When It Comes to Remodeling, It’s What’s Outside That Counts!

Three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades according to the 2007 Remodeling Cost vs. Value Report.

The most profitable project, recouping 88 percent of costs, upon resale, on the national level was upscale siding replacement while wood deck additions and wood window replacements returned 85 percent and 81 percent, respectively. On a national average, the only interior project to return more than 80 percent of remodeling costs this year was a minor kitchen remodel, returning 83 percent of project costs at resale.

“The results of this year’s Cost vs. Value report underscore the importance of curb appeal in the buyer’s eye,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “Realtors® know what attracts buyers in their local markets and can help your house put its best façade forward, so to speak – it’s another way Realtors® add value to the real estate transaction.”

Comparing construction costs with resale values for 29 midrange and upscale remodeling projects comprising additions, remodels and replacements in 60 markets across the country is the goal of the 2007 Remodeling Cost vs. Value Report. Following the divisions established by the U.S. Census Bureau the data are provided for nine U.S. regions. Produced by Hanley Wood, LLC, this is the 10th consecutive year that the report, which was completed in cooperation with REALTOR® Magazine. Realtors® provided their insight into local markets and buyer home preferences within those markets for the report.

Four new projects were added this year: the aforementioned wood deck addition, a back-up power generator, and both a midrange and upscale garage addition, which nationally, only returned 58 percent of the investment on resale, although the return was highest at 68 percent in the West South Central region, which comprises Arkansas, Louisiana, Oklahoma, and Texas. Buyers in the Pacific region of Alaska, California, Hawaii, Oregon and Washington value their garages shown by midrange garage addition returned nearly 70 percent nationally but 88 percent in this region, while the upscale garage addition returned approximately 65 percent nationally but 78 percent in this area.

Homeowners could also expect to see some of the highest percentages of remodeling expenses returned at resale, since 13 of the 29 projects returning 90 percent or higher of project costs in the Pacific region. Homeowners in the East North Central region of Illinois, Indiana, Michigan, Ohio and Wisconsin might expect some of the lowest returns with the only project of upscale fiber cement siding returning 82 percent of costs recouped, while less than 60 percent of project costs where returned by nine projects.