Tuesday, December 21, 2010

Cost Vs. Value Report Again Available

Once again, the Realtor magazine/Remodeling magazine annual report is available. If you want to know how much added value (at resale) you can expect from that new deck, added bedroom, or remodeled bathroom, the report can give you some insight.

Eleven of the improvements generate a greater than 100% return when compared to the cost (though the returns don't reflect ongoing comfort improvements or efficiency savings, such as fewer drafts and lower utility bills from window replacements). Last year's review, with a slightly different project mix, included only seven with ratios over 100%, though back in the mid-00s, the ratios were consistently above 100% in the Bay Area. Throughout the decade, the Bay Area's cost vs. value ratios have been consistently higher than those across the Pacific region, and across the nation.

"Best" investments (meaning ratios over 100%) include: attic bedroom, basement, bathroom, minor (not major) kitchen remodels; garage door, entry door and window replacements; and deck additions (wood better than composite, though I've got to say that with most of Montclair's 30- and 40-year old decks carrying high dry rot inspection price tags, a composite deck is sounding awfully good to me....). Least effective investments include master suite additions, sun room remodels and backup generator installations.

Which leads me to say, all real estate is local. There's no question in my mind that the sale value of a Piedmont home with a master suite will be much higher than a home of comparable size without a master suite (and I ran the numbers not long ago for a client). Our buyers "expect" a master suite and are willing to pay for it (or conversely, some will skip past a home without one, and of course value buyers willing to live without a master suite will be pleased with their cost savings). Likewise, a bedroom addition in Piedmont often comes with a new foundation and second garage space expense attached--it may make little sense without also considering the needs of your family, tax bill considerations, and emotional attachments to neighborhoods. In that case, you might get exactly the arrangement you want for your remaining years in your home, at, say, 60 cents to the dollar of cost paid, after resale is reflected.

So don't hesitate to invite me over to look at plans or add my two cents to your discussions. And don't forget, you need a remodel without a permit like you need a hole in the head.

No comments:

Post a Comment