Remodeling Blues

Posted by: Chris Palmeri on December 3, 2007

As anyone who’s done home remodeling knows, it costs more and takes longer than you originally planned. Now the latest data from the National Association of Realtors and real estate information firm Hanley Wood gives you another reason to put off replacing those old cabinets: You’re getting even less of your investment back.

The new Remodeling Cost vs. Value Report http://www.costvsvalue.com/index.html lists many of the top home improvement projects and the amount you can expect to recoup when you sell your house. These range from the decent 85% you can expect to get back from installing a wood deck to the only 57% you’ll recover if you put in a home office. I guess no buyer wants to be reminded that they’re going to have to work from home.

A sign of the slumping real estate market no doubt: the research shows that the percentage a home owner might recover from a remodeling project peaked in 2005. Today you’ll get back even less. It’s funny how Realtors are always saying your home will sell faster and at higher price if you update your kitchens and bathrooms. I’m sure that’s true. The problem is the cost of those rennovations comes out of your bottom line. Realtors get their commissions off the top.

 

About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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