpriced sink and faucet. Repaint trim, add wall covering, and replace existing flooring with resilient flooring.

Minor kitchen remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$14,913
$14,691
98.5%
East Average:
$15,172
$15,316
100.9%
Midwest Average:
$15,426
$13,151
85.3%
South Average:
$13,998
$13,498
96.4%
West Average:
$15,328
$17,209
112.3%



Midrange Major Kitchen Remodel
Project Description: Update an outmoded 200-square-foot kitchen with design and installation of a functional layout of 30 linear feet of semicustom-grade wood cabinets, including a 3-by-5-foot island, laminate countertops, and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system; built-in microwave, dishwasher, garbage disposal; and custom lighting. Add resilient flooring. Finish with painted walls, trim, and ceiling.

Midrange
Major kitchen remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$43,862
$39,920
91.0%
East Average:
$44,659
$42,490
95.1%
Midwest Average:
$45,237
$36,691
81.1%
South Average:
$41,133
$36,329
88.3%
West Average:
$45,242
$45,353
100.2%


Upscale Major Kitchen Remodel
Project Description: Update outmoded 200-square-foot kitchen with 30 linear feet of top-of-the-line custom cherry cabinets with built-in sliding shelves and other interior accessories. Include stone countertops with imported ceramic or glass tile backsplash; built-in refrigerator, cooktop, and 36-inch commercial grade range and vent hood; and built-in warming drawer, trash compactor, and combination microwave and convection oven. Install high-end undermount sink with designer faucets and built-in water filtration system. Add general and task lighting, including low-voltage under-cabinet lights. Install cork flooring with cherry trim.

upscale
Major kitchen remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$81,552
$69,194
84.8%
East Average:
$82,528
$70,718
85.7%
Midwest Average:
$83,333
$64,586
77.5%
South Average:
$77,786
$65,111
83.7%
West Average:
$83,720
$77,812
92.9%

Attic Bedroom
Project Description: In a house with two or three bedrooms, convert unfinished space in the attic to a 15-by-15-foot bedroom and a 5-by-7-foot bath with shower. Include a 15-foot shed dormer, four new windows, and closet space under the eaves. Insulate and finish ceiling and walls. Carpet floor. Extend existing HVAC to new space. Retain existing stairs, but add rail and baluster around stairwell.

Attic bedroom
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$39,188
$36,649
93.5%
East Average:
$40,735
$39,964
98.1%
Midwest Average:
$41,281
$33,752
81.8%
South Average:
$34,786
$31,319
90.0%
West Average:
$41,244
$43,357
105.1%

Deck Addition
Project Description: Add a 16-by-20-foot deck using pressure-treated SYP (southern yellow pine) joists supported by 4-by-4 posts set into concrete footings. Install composite deck material in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing system using either a matching system made of the same composite as the decking material or a compatible vinyl system.

Deck addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$11,294
$10,196
90.3%
East Average:
$11,366
$10,879
95.7%
Midwest Average:
$11,585
$9,869
85.2%
South Average:
$10,588
$8,731
82.5%
West Average:
$11,873
$11,814
99.5%

Basement Remodel
Project Description: Create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath, and a 2-by-12-foot auxiliary room. Painted drywall throughout; exterior walls are insulated. Include five six-panel primed hardboard doors. Main room: Fifteen recessed ceiling light fixtures, three surface-mounted light fixtures, and a snap-together laminate flooring system. Bathroom: Toilet, vanity with cultured marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, and recessed medicine cabinet. Bar area: 10 linear feet of raised-panel oak cabinets with laminate countertops, stainless steel bar sink, under-counter refrigerator, and vinyl floor tile.

Basement remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$51,051
$46,010
90.1%
East Average:
$52,585
$43,095
82.0%
Midwest Average:
$53,114
$38,767
73.0%
South Average:
$46,501
$45,025
96.8%
West Average:
$53,359
$57,759
108.2%

Midrange Bathroom Remodel
Project Description: Update an existing 5-by-7-foot bathroom that’s at least 25 years old. Replace all fixtures to include 30-by-60-inch porcelain-on-steel tub with 4-by-4 ceramic tile surround, new single-lever temperature and pressure-balanced shower control, standard white toilet, solid surface vanity counter with integral double sink, recessed medicine cabinet with light, ceramic tile floor, and vinyl wallpaper.

Midrange Bathroom remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$10,499
$10,727
102.2%
East Average:
$10,978
$11,466
104.4%
Midwest Average:
$11,047
$9,885
89.5%
South Average:
$9,293
$9,596
103.3%
West Average:
$11,025
$12,340
111.9%


Upscale Bathroom Remodel
Project Description: Expand an existing 5-by-7-foot bathroom to 9 by 9 feet within existing house footprint. Add another window, bringing total glazing area to 30 square feet. Relocate and replace tub with custom 4-by-6-foot dual shower with top-of-line fittings and full-body-wash shower wall, tile, glass block surround, and glass door. Relocate and replace toilet. Add bidet. Add medium-range stone tops in custom vanity cabinet with twin designer undermount sinks and polished nickel faucets. Add linen/towel storage closet. Include ceramic tile floor, papered walls, and hardwood trim. Add general and spot lighting and a humidistat-controlled exhaust fan.

upscale Bathroom remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$26,052
$24,286
93.2%
East Average:
$26,950
$26,211
97.3%
Midwest Average:
$27,423
$21,379
78.0%
South Average:
$23,428
$23,087
98.5%
West Average:
$27,172
$26,778
98.5%

Midrange Bathroom Addition
Project Description: Add a full 6-by-8-foot bath located near bedrooms over a crawl space with poured concrete walls. Include cultured-marble vanity top with molded sink, standard chrome faucets, 30-by-60-inch fiberglass tub/shower with ceramic tile surround, single-lever temperature and pressure-balanced faucet, white low-profile toilet, general and spot lighting, mirrored medicine cabinet, linen storage closet or cabinet, vinyl wallpaper, and ceramic tile floor.

Midrange Bathroom addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$22,977
$19,850
86.4%
East Average:
$24,010
$21,959
91.5%
Midwest Average:
$24,157
$17,998
74.5%
South Average:
$20,055
$17,648
88.0%
West Average:
$24,560
$22,481
91.5%


Upscale Bathroom Addition
Project Description: Add a 9-by-9-foot master bath to existing master bedroom over a crawl space. Include a 4-by-4-foot neo-angle shower with ceramic tile walls, recessed shower caddy, body spray fixtures, and frameless glass enclosure. Include a customized whirlpool tub, countertop with two integral sinks, two mirrored medicine cabinets with lighting, a compartmentalized commode area with one-piece toilet, and a humidistat-controlled exhaust fan. Use larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding. Add general and spot lighting. Cabinetry includes a custom drawer base and wall cabinets. Extend HVAC system, and include electric in-floor heating and heated towel bars.

upscale Bathroom addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$47,212
$40,488
85.8%
East Average:
$48,515
$42,322
87.2%
Midwest Average:
$48,999
$36,178
73.8%
South Average:
$43,028
$37,952
88.2%
West Average:
$49,580
$46,335
93.5%

Midrange Siding Replacement
Project Description: Replace 1,250 square feet of existing siding with new vinyl siding, including all trim.

Midrange Siding replacement
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$7,239
$6,914
95.5%
East Average:
$7,190
$7,459
103.7%
Midwest Average:
$7,280
$6,959
95.6%
South Average:
$6,533
$6,028
92.3%
West Average:
$8,229
$7,510
91.3%


Upscale Siding Replacement
Project Description: Replace 1,250 square feet of existing siding with new fiber-cement siding, factory preprimed and prepainted. Include all 4/4 and 5/4 trim using either fiber-cement boards or cellular PVC (polyvinyl chloride) lumber.

upscale Siding replacement
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$10,393
$10,771
103.6%
East Average:
$10,289
$11,822
114.9%
Midwest Average:
$10,361
$10,181
98.3%
South Average:
$9,476
$9,765
103.0%
West Average:
$11,816
$11,620
98.3%

Window Replacement
Project Description: Replace 10 existing 3-by-5-foot double-hung windows with wood replacement windows, double-glazed and exterior clad in vinyl or aluminum. Wrap existing exterior trim as required to match. Don’t disturb existing interior trim.

Window replacement
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$9,684
$8,681
89.6%
East Average:
$9,831
$8,887
90.4%
Midwest Average:
$10,139
$8,484
83.7%
South Average:
$8,973
$7,506
83.7%
West Average:
$10,007
$10,282
102.7%

Roofing Replacement
Project Description: Remove existing roofing to bare wood sheathing and dispose of properly. Install 30 squares of 235-pound fiberglass asphalt shingles (minimum 25-year warranty) with new felt underlayment, galvanized drip edge, and mill finish aluminum flashing. Assume a 5-square hip roof, custom flashing at two average-sized skylights, and custom cap treatment at vented ridge.

Roofing replacement
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$11,164
$9,456
84.7%
East Average:
$12,155
$10,856
89.3%
Midwest Average:
$12,401
$8,674
69.9%
South Average:
$9,093
$7,983
87.8%
West Average:
$11,557
$10,769
93.2%

Family Room Addition
Project Description: In a style and location appropriate to the existing house, add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with batt insulation, prefinished hardwood floor, and 180 square feet of glazing, including windows, atrium-style exterior doors, and two operable skylights. Tie into existing HVAC. Add electrical system to code, including 12 recessed ceiling lights.

Family room addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$54,773
$45,458
83.0%
East Average:
$56,464
$48,690
86.2%
Midwest Average:
$57,599
$41,842
72.6%
South Average:
$48,778
$40,239
82.5%
West Average:
$58,081
$52,820
90.9%

Home Office Remodel
Project Description: Convert an existing 12-by-12-foot room to a home office. Install custom cabinets to include 20 feet of laminate desktop, a computer workstation, and wall cabinet storage. Rewire room for computer, fax machine, and other electronic equipment, as well as cable and telephone lines. Include drywall interior, painted trim, and commercial-grade carpeting.

Home office remodel
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$13,143
$9,569
72.8%
East Average:
$13,688
$10,211
74.6%
Midwest Average:
$14,120
$8,610
61.0%
South Average:
$11,500
$8,444
73.4%
West Average:
$13,738
$11,395
82.9%

Midrange Master Suite Addition
Project Description: On a house with two or three bedrooms, add a 24-by-16-foot master bedroom suite over a crawl space. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid surface countertop. Bedroom floor is carpet; bath floor is ceramic tile. Paint walls, ceiling, and trim. General and spot lighting. Exhaust fan.

Midrange
Master suite addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$73,370
$60,460
82.4%
East Average:
$75,959
$64,419
84.8%
Midwest Average:
$77,343
$57,592
74.5%
South Average:
$65,037
$52,977
81.5%
West Average:
$77,640
$69,425
89.4%


Upscale Master Suite Addition
Project Description: Add a spacious sleeping area with lounging/sitting area adjacent to large master bath. Include custom bookcases and built-in storage with millwork details; high-end gas fireplace with stone hearth and custom mantle; and large walk-in closet/dressing area. Add French doors accessing outdoor space. Bath: Include a large walk-in shower with dual shower system, stone shower walls and floor, and custom frameless glass enclosure. Add whirlpool tub bordered on two sides by windows and built into granite or marble platform. Include two sinks in separate custom vanities with stone countertops and large mirrors. Create partitioned area for luxury one-piece toilet. General: Add bar sink, undercounter refrigerator, custom cabinetry, granite or marble countertop, and microwave. Include soundproofing, in-floor heating, custom wall finishes and hardware, general and spot lighting.

upscale
Master suite addition
 

Job
Cost
Resale
Value
Cost
Recouped
National Average:
$137,891
$110,512
80.1%
East Average:
$140,808
$113,387
80.5%
Midwest Average:
$142,727
$105,329
73.8%
South Average:
$127,990
$103,373
80.8%
West Average:
$143,026
$122,484
85.6%


Remodeling magazine, published by Hanley-Wood LLC, has been producing this report annually for 19 years. We’d like to thank the editors and designers of Remodeling, as well as the REALTORS® who contributed to bringing you this report.

Remodeling magazine’s “Cost vs. Value Report.” ©2005 by Hanley-Wood LLC. Republication of the report is expressly prohibited without written permission of Hanley-Wood LLC.

* We received sufficient data for 58 out of 60 markets surveyed compared with only 53 last year. Because of insufficient data from Grand Rapids, Mich., and Providence, R.I., no resale value numbers for those markets are provided.

 


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