Remodeling Magazine does an annual survey of hundreds of contractors, realtors and appraisers from 100 metro areas across the United States to determine the average cost of various home remodeling projects, and the percentage that it increased the resale value. It is helpful in getting an idea of how much a project could cost. In their categories, a minor kitchen remodel is basically a facelift of new cabinet doors and replacing with mid-range appliances and fixtures. An upscale bathroom addition would be 100 square feet with all the luxury details, e.g. compartmentalized commode, separate soaker tub and shower, 2 mirrored medicine cabinets with lighting, in-floor heating…). They have twenty-two projects that they analyze.
How concerned should you be about the percentage of cost recouped? Most homeowners are remodeling to customize their home to reflect their tastes and lifestyle to have their home look and function as they want, rather than with the objective of putting it right on the market. Do not expect a project to give a near 100% return, think instead that the future homeowner will be, in effect, paying for a percentage of your project’s cost. In example, if a Major Kitchen Remodel’s (between midrange and upscale) average cost is $99,053 and the cost recouped is 61%, getting that $100,000 kitchen of your dreams could be closer to a net cost of $40,000 with the future homeowner paying $60,000 for what you enjoyed (with the overall trend of home values increasing over time).
According to the Remodeling 2020 Cost vs. Value Report, here are an example of 5 typical remodeling projects.
Results from the Phoenix Market
Project Avg Cost Cost Recouped
Vinyl Window Replacement $17,190 78.6%
Midrange Bathroom Remodel $20,142 68.3%
Minor Kitchen Remodel $22,253 83.4%
Midrange Bathroom Addition $46,327 63.7%
Upscale Bathroom Addition $85,742 68.0%
The good news for the Phoenix market when compared to the national averages are the average cost of the remodeling projects are lower, and the percent of cost recouped is overall higher. Comparing Phoenix’s 2020 Cost vs. Value report with 2019, 15 of the projects increased home values more than they had a year ago. For example, last year, a minor kitchen remodel recouped 73.5% of the cost, this year they report 83.4% of the minor kitchen remodeling cost is recouped.
Happy home remodeling!
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Complete data from the Remodeling 2020 Cost vs. Value Report can be downloaded free at www.costvalue.com. © 2020 Hanley Wood, LLC.
Tagged cost report, design trends, home improvement, home remodeling
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