Massachusetts Real Estate

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Best Remodeling Projects Cost V.S Value For Your Home

The annual Cost V.S Value report for home additions and remodeling projects has been released by Realtor Realtor Magazine Cost v.s value reportMagazine for 2008. If you are thinking of adding an addition or renovating your home in Massachusetts this is an excellent guide that will at least give you a ballpark on what you can expect for a return on your investment.

"NATIONAL ASSOCIATION OF REALTORS® statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners’ investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling’s 2008–2009 Cost vs. Value Report."

 

Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent 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 percent on projects.

 

Top 10 Project Paybacks 

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 cost v.s value report 2008                                                                

1. Upscale fiber cement siding (86.7%)

2. Midrange wood deck (81.8%)

3. Midrange vinyl siding (80.7%)

4. Upscale foam-backed vinyl (80.4%)

5. Midrange minor kitchen remodel (79.5%) 

6. Upscale vinyl window replacement (79.2%)

7. Midrange wood window replacement (77.7%)

8. Midrange vinyl window replacement (77.2%)

9. Upscale wood window replacement (76.5%)

10. Midrange major kitchen remodel (76.0%)

 

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Over the many years that I have been selling homes in the Metrowest Massachusetts area it has struck me how often homeowners believe there is a 100% payback on the money they spend on their homes.

Some of the most common things I hear are " how can my home only be worth X when I just spent $60,000 on my new basement" or " I just added this swimming pool for $45,000 my home has to be worth more."

Man fixing houseIt is quite common for folks to put there list of improvements together add it all up and expect that they can add that onto the value of their home. Many fail to recognize that it is very rare to get a one to one return on the dollar. The items mentioned in the Realtor Magazine report are the best improvements you can make dollar for dollar and none of them come close to a 100% return.

There are other improvements that I know from experience return very little money to a home seller. For example, if you are unfortunate enough to find yourself in a position where you have to replace your Title V Septic system in Massachusetts, you know you will be outlaying a hefty sum of money for a new one.

The typical septic system replacement can run anywhere from $10,000 to $50,000 or more! Well guess what you can be darn sure that if that happens, you will not be getting a buyer to pay you back for putting it in. Buyers just don't care...they expect the toilets to flush. You will be lucky is you get a buyer to give you 10% to 20% of the cost.

In fact this is one of the reasons I always tell my clients to get their Title V Septic inspection done early. A surprise like this is never fun!

Other projects like repaving the driveway or adding additional landscape usually do not offer a high return unless the prior condition was absolutely terrible and the homes price point really warrants it.

Sometimes making home improvements are more about your own personal enjoyment and use and not so much what you will recoup when it comes time to sell you home.

There are plenty of buyers that will appreciate the improvements you have made if they are tasteful and fit what the general population is looking for. In fact when you are faced with a challenging Real Estate market, the homes that get punished the most are the ones that are in less than great shape. Home buyers today have too many options and don't have to settle.

In the article I wrote detailing the top ten mistakes to avoid when selling your Massachusetts home two of the items covered centered around staging properly and neglecting necessary repairs.

When selling your home sometimes even though you do not get a direct monetary benefit from an improvement you increase the saleability of your home which in the long run causes it to sell quicker. We all know that time equals money:)

Related Real Estate articles:

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Duration paint Sherwin Williams

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The above information on the best remodeling projects cost v.s. value for your home was provided by BillRE/MAX Executive Realty Hopkinton Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

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61 commentsBill Gassett • December 03 2008 07:35AM

Comments

HI BILL!

Outstanding post!!  Many homeowners are always stumped at which remodeling projects to do.  They tend to over or underdo.  This post will be an enormous benefit to your readers!

YVETTE

Posted by Yvette Smith, Realtor In Williamsburg VA, Homes for Sale (LONG & FOSTER) over 5 years ago

Bill-- "Buyers just don't care...they expect the toilets to flush."  Great line.  I actually did have to point this out to some sellers recently but managed to put it slightly differently, something to the effect: buyers expect to have a functioning waste disposal system or the property wouldn't be saleable at all.

Posted by Kathleen Buckley (STAR REALTY Hopkinton) over 5 years ago

Yvette - Thanks. I think the cost v.s value report is one of the better statistical analysis that Realtor Magazine puts out.

Kathleen - The point is that people assume that a buyer will be willing to assume the cost of this improvement. If you took two homes that were nearly identical and one had a new $50,000 septic system...what would a buyer give a seller for this...not much. It is a hard pill to swallow but it's the truth.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Excellent post and i have bookmarked it. many people here in Austin are actually foregoing selling in lieu of remodeling and selling at a later date. Not the best for us but better for everyone down the line!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) over 5 years ago

Russ - Thanks knowing which projects make the most fiscal sense are important. There are plenty of folks who put money in the wrong places when it comes to remodeling.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill --The saunas and hot tubs we see in California are for the seller's enjoyment and often have little, if any, return of investment.  It's the basics, not the frills, that add value.

Posted by Norma Toering, Palos Verdes Homes in Los Angeles Area (Charlemagne International Properties) over 5 years ago

Norma - Good point. There are of course things that you can do to your home that may have better returns in one part of the country and not another. I am sure that a swimming pool is a better investment in Florida than it is in Massachusetts.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill - Interesting, I would of thought bathrooms would have been in there.  Exterior improvements do seem to rule.  That's good to know considering I need to replace my siding come spring.

Posted by Jason Sardi, Your Agent for Life (Auto & Home & Life Insurance throughout North Carolina) over 5 years ago

Jason - you must have just missed it. Bathrooms are on the 2nd line in the 1st chart.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill - My bad.  I was just looking at the Top Ten Project Paybacks. 

Posted by Jason Sardi, Your Agent for Life (Auto & Home & Life Insurance throughout North Carolina) over 5 years ago

Bill-an excellent post as usual for you!

Posted by Joseph D. Federico, Eastern Massachusetts Real Estate (Donahue Real Estate Co.) over 5 years ago

Interesting figures - I am curious how they tracked and accumulated the data.  Any insight?

Posted by Ryan Shaughnessy, Broker/Attorney - Your Lafayette Square Real Estate Partner (PREA Signature Realty - www.preasignaturerealty.com) over 5 years ago

Joseph - Thanks I appreciate the compliment:)

Ryan - I believe the statistics were taken from a survey of a large pool of Real Estate brokers from around the country.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill~Another great post. You have a skill for projecting relevant data in a readable format that Buyers and Sellers can easily understand. Keep up the great posts. I enjoy reading them & know others must as well!

 

 

Posted by LaShawn Norden, REALTOR, (321) 377-0157, Your Real Estate Advocate in Central FL (Keller Williams Heritage Realty) over 5 years ago

Lashawn thank you very much for your kind words they are really appreciated. The charts on this one are real easy to get a picture of the best home improvements.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill--I do an update on this report every year. It is a wonderful report and few people realize that not every project is 100% return. In fact, even the best projects only yield 70-80% return on investment. Not something most sellers want to hear or believe.

Posted by Teri Eckholm, Acreage & Lakeshore REALTOR Minneapolis St Paul (REMAX Specialists) over 5 years ago

Teri - It seems homes sellers incorrectly make this assumption about investing in improvements for their homes quite often. I would say that it ranks up at the top of the list of incorrect Real Estate judgements.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Great Post Bill.  This information helps you look at the numbers.  Thanks for your time.

Steve

Posted by Steven Nickens, R(S)GRI ABR, Maui Real Estate Hawaii (Island Sotheby's International Realty) over 5 years ago

Bill, I loved this list.  I'm thinking of putting my deck back (a new one) but may not stay more then a year.  It's good to know it's high up there on value.

Posted by Laura Cerrano, Authentic Feng Shui Expert (Feng Shui Manhattan Long Island) over 5 years ago

Thanks so much for posting this!  I haven't been keeping up with these trends since our market is so price per square foot based these days :-/

Posted by Renée Burrows, Las Vegas Real Estate Broker - www.urLVhome.com (Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate) over 5 years ago

Bill - I always find the annual list very interesting...  There are few items I don't agree with but all in all the list seems accurate.

Posted by Debbie Summers, MoveToLakeMary.com or 407-758-1020 (Charles Rutenberg Realty - Orlando, Florida) over 5 years ago

Bill - Those prices are so far out of line for my area that it is ridiculous.  However, the ROI seems reasonable. 

Posted by Erik Hitzelberger, Louisville - Middletown Real Estate (RE/MAX Alliance - Louisville REALTOR-Luxury Homes) over 5 years ago

Bill, great post. Just thought I'd stop by and say hi and "I'm back"! Feels like I've been "gone" forever!

Posted by Samantha Nichols, Massachusetts Real Estate Specialist (ERA Belsito and Associates) over 5 years ago

FANTASTIC Post!!! And it's a re-blog!

Posted by Jason & Amber Gardner, REALTORS, Sherwood and SW Portland Real Estate (The Hasson Company) over 5 years ago

Bill - I can't count the number of times I've been asked by a seller on what the return costs for improvements they might want to make would be.  This post is a keeper and I've bookmarked it. 

Posted by Donna Bigda, Greater New Haven CT Real Estate (RE/MAX Alliance) over 5 years ago

Steve, Carol, Renee, Debbie, Erick, - Thanks for your comments on the cost v.s value report.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Sam, Amber, Donna - Thanks for the compliments on my post about the best remodeling projects....they are much appreciated!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Your clients want flushing toilets?  Picky, picky, picky :)  Seriously, it's important for sellers to keep in mind not only what the return may be on their improvements, but also what is the "norm" for the neighborhood.  If everyone else has granite countertops, yours are not worth anything extra!

Posted by Lisa Heindel, New Orleans Real Estate Broker (Crescent City Living LLC) over 5 years ago

Lisa excellent example as far as granite counters goes. It can work the other way as well though. If everyone else has granite and you don't then the market will take that into account.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Hi Bill - I'm sending my sellers to your post.  Well done recap of the cost vs value issue.  But boy you have some very expensive septic systems up your way!  They must be pretty fancy to carry a price tag of $10-$50k???? 

Your Raleigh Realtors

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) over 5 years ago

Lee & Pam - Thanks for commenting on the cost v.s value report. Septice systems are very expensive up here in Massachusetts due to our difficult ground conditions (rock, ledge, ect) as well as tough regulations.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Great information!!  I know clients are always asking these questions!

Posted by Tami Vroma, Realtor, Grand Rapids MI Real Estate (West Michigan Real Estate Specialist-Five Star Real Estate) over 5 years ago

Thanks Tami. It is amazing how some improvements are better than others depending on what part of the county you are in.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill - What a wealth of valuable information. This one gets a bookmark!

Posted by Tom Plant (WINEormous.com) over 5 years ago

Bill -- I love your attitude and I wish more agents educated their sellers.  Unfortunately that is not the case.  Many sellers and their agents expect the buyer to "accept" and 30+ year septic if it is not in total failure.  Unfortunately, we don't have title V and never will -- it is NH after all! 

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 5 years ago

Tom - Thanks my friend. I am glad you enjoyed the cost v.s value report.

Joan - Your right there are so many Realtors that just tell a seller what they want to hear because they fear they will not get the listing otherwise. I have never taken that tactic and never will. You get the straight and narrow from me. I see myself as an advisor and hopefully someone that people see as trustworthy.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Hi Bill- I recently saw this report and thought about doing a post...seems you beat me to it....hmmmm, maybe I should just do a re-blog :-)  Not now though, have to leave in a few minutes.  Thanks for stopping by my points post, would you mind if I tapped you for more information to share with the others?  I'll check back with you tomorrow.  Thanks and have a terrific Friday evening.

Gail MacMillan Titusville Fl Real Estate

Posted by Gail MacMillan over 5 years ago

Bill,

Extremely valuable information for homeowners.  You should cross purpose this content to a newsletter, I think it would make great newsletter content to your database.

Posted by Rebecca Levinson, Real Estate Marketing and Online Advertising Consultant (Real Skillz-Clear Marketing for Your Real Estate Vision) over 5 years ago

Bill,

This is really important info for sellers.  They need to understand how remodelling will effect value.

Posted by Christine Donovan, Broker/Attorney 800-610-7253 DRE01267479 - Costa M (Donovan Blatt Realty) over 5 years ago

Gail - Be my guest on the re-blog:) Let me know what else I can help you with.

Rebecca - Excellent thought on the inclusion in a Real Estate news letter.

Christine - Very true. As I have already mentioned there are many who mistakenly believe every improvement they make can be added to the bottom line.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Thanks Bill- I did an update on the post to include suggestions up to now.  I mentioned that you were really good in this area and perhaps you would stop back in and explain in a little more detail. Pat Kennedy suggested linking to domain names (I asked her for clarification on that) and also wondering about single property sites.  Any help you can give those interested would be awesome.  Thanks ~ you're a peach :-)

Gail MacMillan Titusville FL Real Estate

Posted by Gail MacMillan over 5 years ago

Great post Bill! I had a client yesterday asking me about the Fiber Cement Siding.  It's good to know.

Posted by Jen Bowman, Realtor - Anna Maria Island & Bradenton FL (Keller Williams Realty) over 5 years ago

Thanks Jen. The fiber cement siding is a great product. Not many are using it up here in Mass but it is a very durable product and hold paint very well.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

This is such an educational breakdown of what can really add (or not!) value to a home...people are always asking...and I never know much more to say other than saying kitchens and baths always seem to count for a lot... Thanks for this comprehensive instruction!

Posted by Mara Hawks, Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL (First Realty Auburn ) over 5 years ago

Mara you are right on the money about kitchen and baths. These are typically the rooms that will have the most return for the dollars spent.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Good points, thanks.

Posted by Maria Morton, Kansas City Real Estate 816-560-3758 (BHG Real Estate - Kansas City Homes) over 5 years ago

So truem Bill! Sellers often start out by saying how much they're spent on renovations. Truth is, they may make the home sell faster, but they won't recoup all of the costs.

Posted by Sharon Simms, St. Pete FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International) over 5 years ago

Sharon this common misconception has to be at the top of the list for things sellers make an incorrect assumption with.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill - You are absolutely right.  Those remodeling projects may not make the home sell for more money, but it may be the factor that makes the home sell.

Posted by Pam Dent, Realtor - Charlottesville Virginia Homes and Horse Farms (Gayle Harvey Real Estate, Inc.) over 5 years ago

I always like putting the money into the kitchen, no matter what buyers check that out first and foremost.  I will be doing a kitchen remodel to my house in a few years and that will be money well spent.

Posted by Morgan Evans, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) over 5 years ago

Terrific post! I hear these questions asked all the time, especially as clients prepare their home to entertain during the holidays. Thanks for sharing

Posted by Kimberly Cameron, Broker Salesperson, CRS (Remax Properties West) over 5 years ago

Pam - There are times when making an improvement does not bring a lot of $$ but will help the sale immensely.

Morgan - The kitchen is certainly one of the better places to invest in a home. It is one of the most used and enjoyed rooms in the house as well so the money is always well spent.

Kimberly - Thanks for commenting. I get them all the time as well.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

What a great blog. Thanks for sharing.

Posted by Sue Paige (ERA Today Realty, Windham, ME 04062) over 5 years ago

Great information, with some interesting answers, some of which I would not have guessed.

Have A Great Day

Posted by Doris Freeman, Broker/Agent, Realtor, Madison-Gibson-Crockett (RE/MAX REALTY SOURCE) over 5 years ago

Doris - Thanks. The cost v.s value report is always interesting. All of our markets are different and what may be a good return for an improvement in Mass may not have the same appeal somewhere else.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 5 years ago

Bill,

Did you see the job cost for an upscale master suite?  I've seen home sell for lower than that.  Honestly I don't believe the re-coop for something like that would be as high either.

If anyone is looking for a contractor have them get multiple Construction Quotes this way they can compare construction estimates.

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