For many Bucks and Montgomery County homeowners thinking about remodeling, an important question comes to mind: What value will this project add to the sale price of my home?
Each year, Remodeling Magazine publishes a Cost vs. Value report that calculates the average return on investment (ROI) percentage for the most common home improvement projects. Here is some background to help you understand what’s on it and what it means for you:
Cost vs. Value 101
How is data collected?
Data for the Cost vs. Value report comes from surveying real estate professionals about the value of specific projects in their area. These answers are combined with other variables like local GDP, recent trends in home sales, cost of new construction, and more to calculate average ROI nationally, regionally, and even by city.
Trends for 2022
In general, exterior improvements such as garage door, siding, and window replacement rank high on the list, with close to 70% or higher of the cost recouped. Larger projects such as additions or kitchen remodels rank slightly lower, but this should be balanced with the quality-of-life improvement most homeowners experience — especially given how much more time we’re all spending in our homes these days.
Since 2020, supply chain disruptions and building material cost increases have resulted in higher costs of remodeling overall. Although this has led to a decline in the value vs. cost ratio, the decline in 2022 was a mere 1.2% — a strong indication that remodeling projects hold their value even during challenging times.
Let’s take a look at the regional data for three popular project categories:
Project: Major Kitchen Remodel (Midrange)
A midrange kitchen remodel would typically include updating or adding:
- Custom Cabinets
- A new island
- Custom lighting
- More functional layout
Average cost: $86,112
Resale Value: $45,423
Project: Bathroom Remodel (Midrange)
In a typical bathroom remodel, we’d update with:
- New fixtures
- Tub with ceramic tile surround
- New vanity with storage
- Ceramic tile floor
- Painted walls & trim
Average cost: $31,061
Resale Value: $14,881
Project: Master Suite Addition (Midrange)
- Walk-in closets
- Modern bathroom
- Makeup vanity areas
- Recessed lighting
While all this information is good to have, the question “is it worth it?” can only be answered by you. Everyone has a different situation that dictates whether it makes sense to remodel.
If you’ll be moving in the next year or two and want to know what to fix up to get the best offer, the Cost vs. Value report is an excellent resource.
If you’ll be living in your home for the foreseeable future and would like, or need, to make some changes, the Cost vs. Value report may factor in less. After all, there is more than one type of value to consider. Will your remodel improve your everyday life? Do you need to accommodate working from home or a growing family? In these cases, your ROI is much more than a monetary value.
Have questions about the Cost vs. Value report or a potential project you’re considering? Let us know! We’re happy to help however we can.