This is the eighteenth anniversary of REMODELING's Cost vs. Value Report, which compares the cost-to-construct for a selection of common remodeling projects with the added value those projects bring at resale. This year's report expands to 18 projects, including both mid-range and upscale projects, and also increases the number of cities reporting from 35 to 60. Specpan, a Denver-based market research company, hosted, programmed, and managed the online survey, which was in the field for 60 days. Specpan also collected and compiled the data and provided on-line survey expertise and analysis. The Farnsworth Group, an Indianapolis-based consulting firm, analyzed survey data and provided pre- and post-survey consulting.

Where We Get The Data

Cost data for the Report come from Home-Tech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors, and its cost figures include a 40% margin. Costs are adjusted to account for city-to-city pricing variations.

Resale values do not reflect actual sales made on remodeling projects. Instead, they are based on the professional judgment of members of the National Association of Realtors (NAR) about each remodeling project's anticipated resale value. E-mail surveys containing cost and median home price data for each city were sent to more than 20,000 appraisers, sales agents, and brokers, generating 356 responses (a 1.78% response rate). According to The Farnsworth Group, the data accuracy rate is +/- 5% to 10%.

What Do The Numbers Mean?

While the data presented here can help set expectations for homeowners contemplating remodeling work, some figures will appear too high or too low simply due to the leveling effect of averaging. It's also important to acknowledge a variety of factors that can affect both the cost of remodeling and the resale value of homes.

  • Costs for materials, subcontractors, and labor vary among cities.
  • Overhead and margins vary among remodeling companies operating in the same market.
  • Project size and scope, and quality of finishes, have a disproportionate influence on final project cost.
  • Return on investment depends on the value of the house itself, the value of similar homes in the immediate area, and the rate property values are changing in the surrounding neighborhoods.
  • The value of suburban homes will vary when compared with rural and urban counterparts.
  • Availability and pricing of new homes affects the value of existing homes.
    • Average Recouped At Resale
    2004 80.3%
    2003 86.4%
    2002 79.1%

    For some projects, resale value is projected to be more than 100% of the original investment; in some cases, quite a bit more. This is characteristic of markets where property values are rising very rapidly, but also in areas where certain types of remodeling projects are taken for granted. For example, in a neighborhood where a deck is considered an expectation, adding a deck to a home that doesn't have one may well increase the resale value of the home beyond the cost to construct the deck.

    Nevertheless, if resale value is a major factor in any decision to remodel, the best course of action is to consult with a remodeler on construction cost and seek an assessment of resale value from a Realtor active in the particular neighborhood.

    2004 National Averages
    Note: Click on the project name below
    to view the detailed project charts.    		Job CostResale
    Value    		Cost
    Recouped    		 Variance vs. Rank
    200320022004 20032002
    Minor Kitchen Remodel$15,273 $14,195
    92.9%
    n/a
    n/a
    1
    n/a
    n/a
    Siding Replacement 6,946 6,445
    92.8%
    -5.4%
    17.3%
    2
    2
    7
    Bathroom Remodel, Mid-Range 9,861 8,887
    90.1%
    0.9%
    3.0%
    3
    6
    3
    Deck Addition6,9176,000
    86.7%
    -16.8%
    n/a
    4
    1
    n/a
    Bathroom Addition, Mid-Range21,08718,226
    86.4%
    -9.0%
    -8.3%
    5
    3
    1
    Bathroom Remodel, Upscale 25,273 21,629
    85.6%
    -7.6%
    -6.0%
    6
    5
    2
    Window Replacement, Mid-Range 9,273 7,839
    84.5%
    -0.3%
    14.6%
    7
    8
    12
    Window Replacement, Upscale 15,383 12,875
    83.7%
    -3.7%
    8.7%
    8
    7
    9
    Attic Bedroom 35,960 29,725
    82.7%
    -10.9%
    n/a
    9
    4
    n/a
    Bathroom Addition, Upscale 41,587 33,747
    81.1%
    -3.7%
    -0.3%
    10
    9
    4
    Roofing Replacement 11,376 9,197
    80.8%
    n/a
    20.6%
    11
    n/a
    13
    Family Room 52,562 42,347
    80.6%
    -0.1%
    1.4%
    12
    10
    6
    Major Kitchen Remodel, Upscale 75,206 60,367
    80.3%
    0.8%
    0.6%
    13
    11
    5
    Master Suite, Mid-Range 70,245 56,257
    80.1%
    4.9%
    6.6%
    14
    14
    11
    Major Kitchen Remodel, Mid-Range 42,660 33,890
    79.4%
    6.0%
    19.4%
    15
    15
    14
    Master Suite, Upscale 134,364 104,200
    77.6%
    0.8%
    1.0%
    16
    13
    10
    Basement Remodel 47,888 36,457
    76.1%
    -4.0%
    -3.2%
    17
    12
    8
    Sunroom Addition 31,063 22,002
    70.8%
    n/a
    n/a
    18
    n/a
    n/a
    2003 Cost vs. Value Report

    2002 Cost vs. Value Report