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Wednesday, December 21, 2005

Remodel with an Eye toward Resale

The following article discusses a report from NAR - the National Association of Realtors - which is an American association. The stats presented are all from the US as well, but they still apply to our market.

RISMEDIA, Dec. 22 — Kitchen and bathroom remodeling projects are returning more of a homeowner’s investment than ever before, according to the 2005 Cost vs. Value Report published 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. 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.

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, however, do not fare as well; an upscale addition, which costs $137,891 on average, returns only $110,512 on resale, or approximately 80.1 percent of the remodeling expense.

The Cost vs. Value Report includes information provided by NAR 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 first this year: a home office remodel. Given that America’s homeowners spent more than $139 billion on home improvements and repairs over the past year, according to data from Harvard’s Joint Center for Housing Studies, the report contains valuable information for anyone who is considering embarking upon a remodeling project.

“The desirability of certain home features varies by neighborhood and is heavily influenced by buyers’ expectations in a given area,” said Stevens. “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to a one-bathroom house in a neighborhood where most homes already have two may not return as much as remodeling an outdated bathroom in that same community.” In the final analysis, however, homeowners who are thinking about a remodeling project should consider their own needs and desires as well as those of the home’s future inhabitants.

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