The Cost vs. Value Report is an annual set of home remodeling estimates that has become an industry classic.
For close to two decades, Remodeling Magazine (and Remodeling Online), published by Hanley Wood, has been doing something that few other publications dare to do: create estimates of home remodel projects.
Every December, these publications come out with their Cost vs. Value Report for the preceding year, measuring the estimated average cost of remodeling projects across the U.S.
What Is It Used For?
Cost Vs. Value Report pulls in an extensive amount of data--30 remodel projects across 100 U.S. markets.
Cost vs. Value Report is so unique because it is difficult to pin anyone down in the remodeling industry about general estimated project costs, since costs are particular to each project. Now add the other, shakier figures, which are the estimated resale values (they say that this represents over 3000 data points) and you've got a report that really goes out on a limb.
Remodeling does its legwork. They use figures from survey responses from 6,500 Realtors (member of the National Association of Realtors) and a publisher of remodeling cost estimating tools, RemodelMAX. All is coordinated by The Farnsworth Group.
What Do You Find?
A wealth of information. Nationwide, a bathroom addition that cost $16,724 could be expected to have a value of $11,707 upon sale--a 70% return.
Or, vinyl window replacements costing $11,198 would bring in $8,163 upon sale--a nearly 73% return on investment (ROI).
The takeaway for any homeowner intent on remodeling: all remodeling projects depreciate in value, and few reach as high as even a 90% return on investment. Some of the projects we hold most dear to our hearts are the ones with the lowest percentage of cost recouped: namely family room additions, bathroom additions, and master suite additions.
- Ease of Use: If you were to look at a Cost vs. Value Report in its existing web format from ten or even five years ago, you would not recognize it. Remodeling Magazine undertakes great efforts to make the report easy to use and comprehend. Parsing data from the report is simple and fast.
- Historical Data: Most people are only interested in the current year's figures. But for researchers or data hounds, Cost vs. Value always maintains archives of the last fifteen years of statistics.
- Subjective Factors: It is impossible to quantify everything; some things are subjective. To that end, the Cost vs. Value Report also takes into account subjectivity when assessing home project values.
- Big Picture-Reliable: The report notes that it can be deceptive to apply national or regional trends to the street- or address-level. But if your business deals with larger scale data, you can rely on the information provided by the report.
Data from Cost Vs. Value report, while accurate, does omit certain important aspects of home remodeling that make estimates inappropriate for the do-it-yourselfer:
- No DIY Data: Because this is an industry report, pulling in data from a contractor estimating tool and balanced against perceptions by real estate agents, it ignores do-it-yourself home remodeling. All remodel estimates take into account paid outside labor, no sweat equity allowed.
- Few Lower End or Surface-Remodel Projects: Projects that homeowners commonly take on in order to spruce up their homes are not included: cabinet refacing, tub and shower refinishing, laminate and vinyl flooring, etc.
- Top-End Materials Costs: RemodelMAX estimating data favors contractors; thus, data is understandably weighted toward helping contractors clear a profit. Yet this results in higher cost materials, such as an estimated $13.20 for a GFCI outlet. Currently at Home Depot, a 10-pack of 15 Amp Tamper-Resistant Duplex Outlets is $21.90, or about $2.00 per piece.
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