6 Mar, 2008 in
Real Estate Tips by
Cristina
URBALO
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It was well known that high-end kitchen and bath renovations were increasing the home’s value. But the granite countertop’s glory days might be over. During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home’s value.
The statistics show that the homeowners recovered about 80% of the cost when the house was later sold. The slowdown in the real estate market and the flood of new properties on the market, has given the buyers more options to choose from therefore all these extra upgrades don’t present much value in their eyes anymore.
A recent survey by NAR has shown that most renovations are returning less than 70% of their cost. NAR’s survey revealed that returns on investment for a wide range of high-end interior redecoration dropped in 2007. An upscale bathroom renovation cost an average of $50,590, nationally, but only added $34,588 to house value - a 68.4% return. In 2006, a high-end bath renovation returned 77.4% of its cost.
Adding a brand new bath didn’t pay off as well either, earning just a 69% return in 2007, compared with 72.8% in 2006. High-end kitchen remodels held up better, adding value equal to 74.1% of the cost, compared with 75.9% in 2006.
So, before you go ahead and decide to increase the value of your house, put the numbers on paper and see if it’s actually worth going ahead with your plan.
Steel Sinks | June 10th, 2008 at 5:59 pm #
It may be true that you can only recover about 70% of the cost on some of these improvements, but if you plan on living there for a number of years and not flipping your house that quickly its worth it in my eyes. I just redid my kitchen counter tops and I have to say it makes me smile every time I round the corner.
Kindred | February 6th, 2009 at 4:58 pm #
I totally disagree, even though prices are coming down I and anyone else would pick a house that has an updated bathroom and kitchen. This is a very common mistake people make when values fall, by not doing the updating the value of the house falls even further.
Its common sense. If you can get a new car for almost the same price as an old car, which are you going to buy? People will pay a little more for the new car.
Home buyers know the cost of the updates, and that it does raise the price higher, but is worth it because the propery is move in ready. Prices may have dropped but what buyers want hasnt.