The Cost of a Remodel
(MIBOR Fast Track (4/14/08)

According to the National Association of REALTORS®’ 2007 Profile of Home Buyers and Sellers (featured in the March 10 edition of [Fast Track]), over half of sellers engaged in some kind of home improvement or remodeling project within three months of listing. Obviously a popular decision, but is every project worth it? And when deciding which project to tackle, how do you know where the money will be best spent?

Remodeling Online has some answers. The 2007 “Remodeling Cost vs. Value Report” provides a percentage of recouped cost on 29 typical home remodel projects. Projects range from garage and bathroom additions to a minor kitchen remodel and window replacement. Breaking the U.S. into nine regions, the report provides national and regional averages for further detail.

What feature will provide sellers with the highest recouped cost on their investment? Siding replacement (fiber-cement). Nationally, this project provides an 88.1 percent recouped cost and in the East North Central region (Wisconsin, Michigan, Illinois, Indiana and Ohio) 82.4 percent is recouped – the highest percentages for both locations. The lowest recouped cost projects in the East North Central region include adding on a sunroom, installing a back-up power generator and a home office remodel.

Cost information for the report is pulled from HomeTech Information Systems, a remodeling estimating software company. HomeTech creates its database of cost information from a network of remodeling contractors and suppliers. Figures include labor, material, subtrades and contractor overhead and profit. Values used in the report were provided by the National Association of REALTORS®. A survey of over 2,500 appraisers, sales agents and brokers provided an estimated value of what remodeling projects would add to the home at resale.