Each year, a number of cities in the Cost vs. Value Report show a cost-recouped average that is above 100% for some remodeling projects. This indicates that, on average, those projects are worth more in resale value than the owner spent to construct them. Other metro areas have projects in which a homeowner will get back less than half at resale what was spent on the remodeling job. What's behind these drastic variations?
Often, projects pay back more than 100% occur because of a hot real estate market or because a specific project is in high demand. Either case can make a big difference in how buyers perceive a property. If a remodeling project helps a house meet buyers' expectations—adding a deck to the only house in the neighborhood without one, for example, or adding a second bathroom in an area where every other home already has two—the homeowner can expect a good return in the form of a higher selling price, a quick sale, or both (assuming everything else about the house is up to standard).
Projects with low or slumping resale value have in recent years typically been victims of weak home prices in that market. A low ranking may also reflect a lack of demand, but this can be misleading at the local level. Metropolitan markets often cover large geographic areas, in which a feature could be regarded as desirable in some parts of the market and a drag in other areas.
