Remodeling magazine and REALTOR® magazine have just issued the results of their 2008 Cost vs Value report. The survey was conducted last summer with 150,000 emails sent to appraisers, real estate agents and brokers. They received 4,500 responses.

In past reports, I have questioned the results as the dollars spent for the renovation seemed far higher than what clients have told me that they actually spent, even when having professionals do the work. I also wondered about the resale value that might be achieved when selling which also seemed overstated vs what I actually see when doing comps for buyers or sellers.

For example, in this year’s report, they indicate a sunroom, in the IN-IL-MI-OH-WI markets, would cost $71,591 to add. The resale value would be $36,740. Clients have told me that they spent around $20,000 to $25,000. Prices on homes with a sunroom might be $10,000 to $15,000 higher than those without. However, if there are other negative issues with the home, having a sunroom may not help a home to sell. If there are no other issues, then the sunroom “may” help a home to sell vs another similar home without one, making the addition of that room merely a tie-breaker. Bottom line, it depends on how important that room is to the buyer and how much extra the buyer is willing to pay for it.

But, this is just MY opinion … read further for the “official” report. You can get free city reports once you register at www.costvsvalue.com.

For the Columbus market …

• A mid-range kitchen is estimated to cost $20,991 with a resale value of $14,734 for 70.2% recouped cost.
• A mid-range basement remodel is estimated to cost $58,851 with a resale value of $33,686 with a recoup rate of 57.2%.
• An upscale remodel of a bathroom is estimated to cost $50,598 with a resale value of $35,858 for 70.9% recouped.

Some common additions, upgrades, remodels for the E. North Central area (IN, IL, MI, OH, WI)

• Wood deck addition: job cost = $10,534, resale value = $7,263, recouped 68.9%
• Garage addition: job cost = $60,018, resale value = $33,559, recouped 55.9%
• Basement remodel: job cost = $64,008, resale value = $37,851, recouped 59.1%
• Minor kitchen remodel: job cost = $21,759, resale value = $15,038, recouped 69.1%
• Roof replacement: job cost = $20,227, resale value = $11,056, recouped 54.7% (on this one I have first-hand knowledge. My home is just over 2000 sq ft, and the roof I had installed in August using 5-tab, dimensional shingles cost $8500 and that included a tear-off.)
• Vinyl window replacement: job cost = $11,077, resale value = $7,429, recouped 67.1%

Before you decide you can’t afford to make some of these improvements, first check with your local, favorite contractor to get an actual cost estimate. I suspect you may be able to spend far less than this survey indicates. Also, keep in mind that you can’t add 100% of that cost to your base purchase price, because it may just be a tie-breaker feature versus another home on the market. For instance, I would not expect to recoup any portion of the new roof on my home because it falls in the category of “general home maintenance”. Buyers “expect” to buy a home with a roof that has all the shingles and doesn’t leak.

If you’ve made any of these additions or remodels, feel free to add your comments as to the price you paid, and how similar … or dissimilar … your costs were to the Survey’s findings.

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