The National Association of Realtors just released The 2008 Cost vs. Value Report.  The Report compares construction costs with resale values for 30 midrange and upscale remodeling projects comprising additions, remodels and replacements in 79 markets across the country and found that exterior remodeling projects return the most money as a percentage of cost.

 The resale value of any given remodeling project depends on a variety of factors; A home’s overall condition, availability and condition of surrounding properties, location, and regional economic climate are all factors that will influence the value of any remodeling project. Not every neighborhood will support additional renovations, that’s why it’s important to consult with professionals like Realtors in your area. Realtors see hundreds of homes every year and can provide valuable insight into what projects and improvements will make a difference with buyers in your area.

Here are some of the highlights from the survey:

•          Wood deck additions and all types of siding replacements returned more than 80 % of project costs

•          All types of window replacements – upscale and midrange– 76 %

•          A major midrange kitchen remodel: 76.0 %

•          A minor midrange kitchen remodel: 79.5 %

•          A midrange bathroom remodel: 74.4 %

•         A midrange attic-to-bedroom conversion: 73.6 %

•        Midrange basement remodel: 72.7 %

•          The regions that generally returned the lowest percentage of costs were New England,  East and West North Central, and Middle Atlantic

 This Week’s Real Estate Insight:

While these renovations will not return 100% of the investment, they often can mean the difference between your house even selling at all, potential buyers “become their own contractors” and go around adding up all the potential costs and subtract that from their offering price.  You might be apprehensive about a major renovation in this economy, but that can work in your favor; you can probably bargain with contractors as  they are feeling it too.  But don’t go just by price, make sure you get good references for contractors

 

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Many people are deciding to walk away from their loan obligations simply because they are upside down on the principle and owe more than it is worth; I have to ask   Why, just because you can?,  Just because your neighbor is doing it?  Would it surprise you to know that more  American are  upside down on a loan with no hope of ever recovering the original value?, yet most  do not care and  almost all continue to pay the loan, while also paying tremendous amounts of money for maintainence, insurance, and ever-rising fuel costs, I am not talking about  homes, but  about  automobiles.  For the most part, a car’s value dimishes the minute you drive it off the lot, and yet most people continue to pay for the car for the next four years!
If you are not having any problems making your motgage  payment,  I urge you to continue to make your payments and hang on, your home’s value will more than likely improve in the next upward cycle.
After tomorrow, we will have elected a new President, and we will have a clearer understanding of what economic policies will be implemented.  And there is already good evidence that we are at or near the bottom of this cycle. 

This Week’s Real Estate Insight:

 Before you decide to walk away from your mortgage, remember that  proportionally, more people have realized a larger drop in the value of their SUV’s than their homes.

 

 Listen to this week's show here [63:54m]: Play Now | Play in Popup | Download