REALTORS educate consumers on the value of remodeling

By __________________________(Name of President)
President, _________________ Board/Association of REALTORS

The resale value of many remodeling projects has not kept pace with the costs of those projects, according to REALTORS and remodelers who participated in Remodeling magazine’s 2006 “Cost vs. Value Report.” Produced for 19 years by Hanley Wood, LLC, this is the ninth consecutive year the report was completed in cooperation with REALTOR Magazine, as National Association of Realtors members provided their insight into local markets and home buyer preferences in 60 different cities across the country.

Results of the report were summarized in the December 2006 issue of REALTOR Magazine. The report shows that prices for most remodeling projects continue to increase, though their resale value has decreased. This trend reflects a return to a more balanced real estate market in many areas of the country. As in 2005, kitchen and bathroom remodels are still near the top of the list in terms of costs recouped, on a national average.

In 2006, the national average cost for a major kitchen remodel was $54,241, and the return was $43,603, for an 80.4 percent return on investment. By comparison, in 2005, a major midrange kitchen remodel cost an average of $43,862 and returned $39,920, or 91 percent of the costs to remodel. Midrange bathroom remodels recouped 85 percent of their cost in 2006, with remodeling expenses averaging $12,918 and resale values averaging $10,970. Last year, the same project cost $10,499 and returned $10,727, or 102.2 percent.

The report compares construction costs with resale values for 25 common remodeling projects in 60 cities. This year the report provides data for nine U.S. regions, rather than four as in years past, following the divisions established by the U.S. Census Bureau. The projects represent additions, remodels and replacements. Nationally, replacement projects tended to return more value than additions or remodels, but, as in previous reports, the desirability of different remodeling projects varied by region and metropolitan area.

"Many factors affect a home's value and, consequently, the resale value of any given remodeling project," said, _______________ (president's name here), president of the _____________________ (Board/Association name here). "The home's overall condition, availability and condition of surrounding properties, location, and regional economic climate are all factors that influence value in real estate. When considering a remodeling project or preparing a home for sale, consumers should rely on industry professionals, such as REALTORS, who have the expertise and experience to help homeowners protect their investment."