Maine Real Estate News and Notes

Despite home price drops in many cities across the country, remodeling projects are holding their own as a way for owners to add or preserve value.

We all know that when we make improvements to our homes, we don't typically get 100% of our investment back when we move. And certainly, we make improvements to our homes for more reasons than just the return on investment. We do it to enjoy the time we spend in our home, to keep it up to date with current trends, and to personalize it to our individual tastes. 

But knowing the value of a particular project can help you properly plan and budget. Otherwise, a project stands to drain your wallet both now, and down the road at resale time.

Each year, the National Association of Realtors (NAR), in conjuction with Remodeling Magazine, publishes a Remodeling Cost vs. Value report - and the 2008 results were recently released. The report documents the average cost associated with a variety of home improvements, as well as the average increase in value that improvement has on a typical home, in different areas of the U.S.

Recouped Value less than 100% 

The survey, conducted during the summer of 2008, revealed that home owners could expect to recoup a national average of 67.3% of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7% on projects. 

Said another way, while statistics point to an average home decline of 7% nationally in the past year, the value of home owners’ investment in remodeling projects has declined only 3.86%between 2007 and 2008.

Best Projects 

As in previous years, exterior remodeling projects lead the way for recovery on dollars spent. When you compare the national averages, replacement projects that boost curb appeal - siding, windows, and decks - give you the greatest chance of recouping your money.

Inside, only kitchen remodels can compare, at least on a national level.

On a regional level (New England) the leading projects and their returns were:

· Fiber Cement siding (86.7%)
· Wood Deck (81.8%)
· Vinyl Siding (80.7%).

The only projects that showed an improved return over 2007 results were upscale bathroom remodels and exterior siding projects.  For complete details on regional remodeling results visit New England Cost vs Value.

With few exceptions, the percentage of cost recouped on upscale additions and remodels was generally lower than midrange additions and remodels. This stands to reason as many upscale remodels are not undertaken using an investment return mentality - but rather for the enjoyment of one's home.

So, if you plan on staying put and living in your home for many years, forget the report and do whatever makes you feel most at home!