Bathroom remodeling projects can pay off for homeowners, according to a report by the National Association of Realtors.
Many homeowners who complete midrange bathroom remodels can expect to make money – the cost on a national average for this project is $10,499 and the return is $10,727, or 102.2 percent, compared with 87.5 percent in 2002, according to the report, which the trade group published in Realtor Magazine. The report was also published by Hanley Wood LLC in Remodeling Magazine.
On average, major midrange kitchen remodels cost $43,862 and return $39,920, or 91 percent of the costs to remodel, up from 66 percent in 2002, according to the “Cost vs. Value” report.
Nationally, homeowners who add an attic bedroom spend an average of $39,188, and on resale, they recoup 93.5 percent of the cost. Master suites remodeling projects, which cost $137,891 on average, returns about $110,512 on resale, or approximately 80.1 percent of the remodeling expense, according to an association announcement today.
The report includes information provided by Realtor association members about the resale value of common remodeling projects in 58 U.S. housing markets. The report includes cost data, resale value and percentage recouped at sale for 18 projects, including a home-office remodel. According to data from Harvard’s Joint Center for Housing Studies, America’s homeowners spent more than $139 billion on home improvements and repairs over the past year.
The December issue of Realtor Magazine features 10 of the 18 projects.
“Realtors have industry expertise that goes beyond the initial real estate transaction,” said Thomas M. Stevens, Realtor association president and senior vice president of NRT Inc. “They understand what makes a good home investment, whether their clients are buying, selling or remodeling.”
The desirability of different remodeling projects varies by region and metropolitan area, according to the report. In the West, window replacements are highly valued, perhaps due in part to insulation and cooling concerns in desert regions, with nearly 103 percent of costs recouped on sale. Also, a minor midrange kitchen remodel may return 112.3 percent and a basement remodel is estimated to return 108 percent in the Western region.
In the Midwest, however, the same kitchen and basement projects return only 85 and 73 percent, respectively, the report revealed. Midwest buyers appreciate homes with updated siding; midrange and upscale siding replacements return 96 and 98 percent of the project costs, respectively. Siding replacement projects fared well at resale in all four regions, likely because new siding is a relatively inexpensive way to update and refresh a home’s curb appeal.
Buyers in the South are partial to upscale bathrooms, which return an average of 98.5 percent of project costs. But midrange window replacements in the South return an average of 83.7 percent of project costs.
In the East, a midrange attic bedroom addition returns an average of 98.1 percent at resale, but a home-office remodel only returns 75 percent. Remodeling projects that involved home offices were among the lowest returns on investment across all four regions.
“Local and regional differences in the resale value of remodeling projects are not surprising – the desirability of certain home features varies by neighborhood and is heavily influenced by buyers’ expectations in a given area,” Stevens said. “For example, adding a bathroom to a one-bathroom house in a neighborhood where most homes already have two may not return as much as remodeling an outdated bathroom in that same community.”
“Keeping up with the Joneses can be a savvy investment move,” said Stacey Moncrieff, Realtor Magazine editor. “But ultimately, the best reason for a remodel is to enjoy it.”
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