2009 Remodeling Cost vs Resale Value

This is the 4th year I’ve shared the results of the Cost vs Value Remodeling Report, 2008-2009, where data is collected each summer via survey (4,000 respondents last year). What I found most interesting was the trend graph comparing lasts years results to the prior 6 years (2003 to 2009). Given the ups and downs of the economy and the housing market, noone was willing to project results … and people were pleased to see the drop in remodeling (home) values start to stabilize.

... from Hanley Wood's Cost vs Value Report, 2009

Some of the most interesting facts follow, with overall trends showing more focus on smaller, low-maintenance projects and an emphasis on essentials over extras.

• Decline in average, cost-to-value ratios lower than previous year … at 3.86%.
• Construction costs continue to rise, going up 2.67% even though home values are declining.
• Exterior replacement projects top the rankings, with 8 of the top 10 spots. Factors include curb appeal for resale plus these projects are less expensive than additions.
• Energy efficient projects like replacement windows and siding, rank high on the list.

Top Projects (Cost vs Value Perspective)

There are quite a few remodeling projects where you’ll recover more than 75% of the cost. Most of these projects are exterior improvements. Note that the top 10 projects are still delivering 75 percent or more of their cost, when it comes to resale value … so you should still consider these projects for both immediate benefits (look, energy savings and comfort) in addition to resale value.

• Consider exterior remodeling projects which recover at least 75% of their cost
  • Deck addition (wood) with average cost of $10,601 … will recover 81.8%
  • Siding replacement (vinyl) with average cost of $10,256 … should recover 80.7%
  • Window replacement (wood) for average cost of $11,512 … projected to recover 77.7%
  • … or upper scale wood window replacement with cost of $17,580 … should recover 76.5%
  • Window replacement (vinyl) with average cost of $10,537 … will recover 77.2%
  • … or upper scale vinyl window replacement with cost of $13,608 … projected to recover 79.2%
  • Siding replacement (fiber cement) with cost of $13,177 … expected to recover 86/7%
  • … while foam back vinyl replacement siding with cost of $12,528 … will recover 80.4%

• Plan for interior remodeling projects that recover at least 75% of their cost
  • Major kitchen remodel, with cost of $56,611 … will recover 76.0%
  • … or minor kitchen remodel, with cost of $21,246 … will recover 79.5%

Research Your Remodeling Project FIRST!

• Good planning starts with pick 1 or 2 projects, and doing in-depth research about cost-value data for those projects … in your part of the country (data available for 9 regions).
• Make sure you understand all costs by reviewing the project description and cost components, separating out labor and materials which each contribute cost to the project.
• Compare the total cost to your budget for the project. If your budget is lower, identify which items you can remove from your project.
• If you’re trying to squeeze more out of your budget, identify items you can complete yourself. Be realistic, as Mr Handyman sometimes undoes what a homeowner has tried to do. The best home owner tasks are buying and transporting materials plus demo. A friend recently remodeled his kitchen, removing the cabinets plus floor and wall tile himself, leaving the installation of the new cabinets to the professional.
• When you don’t have the time, tools or skills, call your local Mr/My Handyman company. For larger/specialty projects you will need to find the appropriate contractor for the job. Calling your local Mr Handyman owner for recommendations is a good place to start.