Since 2003, Remodeling Magazine has been annually gathering data of the cost of remodeling projects across the United States to generate national and regional remodeling cost averages, and gets Realtor’s input of the increase in home resale value averages if the home were placed for sale within a year. This information is compiled and generates the Cost versus Value Report. It is a valuable resource if you are thinking of selling in a year, or if you are thinking about remodeling and want to get an idea of the average cost to plan your remodeling budget. The report is also a measurement of an economic indicator of the housing market, which shows great improvement.
The National Association of Home Builders reports approximately 60% of home owners remodel soon after they have purchased their home to customize it to their lifestyle and personality. Those who have been in their home for a while, remodel to update and improve their experience (hyperlink to Joy of Remodeling blog article) in their home about every 5-10 years.
The average cost of a remodeling project has increased 4.7%, but the rate of return on investment is 6.7% higher than the 2015 report. The biggest gains were for “upscale” projects, rather than the “midrange” project category. Some of the top return on values as compared to the previous year were for a two story addition (8.1% more of a return on investment), upscale master suite addition (6.5% more) and a major, upscale kitchen remodeling project (4.2% higher return on investment). For those who are planning to sell and move, curb-appeal remodeling has the best return, such as addition of stone veneer, garage door upgrade, and having a steel front entry door.
Based on the trend of these reports, the housing market recovery is strong, and Remodeling Magazine projects that the value of return of investment (ROI) in remodeling may grow to 7.3% in 2016. The Phoenix Remodeling market is within in the Mountain Region Report. Below is the average costs for a midrange to upscale cost (some did not have a range) and what Realtors project would be the increase in home value if one sold their home within a year.
|Two Story Addition||$166,123||75.2%|
|Family Room Addition||$83,137||73.4%|
|Master Suite Addition||$112,446 – $229,147||67.6%|
|Bathroom Remodel||$17,051 – $59,920||67.2% – 53.4%|
|Major Kitchen Remodel||$58.352 – $118,054||53% – 64.4%|
Its nice to think that someone would pay 75% of the cost of you tailor and beautify your home just the way you want it, but who would want to move within a year? Happy Home Remodeling!
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